with Justus Schollmeyer
The COVID-19 pandemic has triggered a massive shift to remote working. As organizations make plans for the time after COVID-19, it becomes clear that many organizations will not go back to the way things were. Some organizations already shed office space (Reuters), and many employees warm to the idea of working partly remotely (Leadership IQ).
Using a large dataset employee reviews, we have investigated how the COVID-19 pandemic affects organizational culture – the shared values, views and practices in an organization that shape people’s behavior.
A sound culture is an enormously valuable intangible for an organization. Sound organizational culture has been demonstrated to work as a backstop against misconduct and unethical behavior (Trevino et al. 1998), to be associated with substantially better stock performance (e.g. Edmans 2011), and a higher rate of innovation (e.g. Patterson et al. 2005).
Yet in the past, office life has done much to sustain organizational culture. Our go-to associations with what sustains sound organizational culture are trinkets from office-life: conversations at the watercooler, informal get-togethers, and shared outrage over meals in the cafeteria.
We wanted to know how employees see the culture of their organizations during the COVID-19 pandemic. We analyzed 148,707 reviews of organizations in the 50 companies with most reviews on the employee review platform Glassdoor as well as in three industries: Finance, Tech, and Legal and Accounting. Great thanks to Glassdoor for giving us access to the data.
Employee reviews on Glassdoor contain quantitative ratings of different aspects of an organization, including a rating of culture. Moreover, ratings include free text descriptions of pros and cons. We used natural language processing to extract information about how often employees talk about the culture of their organizations, and how they are talking about it. To understand change during the pandemic, we compare reviews submitted between March 2020 and September 2020 with reviews submitted between March and September 2019.
Here are our key findings:
- During the Pandemic, employees cared a lot more about culture than before. In fact, culture in the top five list of terms that are discussed more frequently since the pandemic.
- There is a split between four types of organizations, depending on how much positive and negative mentions of culture increase. Some organizations leverage their organizational culture, while others lose it.
Employees increasingly care about culture
Employee reviews discuss culture a lot more frequently since the pandemic hit. In the finance sector, culture is discussed 20% more often since the pandemic, which corresponds to an increase by 22 standard deviations. In the tech sector, culture is 10% more often discussed (16 standard deviations). In the Accounting and Legal sector, culture is 33% more often discussed (15 standard deviations). This puts culture in the top five list of terms that are discussed more frequently since the pandemic.
Companies win on culture. Or lose it.
Culture is more often mentioned as a strength as well as a weakness. This is partly explained by differences between companies. We find four types of companies:
- Champions experience more of an increase in positive mentions of culture than peers, and less of an increase in negative mentions of culture. These organizations appear to leverage their sound organizational culture in times of crisis.
- Organizations at risk show more of an increase in negative mentions than peers, and less of an increase in positive mentions. These organizations appear to be at risk of losing their culture during the pandemic.
- Organizations with an untapped opportunity show a smaller increase both in positive and in negative mentions of culture. These organizations do not appear to face cultural challenges, nor do they leverage culture.
- Organizations with peaks and troughs show a higher increase both in positive and in negative mentions of culture. Employees in these organizations appear to experience the culture differently, possibly due to subcultures.
Navigate to this dashboard for an interactive version and data of other sectors.
The highlighted company in the top left quadrant is an example of a “champion”. Mentions of culture as a strength have increased 40% since the pandemic hit and mentions of culture as a weakness have decreased 42% since the pandemic hit.
The highlighted company in the bottom right quadrant is an example of an “organization at risk”. Mentions of culture as a strength have decreased 20% since the pandemic hit and mentions of culture as a weakness have increased 37% since the pandemic hit.
Implications for organizations
These results show that employees are overall more focused on organizational culture, yet employees at different organizations differ in how they see the development of culture during the pandemic.
Organizations can take away the following:
- Organizational culture is likely to be affected by the shift to a remote working environment
- During the pandemic, a goo organizational culture appears to have become more relevant for employees
- Some organizations leverage their culture in the shift to remote better than others
Next for us is to better understand how mentions of culture in the Glassdoor data are related to outcomes; whether change or levels in sentiment about culture is more predictive; and which topics employees talk about when taking about culture.