There seems to be a ton of people talking and writing about how to implement or improve your company culture this year.
However, I struggled to find many articles that supported their claims with any direct data about company culture. Most of them used simple claims about increased productivity, compensation, or happiness to make their points.
Now I’m not saying any of them are wrong, but I would like to see the receipts.
Thankfully, our friends at Glassdoor and MIT just analyzed over 1 million company reviews to find out what companies have the best culture.
Using those articles as a starting point, I decided to see if we could bust or confirm some of those popular claims using this plethora of data.
So let’s get started!
8 Popular Company Culture Myths:
- Myth #1: Tech companies have the best culture
- Myth #2: Company culture can be quickly improved
- Myth #3: Great company culture starts at the top
- Myth #4: Employees care most about trendy perks & benefits
- Myth #5: High paying companies have bad company culture
- Myth #6: Work/life balance is essential for incredible company culture
- Myth #7: Older companies have better culture than new companies
- Myth #8: Company culture and company performance aren’t linked
If you’re short on time, check out the infographic below:
For this article, we leveraged over 10,000 individual data points from Glassdoor company reviews over the last month.
We also used the Culture 500, a groundbreaking and first-ever online interactive tool from MIT Sloan Management Review (MIT SMR) and Glassdoor that scientifically ranks and compares the corporate cultures of more than 500 of the most powerful companies driving the U.S. economy.
The Culture 500 analyzed data from 1.2 million employee reviews from around 500 of the largest companies in the world. Then, using MIT’s world-class natural language processing, they evaluated all of those reviews.
I used that massive collection as a starting point to narrow my data set to 175 diverse companies from all over the world.
These companies were selected because they received scores in each of those 9 values of company culture. Otherwise, comparing companies with missing data points could get messy!
As you can see in the image above, those cultural values include Agility, Collaboration, Customer, Diversity, Execution, Innovation, Integrity, Performance, and Respect.
Using the Culture 500 tool, researchers at MIT were able to rank each company based on the 9 values of company culture. Each company also received a standard deviation score based on how their review score compared to the rest of the companies for that cultural value.
To make comparisons easy across the different values, I decided to focus on and analyze the standard deviation score for each company.
For example, Nvidia would get a 5 for Agility, Tesla a 3.5, and so on. This is also how Glassdoor and MIT analyzed each industry or group in their original study.
After collecting all the data I could from the Culture 500, I did the same thing for each of the 175 Glassdoor profiles I’d selected.
Glassdoor company profiles have data on salaries, interviews, company culture, CEO approval rate, and basically anything you want to know about a company.
From there, I crunched all the data for the past few weeks, and this is what I found. Now let’s bust, and maybe confirm, some company culture myths.
Myth #1: Tech companies have the best company culture
It doesn’t matter what kind of media you consume, it’s pretty common to see tech companies portrayed as having the best offices, perks, and general company culture.
Sometimes it’s pretty accurate, like with the open-concept offices, free gym memberships, and ping pong tables. In fact, Venngage has an open concept office, but I have yet to see anyone try to bring a ping pong table in. Yet.
The thing is though, all of the stories and experiences you probably have heard about are very anecdotal, embellished, or even heard second hand.
I wanted to know if the cold hard data from Glassdoor and MIT’s Culture 500 supported this claim at all.
Before we jump into the data, we should probably talk about how I determined what constituted a “tech company”. Because that’s kinda a blanket term these days.
Each company was assigned a category in both the MIT study and on their Glassdoor profile.
I used both of those categories to determine if the company was actually a tech company at heart. So to be labeled a tech company, in this study, the companies had to check both boxes.
According to the sentiment analysis data from the Culture 500, those 41 tech companies definitely have better culture. On average, these companies received over double the standard deviation scores across the 9 cultural values.
Now let’s see how that breaks down across the 9 cultural values that Glassdoor and MIT identified. In this graph, we look at the average standard deviations for each group across those 9 values.
