Culture Matters 10 Times More than Compensation

April 5, 2023
April 5, 2023 Jamie Notter

That’s according to a 2021 study published in MIT’s Sloan Management Review:

“A toxic culture is 10.4 times more likely to contribute to attrition than compensation.”

The researchers dug deep into why people were leaving organizations during the great resignation, and their findings were fascinating. Some industries had higher turnover than others, as you would expect (it’s higher in retail than in airlines, for example), but within each industry there were organizations that were well below the industry average, and culture was a huge driver. Culture’s impact towered over other factors: job insecurity and reorganization was only 3.5 times more than compensation, and failure to recognize employee performance was only 2.9 times.

See also  Overview of Your Culture Assessment Options

That means if you’re culture’s off, you need to fix it fast. In the rapid version of our culture change coaching program, we can help you design specific culture change activities that can be implemented and show measurable results in only six months.

Jamie Notter

Jamie is an author and growth strategist at PROPEL, where he helps leaders integrate culture, strategy, and execution to achieve breakthrough performance and impact. He brings twenty-five years of experience to his work designing culture-driven businesses, and has specialized along the way in areas like conflict resolution and generations. Jamie is also the co-author of three books—Humanize, When Millennials Take Over, and The Non-Obvious Guide to Employee Engagement—and holds a Master’s in conflict resolution from George Mason and a certificate in Organization Development from Georgetown, where he serves as adjunct faculty.