With the cost-of-living crisis, it’s easy for HR to think recruitment and retention begins and ends with money. CIPD research confirms this is what’s happening. More than half of employers were found to be inflating their pay to help with retention.

While a pay and benefits package will always be a basic factor in decisions around careers, when to stay, when to go, it’s neither the most important nor the most influential issue for employees. Simply put, people don’t want work to be a cash transaction that’s tied up with politics and angst.

As referenced in our recent post, What’s more important: Cash or Culture, We’re living through an age when employees look to their workplace as a much needed source of stability. For routines, sense of purpose and their day-to-day relationships — something with the potential to be reliable.

The detriment of toxic cultures

That’s why other new research (this time from Workbuzz) suggests that a good workplace culture is more attractive than salary. Around half of the 300 employees and business leaders surveyed ranked having a “great” culture as the most important factor when looking for a new job.

In the challenging years to come, it’s toxic cultures that will destroy businesses over time, the report concludes. Toxic cultures in workplaces are bad for morale, engagement and performance. There is now also research evidence that employees who work in an environment of poor management — where there are unreasonable demands, a lack of autonomy and recognition and low levels of psychological safety — are three times more likely to suffer from depression.

So HR need to get the people processes right: the onboarding, the right kind of flexible work arrangements, good professional development and a clear career ladder.

The importance of Psychological Safety

But culture really isn’t about the formal processes. There are no short cuts to building a good workplace culture. Now, more than ever, HR strategy needs to be built around the importance of psychological safety: where teams feel a sense of mutual trust and respect, where people always feel comfortable in just being themselves, and are able to speak up when they need to.

In practice that means good conversations across workplaces happening every day. Open, trusting conversations. Conversations that deal with people’s worries and concerns, large and small; difficult, sensitive, or otherwise. Most organisations think they do this well already, but wrongly.

Creating a Clear Air culture like this, where employees have a genuine confidence and trust in their organisation (and each other), knowing they will be listened to and understood in the right way, depends on having the right sets of skills and the right informal channels to deal with problems: what we call ‘Conversational Integrity’, a combination of listening skills, empathy, curiosity, self-awareness and all-round nous.

Employees also have to believe in the systems that are in place for when things go wrong, knowing they can trust the mediation service and the trained internal staff or external professionals brought in; and in the last resort, that investigations will be carried out to the highest standards. It’s in this clear air context that organisations see and feel the return of a culture of openness and honesty and all the benefits of engagement, motivation and goodwill that come with it.