As you can clearly see, tech companies mostly outpaced the others across the 9 cultural values.
They excelled in traditional tech buzzwords and categories, like Innovation, Execution, and Agility. The only places that they didn’t outrank the other brands were in Customer, Integrity, and Diversity.
With tech companies seeing higher average ratings for 6 out of the 9 categories, we are on our way to confirming this myth.
But before I make any grand conclusions, I think it’s important to look at some of the raw review ratings on each of the brand pages.
All 5 of the highest reviewed companies were tech brands, so I’m guessing this data will support the earlier claims.
These tech companies also received higher average scores across every individual category, with Culture & Values having the largest margin between the two groups — at 8% larger.
As you can see above, tech companies continue to outpace all of the other companies, which further pushes us towards confirming this myth.
The final thing I want to look at before passing judgment on this myth is the Recommend to Friend score for each group.
Because if you don’t want your friends working with you, could the culture and atmosphere really be that great? Well, maybe not all your friends, but at least a few.
Again, the tech companies come out on top in this matchup.
Now that we have looked at over 10k data points and crunched all the numbers, I think that I can safely confirm this myth!
After working in the tech industry for 5+ years this really doesn’t surprise me…but I actually thought that the numbers would be a little closer.
That said, I am very happy to finally have a data-driven answer when my friends ask the question, “Does tech have the best company culture?”
Myth #2: Company culture can be quickly improved
The first employees of your company started building its culture and employer brand from day one.
It really doesn’t matter if your company was founded in the last year, or in the last century. Each problem, decision, and simple achievement has added up to what you see today.
However, a lot of brands seem to think that by making a few changes, or by bringing in new management, that your culture will improve overnight.
To test this myth, I decided to look at the Glassdoor review trendlines of each of the 175 companies in our data set. These trendlines track the ratings of each main review factor over the past year, like so:
For each of the main review factors, I identified whether the trendline was “Positive”, “Negative” or “Flat.” In the example above, the trendline for Culture & Values is moving down, so the culture has probably gotten worse over the past year.
To analyze this myth, we are simply going to look at how many companies have actually had a positive trendline over the past year.
When I started collecting this data, I thought that most companies would have a flat trendline.
But actually, 36% of the 175 brands were trending negatively.
And as you can clearly see below, over the past year only about 33% of the companies I looked at were trending upwards.
That means about 67% of the companies we looked at either had flat or a negative trendline for Culture & Values.
Although this is a rather simple analysis, I think it busts the myth that you can quickly improve company culture.
I want to note one thing before we move on: it shouldn’t be seen as a bad thing if a company has a flat trendline according to the data.
As you can see below, the brands that had flat trendlines virtually had the same company ratings as ones that had a positive trendline. If you are wondering, the average score total review score was 3.72 for our data set and 3.34 for all companies on Glassdoor.
And there was basically a rounding error between the flat and positive trending companies for Culture & Values.
For this part of the study, the average review rating was 3.73.
Myth #3: Great company culture starts at the top
It would make sense to believe that the companies that have incredible company cultures also have great leaders.
Like I said before, company culture compounds and grows throughout the years. Usually, to get to a leadership role, you have to be at a company for an extended period of time too.
Or if they were hired away from another company, they probably were doing something right.
Those longtime leaders probably have the most influence on shaping company culture. They might have even started something that changed the way employees feel about the company culture.
So I wanted to see if having a dynamite leadership team actually can lead to great company culture.
For this myth, I collected every CEO approval rating for these 175 companies and the review ratings for Senior Management.
The CEO approval rating is based on a percentage of people that approve of the CEO. For example, 91% of Facebook employees say that they approve of Mark Zuckerburg as CEO.
The average CEO approval rating for the companies in my sample clocked in at 83%, with the majority of companies clustered towards the top and falling in the 80% to 89% range.
