Speaker 1: The world is changing. Millennials now make up the majority of the workforce and they're looking to work for companies that prioritize culture. But what makes great culture? In this video, we'll share the three critical components that make a positive company culture and what actions you can take to shape that culture. Hi, I'm Noah. I'm the head of people here at Gusto, and on this channel, we help people leaders like you build amazing cultures by recognizing and engaging your employees. So let's talk about some major ways work has changed. First, many companies have moved to remote or hybrid work due to the pandemic. And this is making it difficult for your people to feel connected and engaged. Microsoft report shows that 83% of organizations have or already have gone remote or hybrid. Second, millennials and the Gen Z generations are now the largest segment in the workforce. And they're looking for companies where they feel their contributions matter and are valued. They feel supported and included. They feel connected and empowered to grow. And they feel aligned with the values and mission of your organization. They want to feel like they belong. And a recent report by Lattice showed that millennials and Gen Z, these generations, are twice as likely to leave an organization if they feel that they don't belong. Third, the ease of which information is shared, copied, and reused between competitors means that anything you do on your sales, marketing, product side can and will be copied by your competitors. Any tactical advantage you can get from these departments is fleeting and needs to be constantly re-imagined. And last, and really important, are the major societal shifts we're seeing out in the news and the media. COVID, Black Lives Matter, the war in Ukraine, Roe versus Wade, these upheavals and major events are affecting our employees, weighing them down, and impacting their mental and emotional well-being. Culture is the only sustainable competitive advantage that we have. And according to McKinsey's survey, 94% of his senior executives say culture is the most important thing for innovation. No one wants their company to be a bad place for work. Now, there are a lot of challenges when it comes to culture. First, there's lots of misconceptions about what culture actually is. Some people think it's driven by the executive team, some people think it's driven by HR, and some people honestly just don't know. And only 28% of executives understand their personal culture in their organization well. Just 19% believe they have the quote-unquote right culture. Now, they might have to make an attempt with ping pong tables, team lunches, Zoom calls, maybe even a company offsite. But if there's no framework and no structure around your culture with clear owners, then you're really leaving it up to chance, which is very risky, and I'll tell you why. So believe it or not, Gusto really failed to focus on our culture early on in our early days. We were so focused on the product and selling and just trying to get some traction, which was slow going for a few years. And Gusto wasn't focused on the culture. It was being forgotten, ignored, and no one was taking ownership for it. And we got a wake-up call in the form of a one-star Glassdoor review. Now, this gave the company the shake it needed. We were selling recognition, but we weren't even doing it internally. This was when we decided to make our people and culture our top priority. And we began to think deeply about the framework and what actually made good culture. So when we started thinking deeply about culture and really trying to focus on it and talking to our clients about it, we came up with a framework that has three key components, purpose, opportunity, and wellbeing. So, and we like to call this our PAL model. So why did we choose these things? So first, purpose. Our people need to understand how their job is meaningful and what makes their contributions impactful to the business goals. Remember the report by Lattice that I talked about? Many in your organization need to feel purpose before they can feel any sort of belonging at work. Purpose at work, alignment with values and mission, as well as being recognized for contributions all drive an increase in a sense of belonging. Now, let's look at a couple of stats. This first from a William Scheinman report shows that only 14% of employees know their company's direction. So let that sink in a bit, 14%. You can't drive purpose and belonging if the majority of your company has no idea what direction your company is going. And 64% of millennials won't take a job if a company doesn't have a strong sense of corporate social responsibility. So your employees really need to understand your company's purpose, both from a business and social responsibility standpoint for you to have that success and create that sense of purpose in your employees. So let's talk about opportunity. Our people need the chance to develop new skills, feel challenged, have a voice, experience success, as well as failure. They'll be more engaged, more likely to innovate, and also support each other. A recent report from Aspect 43 shows that 59% of millennials rated career growth as extremely important as something they look for when accepting or staying in a role. And the other 41% rated opportunities for mentorship as extremely important. Both major opportunities for people to see the path of growth and success. So if we're not providing those opportunities for our team, they'll find it somewhere else. So now let's talk about wellbeing. Our people need to see it as a company priority. They need to feel part of a community that embraces their individuality, that their company's inclusive and can be a safe space where they're supported mentally and physically and emotionally. When they can do that, when they see all that, they can bring their strongest, most capable and authentic selves to work, which will drive innovation, productivity, and create a better work environment. That same Aspect 43 report of over a thousand employees shows that 51% of employees are in active burnout at work. That's one in two. It's half of your workforce. And that jumps to 62% if you're looking at just us HR people leaders. The same study showed that 36% of employees rated their mental health and 35% rated their physical health as a top concern. Our people need to see that their wellbeing is important because it is. If your team is burnt out and suffering mentally, they will quietly quit by disengaging and productivity will drop. Hey, I hope you're enjoying this video. If you are, please hit the like button and subscribe so you don't miss out on our upcoming videos. Hey everyone, we've seen how Better Culture has helped Gusto grow. How do you think Better Culture could help your organization? Let us know in the comments. Focusing on culture isn't the easy thing to do, but it is safe to say that it is worth it. Gusto is just one example. And we've seen our business grow over a thousand percent in the past three years. Our headcount increased by 220% just last year and our turnover is below 2%. And we're just one example. There are many more out there of why focusing on culture provides a framework for success over the longterm. To recap, we believe the three most important parts of building a great culture are purpose, opportunity and wellbeing. Leaving culture to chance is risky, but by intentionally building your company culture, you can have a more productive and engaged workforce built around trust and accountability. We believe that recognition plays a role in building a great company culture. We believe in it so much, we built a company to do it. In our recognition guide, we cover six easy steps to roll out an impactful recognition program. Click the link below to download your copy today. Hey everyone, if you found this video helpful, hit that like button as it really helps get the video out to more people. And if you want more culture building content, be sure to subscribe. Ring the bell icon so you don't miss another upload. Thanks for watching and don't forget to recognize someone for a job well done today. Mucho gusto.