People and Culture vs. HR: 4 Reasons to Embrace Change

Name: TECLA
Brand: TECLA
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Did you know that an astonishing 85% of employees worldwide are not fully engaged at work? This eye-opening statistic signals a need for change in how companies manage their workforce. Gone are the days when traditional HR methods were enough. Now, there's a growing trend towards 'people and culture' – a strategy that places employees at the heart of their organizations.

There is more to this transition from traditional HR to people and culture than just a new name. It involves transforming the workplace into a space where employees feel genuinely valued and connected to their work.

Companies that understand this are not just happier places to work; they're also experiencing substantial benefits on their bottom line. For example, a Deloitte study shows that organizations with strong cultures have seen a fourfold increase in revenue growth.

In this article, we will deeply cover four top reasons why it's time for leaders at all levels of management to adopt this cultural style.

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graphic about the impact of making the shift from HR to people and culture. A summary of the reasons that will be covered ahead.

Reason #1: Boosting Employee Engagement and Experience

It's no secret that when employees are engaged, they do their best work. But did you know that companies with highly engaged workforces are 21% more profitable? That's something to consider. The key to embracing a people and culture approach is realizing that potential. It's about fostering an atmosphere where workers are eager to contribute rather than just showing up.

This approach goes beyond the occasional team-building activity. For example, Google's renowned Project Aristotle revealed that psychological safety, more than anything else, was critical to making a team work. In a people and culture-focused workplace, efforts are made to ensure that employees feel safe to express ideas and take risks without fear of punishment or humiliation.

‍What happens when employees are more engaged? Results. When employees are happy and confident in their work, they're more productive and become advocates for your company. This means lower turnover rates and higher customer satisfaction.

Reason #2: Aligning with Organizational Culture and Leadership

Some companies seem to have a magic touch, which can often be attributed to their teams being in sync with the company's core values and leadership vision. A people and culture approach plays a huge role in this alignment. According to a report by SHRM, 58% of employees say that the company culture is more important than the salary when it comes to job satisfaction. That's a clear indicator of where the focus should be.

Prioritizing people and culture means incorporating the company's values into daily operations and interactions at work, rather than just enforcing rules or procedures. This means leaders need to walk the talk. They set the tone for a culture where values are lived, not just laminated on a wall poster. For instance, when Satya Nadella took over as CEO of Microsoft, he shifted the company culture from 'know-it-all' to 'learn-it-all', which contributed significantly to the company's resurgence.

Furthermore, employees who believe their company has a higher purpose than just profit are 27% more likely to stay at their job. They're the ones who go the extra mile, not because they have to, but because they want to.
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Reason #3: Attracting and Retaining Top Talent

Hiring and retaining top talent is like striking gold in today's competitive job market. This is where a strong people and culture framework pays off. A study by LinkedIn revealed that 40% of employees would consider leaving their job for another company with a better culture. That's a number you can't ignore.

A people and culture-focused approach is more than just appealing in theory; it deeply resonates with what today's employees are looking for in a job – a place (physical or virtual) where they're not only valued and heard but also part of a greater mission. Take Patagonia as an example: their culture, which encourages employees to embrace outdoor activities, is a living testament to their core values. This original approach has not only fostered employee well-being but also aligned the team with the company's environmental ethos, contributing to an impressively low employee turnover rate of just 4%.

Beyond the renowned brands, companies across the board are recognizing that an inclusive culture is a magnet for talent. Offering a job is just the beginning. When employees perceive their workplace truly has effective communication practices, engagement soars – 85% of them become more involved in their roles. And satisfied employees mean lower turnover rates and a stronger, more cohesive team.
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Reason #4: Encouraging Innovation and Adaptability

In a world where change is the only constant, a company's ability to innovate and adapt is crucial. Here's where a robust people and culture strategy really makes a difference. According to a survey by PwC, 79% of CEOs worldwide are concerned about the lack of essential skills among their employees. A people and culture approach addresses this by fostering an environment of continuous learning and adaptability.

When employees feel supported and encouraged to develop new skills, they're more likely to innovate and adapt to changing circumstances. Google, for instance, encourages its employees to spend 20% of their time on side projects, which has led to the creation of some of its most successful products. This kind of culture not only drives innovation but also helps in building a resilient workforce that can pivot as market demands shift.

Moreover, a culture that values adaptability and continuous learning is appealing to the workforce of today, especially millennials and Gen Z. These generations are not just looking for a job; they're looking for opportunities to grow and make an impact. Companies that provide these opportunities are more likely to retain their younger employees.

In essence, adopting a people- and culture-focused approach means staying ahead of the curve rather than merely following it. The goal is to establish a workplace that is actively influencing the future in addition to being prepared for it.
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Final Thoughts

The shift from traditional HR to a people and culture focus has grown from a trend to a strategic move toward creating a more engaged, aligned, and innovative workforce. As we've seen, this approach can lead to higher employee engagement, better alignment with organizational values, improved talent attraction and retention, and a stronger capacity for innovation and adaptability.

For leaders and decision-makers in companies across the USA, embracing this shift is about building a resilient, forward-thinking organization where people feel valued and connected to their work. In doing so, organizations are not only enhancing their internal culture but are also setting themselves up for sustained success in an ever-changing business landscape.

We at TECLA, specializing in connecting companies with the best tech talent in Latin America, understand the importance of cultural fit and employee engagement in building successful, global teams. That’s why our interviewing process goes beyond technical skills and dives into soft skills, values, and a sense of purpose.

If you are looking for top remote talent that seamlessly integrates with your company’s culture, don’t hesitate to contact us today!
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FAQs on People and Culture

What is the meaning of people and culture?

People and culture refer to a business approach that prioritizes the well-being, development, and engagement of employees. It's about creating a work environment that values and nurtures its workforce, aligning employee goals with the company's mission.

What is people and culture in a company?

In a company, people and culture represent the ethos and practices that define the employee experience. It encompasses everything from how decisions are made, how employees are supported and developed, to how the company's values are embodied in day-to-day operations.

Is HR now called people and culture?

While HR and people and culture are often used interchangeably, they are not exactly the same. People and culture is an evolution of HR, focusing more on the holistic experience and growth of employees rather than just administrative and compliance tasks.

What is a people and culture strategy?

A people and culture strategy is a company's plan to create a positive and productive work environment. It involves practices and policies that focus on developing a strong company culture, enhancing employee engagement, and fostering a supportive and inclusive workplace.