To make analysis a little easier, I broke the companies into groups based on their CEO approval rating score. The ranges can be seen below:
The companies with a 90-99% CEO approval rating also averaged the highest Culture & Values ratings.
It might not look like there is a big difference between the highest and lowest-rated CEOs, but the gap is actually over 20%.
Additionally, once you take a look at the 9 cultural values data from the Glassdoor and MIT study, the importance of a great CEO is crystal clear.
This graph not only confirms that a great CEO can exponentially improve your company culture, but also shows that a bad one can hurt it substantially!
Honestly, I imagined that the difference between companies with great and average CEOs to be a lot smaller.
But I think that this shows how important it is to have people at the top who champion your company culture. This also includes directors, managers and other leaders that work with employees on a day-to-day basis.
The CEOs might be the face of the company and set the cultural tone at the top, but it’s the managers that put all of those ideas into motion and deal with conflicts that arise.
Now let’s see if the reviews for Senior Management follow suit.
As you can see below, companies with top-notch managers have about 17% higher company Culture & Values ratings than the average rating of 3.26.
Companies with the lowest Senior Management scores received almost 50% lower Culture & Values ratings. Not a good look!
However, the 9 factors of company culture data from the Glassdoor and MIT study again tells a much more impactful visual story.
The massive gap between the best and average managers wasn’t surprising to me at all. After all, these leaders in your company interact with employees on a more regular basis.
Additionally, if your company is growing and you’re hitting all your goals, you probably will have a positive opinion of the CEO. At the same time, you could dislike your managers because they make your workday a negative experience.
That said, I’m going to confirm this myth, with a slight caveat. Instead of saying great company culture starts at the top, I think a more accurate claim would be that great company culture starts with a group of strong managers across the company.
It doesn’t matter if you’re trying a new management style, or a whole new management team, make sure it fits your culture. Or the negative effects will be felt at every level of your company.
Myth #4: Employees care most about trendy perks & benefits
If you weren’t aware, we are currently in a job-seekers market. Some people are actually calling it a war for talent.
This basically means that because there are so many open positions with relatively high employment, the people looking for jobs have all the power. This leaves companies fighting for employees in a limited talent pool.
A popular tactic that companies use to attract top talent is to offer trendy perks to stand out from their competitors. Offering things like gym memberships, a trendy office, office dogs, and more to get people interested in working there.
Now if I’m being honest, perks like that would have instantly attracted me to a company in my youth.
As I have gotten older, I have seen the need to match those cool perks with traditional benefits. With healthcare and retirement costs soaring for our generation, I’m guessing that there are many other people coming to that realization in their careers.
Those trendy perks are a great way to get an employee in the door and excite them for the first few months.
With the right traditional benefits, you can keep someone happy at a company for years.
Because these benefits and perks can truly affect the company culture in the long run, I wanted to see if I could bust this myth for good.
As you can see below for each company on Glassdoor, they rank the three most frequently referenced benefits based on individual reviews. With the most commented upon benefit in the first spot, and so on.
There are around 50 types of perks and benefits that employees can comment upon while reviewing a company.
For this myth, I collected and analyzed the three most referenced employee benefits for each of the 175 companies in my analysis.
To be honest, I was a little hesitant to use this type of data at first because it felt too simplistic. Those fears were quelled when I realized that if someone reviews a benefit negatively, it still shows that this benefit is very important for them.
So to bust this myth, let’s look at what the most commented upon benefits were across all of the companies.
Unsurprisingly, according to my research, 54% of the companies had Health Insurance as their most referenced benefit, with 401k Plans and Vacation & Paid Time Off following.
If you’re interested in how many times the top benefits were mentioned across all companies in my analysis, take a look at the graph below:
This shows that statistically speaking, about 90% of the companies had Health Insurance and 401k Plan in taking up two of the three top review spots. Wow, that’s some domination.
After looking at these two graphs, I think we can, pretty resoundingly, call this myth busted.
In fact, popular perks like Work From Home, Flexible Hours and Free Lunch were only mentioned a few times.
