Turn over any newspaper and you won’t be surprised to see yet another corporate scandal, or an accusation that a company’s culture is “toxic”. It seems the outrage is arriving thicker and faster than ever.

Smaller businesses may feel far removed from the outrageous stories in the news, yet there’s a significant connection. Even organisations that would never dominate the national or global news agenda need to recognise that problems in their internal culture can and will surface online.

Toxic cultures no longer need to be reported by lone whistle-blowers, or even undercover journalists — the reality inside British SMEs is being openly shared on the web. Renewable energy supplier Bulb recently found this out the hard way, when the Telegraph reported on “growing signs of employee discontent” and complaints of a “toxic work culture” based on the firm’s Glassdoor score, a website where staff can anonymously review their employers.

Glassdoor is certainly influential: it gets 67m unique visitors each month and hosts 49m reviews of nearly 1m companies worldwide.

Most business owners are already aware of how much online reviews can affect their ability to recruit and retain talent. Glassdoor itself suggests that 70pc of people examine employer reviews before they make career decisions, with most candidates reading six reviews before forming an opinion about a company.

However, this goes further than recruitment: journalists now have an open window into every company’s inner culture, and the issues inside a business will be known and shared across all its stakeholders — be they customers, investors, or others.

There will still be those that consider culture a “fluffy” subject. They’d rather focus on more tangible aspects of their business: finance, innovation, marketing and so on. However, the reality is that culture encompasses all these issues and more.

A toxic culture does real harm to individuals and communities, stifles productivity and shackles commercial potential. Our recent Culture Economy report found that UK companies are paying a high price for poor corporate culture — a massive £23.6 billion per year in fact.

Ultimately, negative reviews on Glassdoor and elsewhere represent a major challenge because they are a symptom rather than a cause. They are a warning sign that an SME hasn’t made its culture enough of a priority.

So, what can be done to prevent negative Glassdoor reviews and improve your workplace culture?

Forget quick fixes

Unfortunately, there’s no easy solution to negative reviews. A profile must be built, curated and nurtured over time. Therefore, entrepreneurs should invite people to review their company at career milestones, such as just after a promotion, or at the end of an induction period.

Don’t forget to interact

Business owners should also take the time to reply to both positive and negative reviews—demonstrating that they listen to feedback and take action where appropriate, but also push back on misleading or false claims if necessary.

Consider culture from the outset

A culture that’s established when you’re a business with 10 employees is much harder to change once you reach a headcount of 1000. No organisation is too small to think about HR and the culture it wants to embed — and the earlier you do it, the better.

Assess where you are today

Examine the data and metrics you have in place to assess your culture — for instance, benchmarking employee absences, retention and turnover against industry norms. Are there gaps in your knowledge? Put in place new strategies to fill them, like employee engagement surveys.

Clarify your purpose

What authentic purpose does your business serve? How can it inspire and engage your workforce? Make your business operations part of a meaningful mission and enable as much ownership and autonomy amongst staff as possible.

Go from the menial to the meaningful

Ask how new technologies and automation can reduce the admin burden on staff, so they can focus their time on adding value, better supporting customers and fostering the right culture. Also consider how technologies can help you integrate new working models, like flexible working.

Lead and communicate effectively

Positive cultures stem from leaders that have a clear idea of what they want to create and what they expect from their people. Ensure these expectations are communicated clearly, honestly and consistently. Make yourself available to employees, strive to lead by example and engage with real concerns to build trust. SMEs should regularly get feedback on senior management to see how they are viewed and what they can improve on.

Today, there’s no hiding place from public scrutiny. Your culture needs to be authentic through and through, with no disparities between its public and private face. The people your business depends on — employees, customers, investors, and more — also increasingly expect you to have a purpose that speaks to them.

By building a positive culture focused on making a difference to individuals, communities and society, SMEs can do more than prevent scandals, they can find real competitive advantage. Almost two thirds (60pc) of SME leaders believe a good culture drives higher levels of customer service and satisfaction, while more than half (55pc) see it as inspiring improved performance and productivity.

Jonathan Richards is CEO at HR software provider Breathe

Further reading

Nepotism in the workplace hitting recruitment

 

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