The primary objective of any recruiter is to find the most talented, promising candidates available, and then use them to fill open roles that match their experience, skill set, and goals. However, cultural fit is often ignored in a company’s hiring strategy. As a result, even the best-looking candidates can quickly turn into “bad hires.”

Organizational culture has been defined as “the set of behavioral and procedural norms that can be observed within a company – which includes its policies, procedures, ethics, values, employee behaviors and attitudes, goals and code of conduct.” If you want to reduce turnover and increase productivity, it’s vital to determine whether a candidate aligns with your company’s ethics and values. Put simply, cultural fit in terms of the hiring process is not a luxury. It is a necessity.

What Are the Potential Consequences of a Bad Cultural Fit?

What happens if you hire someone who doesn’t really match up with the goals and values of your organization? Just one of the negative consequences that could occur is a hefty financial cost for the company. In fact, a study by the Society for Human Resources Management (SHRM) found that the cost to replace a bad hire could be up to five times the bad hire’s annual salary. So if you pay a bad hire $50,000/yr, you could end up paying as much as $250,000 to replace them once they leave!

Why such a steep cost? Consider just a few of the possibilities when a bad hire leaves your organization:

• Incomplete projects suffer disruption, resulting in increased downtime and higher training costs.
• You lose valuable customers during the transition from the original hire to a new one.
• If the bad hire felt they were discriminated against or otherwise mistreated, litigation fees could enter the picture.

What if a bad hire stays with your organization for a considerable period of time? You’ll likely have to deal with other negative consequences. For example, other team members may experience lower morale. Overall, productivity is negatively impacted. 

The bottom line is that hiring a candidate who’s a bad fit for your culture will inevitably affect your organization for the worse. Conversely, a good cultural fit will have a positive impact on your company. How so?

The Benefits of Cultural Fit in Your Hiring Strategy

If you want to hire people who will align with your company’s core values, then it’s important to “live your culture.” In other words, don’t just talk the talk. Be willing to walk the walk.

From Day 1 of their experience with your company, candidates should continually be able to grow in their understanding of your expectations regarding culture – not just in theory, but in practice. In fact, you could even assign a “cultural ambassador” to speak to each candidate during their hiring and onboarding journey.

What are some of the key benefits you’ll receive from paying attention to cultural fit? Here are three to keep in mind.

1. Collaboration

Ensuring that your new hires fit into your established culture promotes smooth collaboration. Additionally, it gives employees more incentive to help one another. When building a team, it’s important that everyone is aligned with the same mission, values, and culture. As your company grows, you want to scale up without sacrificing the “team spirit” that you’ve developed over time. (This is also a key factor in driving employee retention.)

2. Diversity

Promoting a culture of diversity empowers you to successfully hire people from different backgrounds. In fact, diversity and inclusion are huge factors for jobseekers as they decide which offer to accept. According to one survey, 76 percent of employees and job candidates report that a diverse workforce is an important consideration when evaluating companies and job offers. Of course, diversity of thought can also contribute to the development of creative and efficient solutions within the organization.

3. Competitiveness

Some hiring managers fall into the trap of thinking that they can only compete with other companies based on salary. However, salary, while important, is only one aspect of a competitive offer. In some cases, you may not need to be the organization that provides the highest compensation for top talent. You can be the organization with the best culture.

Interestingly, one study found that only 3 percent of respondents said their primary driver at work was financial reward. Whereas, 73 percent said their primary driver was work that has purpose and meaning.

How Can You Determine Whether Your Company is “Living Your Culture?”

Clearly, there are several compelling reasons to factor cultural fit into your hiring decisions. But perhaps the more difficult question to answer is: “How do we know whether we’re actually ‘living our culture’ within the company?”

This is where the importance of feedback comes into focus. Do your employees believe that your company’s actions align with its words? The only surefire way to know is to ask them. With that in mind, be sure to periodically put culture on your managers’ agenda during regular feedback sessions with their team members. Send out quarterly employee surveys that include culture-related questions. Also, use exit interviews as an opportunity to determine whether employees are experiencing your culture as it is meant to be. 

If the reality of your culture is significantly different from the ideal, don’t be discouraged. The cost of improving your culture doesn’t necessarily have to be a huge pay raise for each and every employee. Rather, there needs to be a clear, consistent focus on living the culture day by day, starting at the top of your company.

In summary, cultural fit is a major component of any successful hire. Ignoring it can lead to high costs and negative consequences. Paying attention to it can result in enhanced collaboration, greater diversity, and increased competitiveness. Learn more about how to improve organizational culture, as well as many other aspects of an effective hiring process. Check out other helpful resources provided by The Doyle Group here.