The lesson here is that these trendy perks are nice to have but make sure your company has incredible traditional benefits.
Especially because we are still in a candidate-driven job market. If your traditional benefits package isn’t up to snuff, then an ideal candidate, or even an employee, will go somewhere else.
Now I know that these traditional benefits seem harder to visualize and explain to new candidates, but I bet we have some social media templates that can help you out!
Myth #5: High-paying companies have bad company culture
As the most glorious Wu-Tang Clan said, “Cash rules everything around me”. But Biggie also claimed, “Mo money, mo problems”. So when it comes to company culture, which one is it?
I think that some people believe that higher pay can actually make up for poor company culture. Or that these high-paying positions attract the wrong type of people, and it hurts the overall company culture in the long run.
In this section, I’m going to figure that out and, hopefully, bust the myth that you can’t make great money and have amazing company culture at the same time.
To get an idea about how all of these 175 companies in my analysis pay their employees, I collected the reviewed salary and average salary range for each of the 20 most reviewed positions.
To make direct comparisons a lot easier, I converted each salary into a percentage point based on the stated range.
So if the salary range was between $50k and $100k, and the reviews stated a $75k salary, it would fall on the 50% mark. The average for all of the salaries was 42%–so not exactly in the middle, but close.
For the first part of the analysis, I broke down the companies into two simple groups, depending on if their average salaries fell above or below the data set average of 42%.
I found that the companies that paid more on average across the board had higher average Culture & Values ratings:
As well as higher average standard deviation scores across the 9 cultural values from the Glassdoor and MIT Culture 500 study. This means that the companies that had great company culture also paid above the study average.
Next, I decided to break it down a little more to see exactly how much above the industry average leads to the highest Culture & Values ratings.
It looks like paying 7% above the industry average is the sweet spot if you’re looking to improve your culture strictly with salary increases. The average company culture scores from the Glassdoor and MIT study reflect this finding as well.
I think after looking at all these graphs and charts we can bust this myth. As average pay increases for a company, it looks like their company culture improves.
Myth #6: Work/life balance is essential for incredible company culture
Being able to maintain a healthy work/life balance in this day and age is almost impossible for some people. In fact, the US ranks 30th out of 38th for work/life balance.
Especially because you can be connected to your coworkers or the office at almost any time. Or you can’t even leave the office at a normal hour.
Sometimes it can feel like your professional and personal lives have merged into one, and that’s never a good feeling. Thankfully, it seems that companies seem to be realizing that this isn’t healthy for their employees or the company as a whole.
Improving work/life balance has become a huge trend over the past few years to try to combat both burnout, low productivity, and turnover.
It’s no joke that burnout has become a real problem for this generation. Costing the economy about $190 billion in healthcare expenses and lost productivity
Because of this, I wanted to see if companies with high scores for Work/Life Balance also had great company culture ratings across the board.
As you can see below, the companies which score between 4 and 4.5 on Work/Life Balance scores have the best culture scores. Clocking in at 11% over the next range:
The results from Glassdoor and MIT’s Culture 500 also shows that those companies with high Work/Life Balance ratings usually have the best company culture:
These two graphs easily confirm the myth, great company culture requires a healthy work/life balance.
Additionally, it seems that if employees can maintain a healthy work/life balance in their role, they have a more positive outlook for the future of their company.
My analysis shows, illustrated In the graph below, the companies scoring between 4 and 4.5 on work/life balance have a 70% score for positive business outlook. This is about 19% higher than the average for the whole data set:
Basically this means that as work/life balance improves, your employee’s view the future of your company will also increase. This may seem like a given, but it’s always good to have some data to back it up.
Myth #7: Older companies have better culture than new companies
Great company culture isn’t built overnight. So following that logic, the companies that have been around longer should have the best company culture.
These companies have had a long time to shape and improve their culture since they were founded. Plus, if a company has been around for 100-odd years, they must be doing something right.
