Culture-Fit_Body.jpgby Erin O’Donnell.

Finding employees that mesh well with your company’s culture is just as important as matching up a résumé to a job description–maybe even more so. Research shows that ignoring your culture can cost you, in real dollars, as it influences everything from people to profits.

Gallup, which has been surveying American businesses about employee engagement since 2000, defines engaged employees as “those who are involved in, enthusiastic about, and committed to their work and contribute to their organization in a positive manner.” In this biennial analysis, Gallup research has shown time and again that engagement leads to better productivity and profitability:

  • The top 25 percent of teams, the most engaged, had nearly 50 percent fewer accidents and 41 percent fewer defects in quality, compared to the bottom 25 percent surveyed.
  • Firms with an average of 9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147 percent higher earnings per share compared with their competition in 2011-2012.
  • Companies with high engagement also tend to have lower healthcare costs.

But according to the organization’s 2012 analysis, 70 percent of American workers are not engaged or, worse, actively disengaged. And a bad hire can cost you. The U.S. Department of Labor says the average cost is nearly one-third of that worker’s first-year potential earnings—a $15,000 loss for an employee making $50,000 a year. It costs about $10,000 to replace a mid-level employee. About 49 percent of new hires quit within the first 18 months because of a poor culture fit, according to the Corporate Leadership Council.

Predicting engagement

Hiring managers and recruiters are turning more and more to technology and tools that claim to uncover a job candidate’s personality, teamwork traits, and leadership style, to name a few. They use surveys, role-playing, and mini-projects to gauge what lies beneath a skill set.

At Situation Interactive in Brooklyn, New York, job candidates are screened for signs that they’re adaptive and collaborative, traits that are embedded into the company’s core values. “If someone is not adept at change or needs a very structured environment, they’re not going to succeed here,” says Beth Taylor, human resources supervisor.

The digital marketing agency specializes in experiential brands, like Broadway shows and special events in Las Vegas. Launched in 2001, the agency now employs more than 50 people. Taylor says the firm gets high marks for employee satisfaction and enjoys low turnover because of a culture that values passion, risk-taking, and accountability. “When you’re a small agency, everyone is very visible about what they do,” she says. “You can’t hide behind mistakes or try to point your finger.”

Culture-Fit_PQ.jpgKnow your culture

Before you try to find employees that will fit within your culture, you’ve got to know what your culture is. Often, that’s easier said than done, which is why tools have emerged to help small business owners with the challenge.

Kelsey Conophy says most companies focus on their perks, benefits, and broad mission statements to identify their culture. But if you’re not asking employees about it, you’re not getting the true picture. That’s why she founded workZeit, an online tool designed to help companies zero in on their internal culture much like they would their own brand.

The workZeit metrics go beyond the old Myers-Briggs personality test, which catalogued and compared individual traits, such as extrovert vs. introvert or judging vs. perceiving. Using workZeit, you can measure complementary factors, such as how one new person changes the dynamic of a group. It starts with an online assessment of what they call the Cultural Fingerprint—a unique profile of work style, preferred work environment, and the process with which a group or individual works best.

The goal is to aggregate years of research by organizational psychologists and HR managers and deliver a more simple and manageable tool for hiring. “We’re enabling them to all speak the same language,” says Conophy, workZeit’s CEO.

Some of that research originated with behavioral scientist Dr. Janice Presser, CEO of the Gabriel Institute. Presser is the co-inventor of the Teamability metric, which uses a role-based approach to aptitude and predicting how people will perform in a group dynamic. People tend to fulfill the same roles whether they’re in a boardroom or a book club, Presser says, and each role benefits an organization in different ways. For example, the CEO may be a brilliant idea person, but she’s going to need a chief strategist to get things done.

If you have the right mix of roles, Presser says, you get a coherent organization. If not, chances are you wind up with a culture of high stress, which is essentially fear-based. Top-down, rigid companies like this don’t have what she calls a coherent human infrastructure. “Even if you’re in a tent, you want the walls to meet and be interdependent,” she explains. “When people are interdependent, they are supporting each other for the achievement of something bigger.”

Interviewing for fit

Once you have a grasp on your culture, or what you want it to become, you can improve your recruitment and interviewing process. Elizabeth Lions, author of Recession Proof Yourself, recommends benchmarking your best people before searching for coworkers to complement them. Who are your top performers? What are their traits, skills, and attitudes? When you know, you can look at resumes and ask interview questions that seek out good matches. “This gets the guessing game out of hiring,” Lions says.

SBC newsletter logo.gifAt King Retail Solutions in Eugene, Oregon, job candidates go on a bit of a test drive. Andrew Swedenborg, EVP for corporate development, is a fan of creating “working projects” for people who interview with the company, which designs retail spaces. Clients include major corporate brands like Safeway, Walgreens, and Starbucks. After a phone interview, the candidate gets a little homework—a task to complete in a couple of hours that simulates a challenge they might face in that position. It’s especially useful, Swedenborg says, with positions in accounting or marketing that don’t come with a built-in portfolio like designers do.

“The purpose isn't to use the end result, but to gain insight into their problem-solving approach, the quality of their work, and their overall thought process,” Swedenborg says. “Often, people abandon ship when asked to do this kind of project, and that's actually great. We want the go-getters.”

As culture evolves

Conophy says companies should continue to take their cultural temperature on a regular basis just as they would plot the ROI of a marketing campaign.

At Situation Interactive, where flexibility is highly prized, the company’s core values remain constant. But the culture conversation goes on. Human Resources supervisor Taylor says when she was hired, she assumed her role would be the conventional one: recruitment, payroll, and benefits. The company president had other ideas.

“He hired me to be the voice of the people, from more of a cultural standpoint,” Taylor says. “I think people need to start using HR in that way, to be the voice of the team, especially in a small agency. It changes what HR can do.”