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Employees are calling for significant cultural change

Australians believe their organisations need to make significant cultural change – and it’s not just the financial services sector talking but also employees across other industries. And the dial needs to move considerably from an unhealthy short-term focus on financial performance to one of long term sustainability.

Here are our top five takeaways from our workplace culture research, conducted in partnership with the Australian HR Institute.

1. Organisational culture problems are not limited to financial services

The cultural problems so dramatically revealed by the royal commission are not unique to the financial services sector. This research shows that education and training, utilities, healthcare and social assistance, professional services, government and public administration, among others, also need significant cultural change and, in some areas, need even greater change.

 

 

 

 

 

 

 

 

These results align with the anecdotal views of AHRI’s experienced HR professional members and Insync’s extensive research, including its employee engagement and culture reviews for hundreds of organisations across all industries. As one interviewee said:

“I don’t think it has anything to do with industries, it has everything to do with leaders.”

2. Over a third of organisations need significant cultural change

A huge 56% of survey respondents felt that at least some cultural change for their organisation was required, with over a third overall stating that the change needed was ‘significant’.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Respondents were also asked to provide comments as to what factors assist and hinder leaders achieving an ethical culture.

Factors that prevent leaders from achieving an ethical culture:

  • Poor leadership (including unethical behaviour and self-interest)
  • Lack of accountability and consequences for poor behaviour
  • Limited performance and behavioural measures
  • Lack of communication
  • Lack of clarity and education around vision and culture
  • Resource and time constraints
  • A short-term results focus
  • External political, stakeholder

Factors that help leaders achieve an ethical culture:

  • Ethical leadership from the top down (board, CEO and executive)
  • Clear vision and mission/purpose
  • Clear values and behavioural expectations
  • Calling out and consequence management of poor behaviour
  • Clear codes of conduct and policies
  • Clear and transparent communication
  • Training and tools to embed ethics
  • Focus on customer needs

3. The bigger the organisation, the bigger the problem

Most survey respondents had a common agreement as to where their culture needs to be in terms of most of the cultural change survey items. However those in larger organisations felt that a greater extent of change was required to reach that optimum future state.

In terms of getting the right balance between long-term sustainability and short-term financial focus, employees of larger organisations rate their current state as being quite a bit worse that employees of smaller organisations.

 

4. CEOs are out of touch and don’t believe the problems are as severe as employees think

This finding is one of the biggest concerns and possibly the most significant wake-up call for boards, CEOs, department secretaries and executives.

Whilst CEOs, department secretaries, executives, senior managers and other employees had a similar view as to “Where we should be”, CEOs and department secretaries sense of what represented reality for their organisation (i.e. “Where we are now”) was more rosy than for executives and senior managers and significantly more rosy than for employees further down the hierarchy. This was the case for most, if not all, the survey items in the research.

 

5. Competent and professional HR is a must if organisations are to change

Around three quarters of respondents agree that there should be professional standards and independent certification for HR just like other professions such as accounting, along with mandatory professional development and accountability to the professional HR body.

Many people commented about the importance of competent HR when embarking on a cultural change program.

“CEOs and executives want more and more to get someone that knows what they’re doing and has experience behind them.”

“I think if people are walking towards HR, then it’s a good sign that HR are doing the fundamentals well.”

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