But because they have had all that time, there are often a lot of rigid procedures, processes, and rules in place.
Older companies may be slow to react to workplace culture trends like working from home, improving work/life balance and others.
Newer companies might not have as many processes and such that are set in stone, which helps them react quickly to changing trends. But those brands may also not have had the same amount of time to build a strong company culture, like some of the legacy brands.
Depending on how you look at it, either group may have better company culture.
Below you can see the average Culture & Values scores for companies younger and older than the average company age of around 81 years old:
Obviously you can see that brands younger than the company average have higher Culture & Values scores. The same can be seen when you look at the cultural value scores from the Glassdoor and MIT study:
We could try to bust the myth right here with this simplistic analysis, but I think we need to break it down a little more. Especially because a company that is 81 years old is probably older than any of its current employees.
I decided to breakdown the groups into 25-year increments, which you can see below:
Based on our findings, it looks like the younger companies tend to have better Culture & Values scores.
Companies under 25-years old lead the pack, and the scores basically decrease as age increases.
If we break it down even further, the same trends emerge but the gaps between new and old companies are more significant:
For some reference, Google, a somewhat young company was founded about 20 years ago! So they would fit in the range with the highest company culture scores.
Here is how the scores from the Glassdoor and MIT study breakdown based on the original 25-year increments:
Looking at those scores show us almost the exact same thing, but with a much larger gap as the age increases towards 100 years old.
Surprisingly the scores start to increase after that milestone, which may show that those companies that truly survive that long have company culture figured out.
We can call this myth busted, which was actually surprised me. I anticipated younger companies having better company culture, but didn’t think it would be so cut and dry.
Myth #8: Company culture and company performance aren’t linked
Convincing a leader or company to invest in building company culture can be difficult these days. Especially if your company seems to be hitting all of their goals and growing consistently.
I mean why would you spend money and time to fix a problem that isn’t there?
Well, it might not be a problem now, but it will be if ignored. In fact, we just saw how older companies significantly lacked behind newer ones in the previous section.
A lot of the pushback probably comes from people who don’t see the direct value. Or don’t understand how important positive company culture is for their bottom line, business outlook, and future earnings.
But if you have made it this far in the article, you know how wrong they are. That said, it would be nice to have a piece of data to bust this myth.
Now I could have looked at all the profit and loss statements for these 175 companies, but I don’t think that would have told us anything significant. Instead, let’s look at Positive Business Outlook scores for each brand:
For this score, Glassdoor asks each reviewer: “Do you believe your company’s business outlook will get better, stay the same or get worse in the next six months?”
The percent score simply shows how many of those reviews said that it will get better.
In the graph below, as Culture & Values scores increase, the Positive Business Outlook scores increases as well:
The data from the Glassdoor and MIT study follow this pattern too. With the companies who have the highest Positive Business Outlook, also averaging the highest culture scores.
Basically this shows that company culture and company performance are linked and busts the initial myth. If you want to show this to your manager, go ahead.
Congrats, you made it to the end of this massive deep dive into company culture!
This was a lot of work to put together, but it was worth it to get some data about these common myths.
The final company culture myth-busting tally is as follows:
- Confirmed – Myth #1: Tech companies have the best culture
- Busted – Myth #2: Company culture can be quickly improved
- Confirmed – Myth #3: Great company culture starts at the top
- Busted – Myth #4: Employees care most about trendy perks & benefits
- Busted – Myth #5: High paying companies have bad company culture
- Confirmed – Myth #6: Work/life balance is essential for incredible company culture
- Busted – Myth #7: Older companies have better culture than new companies
- Busted – Myth #8: Company culture and company performance aren’t linked
I think that the biggest surprise from the data was how much of an impact salary seems to have on company culture.
What was the biggest surprise in your opinion? Comment below or shoot me an email!
If you want to learn more about company culture, employer branding, and HR trends in 2020, check out these two articles: