How to improve company culture: A step-by-step guide for 2025

Ever noticed how some companies seem to buzz with energy and enthusiasm while others feel like they're just going through the motions? The difference isn't random; it's intentional culture building.

Company culture has evolved from a nice-to-have into a business essential. It's the force that shapes how work gets done, how decisions are made, and how employees feel about showing up each day. In today's competitive talent landscape, culture has become a defining factor in attracting and retaining top performers.

In 2025, the rules of company culture have shifted dramatically. Employees aren't just looking for ping-pong tables or free lunches; they want purpose, belonging, and environments where they can bring their authentic selves to work. The organizations winning the culture game understand this isn't about perks but about creating meaningful human connections and shared values that guide everyday interactions.

This article focuses on practical strategies that deliver real culture improvements. You'll find actionable, step-by-step approaches to transforming your workplace environment. We've distilled insights from companies that successfully revitalized their cultures into tactics you can implement without a massive budget or a complete organizational overhaul.

Key takeaways

• Company culture is a powerful business driver that affects recruitment, retention, productivity, and overall performance.
• Align culture with core values and mission by involving employees in refreshing values and integrating them into daily operations.
• Foster transparent communication with regular touchpoints and feedback channels to build trust and inclusivity.
• Invest in leadership development to equip managers with the skills to nurture the culture and hold them accountable for fostering it.
• Create meaningful recognition programs that align with cultural values and offer flexible rewards to cater to individual employee preferences.
• Forma helps simplify culture-building through flexible benefits, such as Lifestyle Spending Accounts, supporting well-being, professional growth, and work-life balance. <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Schedule a demo</span> to learn more today.

What is company culture?

Company culture encompasses the shared values, beliefs, attitudes, and behaviors that characterize an organization. It's essentially the personality of your company, how people interact, make decisions, and approach their work.

Culture is both tangible and intangible. The tangible elements include physical workspace, dress code, and formal policies. The intangible aspects, often more influential, include communication styles, unwritten rules, and the general "feel" of working there.

Culture isn't static; it evolves constantly through leadership actions, employee interactions, and organizational changes. When intentionally shaped, culture becomes a powerful force for alignment and motivation. When neglected, it can develop in ways that undermine company goals and employee satisfaction.

Most importantly, culture isn't just an HR initiative. It's a business driver that influences recruitment, retention, productivity, and ultimately, financial performance. According to research from Deloitte, 94% of executives and 88% of employees believe a distinct workplace culture is important to business success.

Why is company culture important for businesses?

Company culture isn't just about creating a pleasant work environment. It's a fundamental business driver that affects nearly every aspect of organizational performance. 

Here's why improving company culture should be a priority:

• Enhanced employee engagement: A strong culture fosters a deeper employee connection to their work and company mission. Engaged employees invest discretionary effort, take initiative, and genuinely care about outcomes.
• Improved talent attraction and retention: Your culture is your employer brand. Companies known for positive cultures attract more qualified candidates and retain top performers longer, reducing costly turnover.
• Increased productivity and performance: When employees align with company values and feel supported by their environment, productivity naturally increases. Research from McKinsey shows organizations with strong cultures achieve up to three times higher total returns to shareholders.
• Stronger customer satisfaction: Internal culture directly affects how employees treat customers. When employees feel valued, they extend that same care to customers, improving service quality and customer loyalty.
• Greater innovation and adaptability: Cultures that encourage psychological safety and idea-sharing foster innovation. Employees feel comfortable proposing new approaches and taking calculated risks.
• Reduced workplace conflict: Clear cultural norms establish expectations for behavior and collaboration, reducing misunderstandings and interpersonal friction.
• Better decision alignment: A well-defined culture provides a framework for decision-making at all levels, ensuring choices align with organizational values and strategic direction.

How to improve company culture — Ten things you should try

Improving company culture requires intentional action across multiple dimensions of organizational life. These ten strategies offer concrete steps for meaningful cultural transformation.

1. Offer personalized benefits and perks

One-size-fits-all benefits packages rarely create cultural differentiation. Personalized benefits show that you recognize employees as individuals with unique needs and preferences.

Organizations leading the way in employee satisfaction have implemented Lifestyle Spending Accounts (LSAs) that give employees choice in how they use their benefits. Forma's LSA solution enables companies to fund accounts that employees can flexibly use across categories like wellness, professional development, family care, or home office equipment.

Different life stages naturally bring varying priorities for employees. Parents typically value childcare support, while early-career professionals might place higher importance on student loan assistance. Meanwhile, employees nearing retirement often focus more intently on retirement planning resources and related benefits.

Regular feedback about which benefits employees truly value helps organizations allocate resources effectively. This ongoing dialogue ensures companies invest in offerings with maximum cultural impact rather than continuing to fund underutilized perks that generate little appreciation.

Even exceptional benefits programs can fail to achieve their cultural potential when employees lack awareness of what's available. Clear, consistent communication about benefits ensures team members understand and remember their options when needs arise.

The administrative experience significantly impacts how employees perceive their benefits. Complicated reimbursement processes or confusing eligibility requirements often create unnecessary friction and frustration, ultimately undermining the cultural value of even the most generous benefits program.

2. Align culture with core values and mission

Culture without clear values is like a ship without a rudder. To create meaningful improvement, start by ensuring your culture reflects what your organization truly stands for.

First, review your existing mission and values statements. Are they authentic reflections of what you want your company to represent, or are they generic platitudes? Involve employees in refreshing these foundational elements to ensure broad buy-in.

Next, identify the specific behaviors that demonstrate each value in action. For example, if "innovation" is a core value, define what innovative behavior looks like in daily work, perhaps it's challenging assumptions, experimenting with new approaches, or dedicating time to creative thinking.

Finally, these values should be integrated into operational systems. Incorporate them into performance reviews, recognition programs, and hiring criteria. As noted in Forma's guide to employee recognition, aligning recognition with core values reinforces cultural priorities while making appreciation more meaningful.

Remember that alignment must start at the top. When leaders consistently demonstrate values-driven behaviors, employees follow suit. Conversely, when leaders contradict stated values through their actions, cynicism quickly undermines cultural initiatives.

3. Foster transparent communication

Communication forms the backbone of a healthy company culture. Organizations that communicate openly build trust, reduce rumors, and create environments where people feel informed and included.

Establish regular, predictable communication channels like town halls, team meetings, and leadership updates. Consistency matters more than frequency. Employees should know when and how important information will be shared.

Practice two-way communication by creating multiple channels for employee feedback. Anonymous suggestion systems, regular pulse surveys, and open forums all provide valuable insights while demonstrating that leadership values employee perspectives.

Remember that communication isn't just about words; it's about listening. Train managers in active listening techniques and create space in meetings for genuine dialogue rather than one-way information sharing.

4. Invest in leadership development

Leaders at every level shape culture through their daily actions and decisions. Investing in leadership development ensures they have the skills to build the culture you want. Here’s how you can make your managers a part of the company’s better future culture.

• Define the right behavior: Start by clearly defining cultural leadership competencies. The specific behaviors and skills leaders need to reinforce their desired culture. These might include emotional intelligence, inclusive decision-making, or coaching capabilities.
• Target the defined competencies: Provide targeted training that builds these competencies through workshops, coaching, and peer learning groups. Focus particularly on front-line managers, as they have the most direct cultural impact on most employees.
• Hold leaders accountable: Create accountability for cultural leadership by incorporating culture-building metrics into leadership performance reviews. When leaders know they'll be evaluated on how well they foster desired cultural elements, they prioritize these responsibilities.
• Recognize and reward: Recognize and celebrate leaders who exemplify cultural values. Share their stories and approaches to provide models for others to follow.

5. Prioritize work-life balance

Work-life balance is no longer just a perk; it's an expectation. Organizations that respect employees' lives outside work build cultures of trust and sustainability.

An examination of workload expectations across different teams should be your first step. Current demands might not be reasonable, or "always-on" availability might have become an unspoken requirement. Managers should collaborate with you to establish realistic workload parameters.

Flexible work policies that accommodate different life circumstances should be implemented. These might include flexible hours, remote work options, or compressed workweeks. The Forma blog on flexible work arrangements offers practical guidance on designing policies that work for both employees and the organization.

Healthy boundaries around work hours should be encouraged by limiting after-hours emails and calls. Some companies have implemented "email blackout" periods or no-meeting days to provide uninterrupted focus time and reduce digital burnout.

Balance from the top should be modeled. Leaders who demonstrate healthy work-life boundaries, take vacation time, disconnect after hours, and discuss personal priorities give implicit permission for others to do the same. The main objective here is to not make people feel alienated for taking time off. 

6. Create meaningful recognition programs

Work culture benefits from recognition as a powerful tool that reinforces desired behaviors while making employees feel valued for their contributions. 

Here are some key strategies for implementing an effective recognition system that aligns with your organizational values and meets diverse employee needs.

• Value alignment: Your recognition programs should align with specific cultural values. For example, if collaboration represents a core value, awards that celebrate cross-functional teamwork or individuals who support colleagues' success would be appropriate.

• Peer appreciation: The democratization of recognition through peer-to-peer appreciation creates a significant impact. Digital platforms enable employees to recognize each other's contributions, fostering a culture where appreciation flows in all directions, not just from manager to employee.
• Timing and specificity: Timely and specific recognition has a greater impact than generic "employee of the month" programs. Immediate acknowledgment tied to specific actions or outcomes resonates more deeply. Manager training should include providing specific feedback that connects individual contributions to organizational impact.

• Individual preferences: Different employees value different forms of recognition. Some individuals prefer public acknowledgment, while others appreciate private thanks. Various recognition options—from verbal praise to tangible rewards—ensure everyone feels genuinely appreciated.
• Flexiblerewards: Lifestyle Spending Accounts can serve as part of your recognition strategy. LSAs provide flexibility for employees to select rewards meaningful to them, whether that's a special experience, professional development, or something else entirely.

7. Support professional growth and development

Cultures that prioritize learning and growth attract ambitious employees and keep them engaged long-term.

As an organization leader, you should establish clear development pathways that show employees how they can grow within your company. These pathways should include both vertical advancement opportunities and horizontal moves that build new skills.

Your organization should allocate dedicated learning time during regular work hours. Companies like Google famously implemented "20% time" for personal projects, but even a few hours monthly for learning signals that development is valued.

Many successful companies offer personalized development budgets through Lifestyle Spending Accounts that employees can use for courses, conferences, or learning resources relevant to their specific career goals. This approach, highlighted in Forma's professional development benefits guide, empowers employees to direct their own growth.

Other than that, your company can also implement mentoring or coaching programs that pair employees with more experienced colleagues. These relationships provide guidance while strengthening cross-organizational connections.

8. Build diversity, equity, and inclusion into your culture

Diverse, equitable, and inclusive cultures drive innovation, improve decision-making, and create environments where all employees can thrive. Here’s how to seamlessly incorporate DEI in your culture.

• Do a ‘cultural’ audit: Start by assessing your current state through demographic analysis, employee surveys, and focus groups. Identify specific gaps or challenges in representation, advancement, or inclusion experiences.
• Set clear goals: Establish clear DEI goals with measurable targets and timelines. These might include improving representation at leadership levels, reducing pay gaps, or increasing inclusion scores on employee surveys.
• Optimize processes to omit bias: Review systems and processes for bias, from hiring practices to promotion criteria to meeting protocols. Small changes, like structured interviews or rotating meeting facilitation, can significantly impact inclusivity.
• Create employee resource groups (ERGs): ERGs provide community, mentorship, and advocacy for underrepresented groups. Support these groups with executive sponsorship and resources to implement meaningful initiatives.

9. Establish feedback mechanisms

Cultures improve when organizations actively seek feedback and demonstrate responsiveness to employee input.

The most effective organizations incorporate regular pulse surveys into their routines, measuring key indicators of cultural health such as trust, collaboration, and value alignment. These organizations intentionally keep surveys concise and targeted, encouraging wider participation while allowing for more frequent check-ins throughout the year.

At the heart of meaningful feedback lies psychological safety. Organizations that separate feedback processes from performance evaluations and offer anonymity when appropriate create environments where employees feel secure sharing honest thoughts without fear of repercussions.

Nothing damages a feedback culture more quickly than the perception of a "black hole" where suggestions disappear. Organizations that thrive make a point of acknowledging what they've heard and communicating specific actions in response, completing the vital feedback loop that builds trust over time.

Many leaders find constructive feedback conversations challenging, despite their importance. By investing in comprehensive training that addresses both giving and receiving feedback effectively, organizations equip their management teams with crucial frameworks and practical experience for these pivotal discussions.

The insights typically gathered during exit interviews often come too late to retain valuable talent. Forward-thinking organizations instead conduct "stay interviews" with their high performers, proactively uncovering cultural strengths and addressing improvement opportunities before they become reasons to leave.

10. Create opportunities for social connection

Human connection forms the foundation of strong cultures, especially in increasingly digital workplaces. Here’s how to create a culture that encourages social connections.

• Move away from individual cubicles: Design physical workspaces (if applicable) to facilitate both focused work and spontaneous interaction. Consider features like community areas, collaborative spaces, and comfortable meeting spots that encourage informal conversations.
• Host regular team-building activities: It’s also a good idea to host activities that go beyond forced fun to create a genuine connection. These might include volunteer days, interest-based groups, or skill-sharing workshops where employees connect through meaningful shared experiences.
• Set better traditions: Establish traditions that mark important milestones, from work anniversaries to project completions to personal life events. These rituals create a sense of community and shared history.
• Make remote workers feel included: For remote or hybrid teams, create intentional virtual connection opportunities through digital coffee chats, online game sessions, or virtual team celebrations. These touchpoints help maintain cultural cohesion across distances.

You should also consider using Lifestyle Spending Accounts to support team-building activities. When employees can use LSA funds for team lunches, group classes, or shared experiences, they're more likely to initiate social connections.

How to implement company culture improvement strategies and their difficulty for HR

Wondering how challenging it is to implement these culture improvement strategies? Here's a practical assessment of timing and difficulty for HR teams.

INSERT TABLE HERE

Why company culture improvement deserves your attention in 2025

Company culture isn't just a nice-to-have; it's a business imperative. In 2025, organizations that neglect culture face significant challenges in attracting and retaining talent, maintaining productivity, and driving innovation.

The workplace has fundamentally changed. Employees have more options than ever before, and they're increasingly choosing employers based on culture and values alignment rather than compensation alone. Remote and hybrid work arrangements have made culture even more critical; it's what binds teams together when physical proximity is limited.

Culture improvement isn't a one-time project but an ongoing commitment. Organizations that see the greatest success are those that integrate cultural considerations into everyday decisions, from how meetings are run to how performance is evaluated to how benefits are structured.

Personalized benefits play a particularly important role in culture building. When employees can access benefits that address their specific needs, whether that's mental health support, professional development, or family care, they feel truly valued as individuals rather than interchangeable resources.

This is where Forma comes in.

Forma makes culture improvement easier through flexible benefits that adapt to your workforce's diverse needs. Trusted by companies like Shopify, Lululemon, and Twitch, our Lifestyle Spending Accounts enable organizations to provide personalized benefits that support well-being, work-life balance, and professional growth, all key elements of a positive culture.

Our platform handles the administration, compliance, and user experience, so HR teams can focus on strategic culture initiatives rather than benefits paperwork. 

<span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Schedule a consultation today</span> and see how Forma can help strengthen your company culture.

How to improve company culture: Frequently asked questions

How long does it take to see improvements in company culture?

Culture change is a marathon, not a sprint. Small changes might be visible within a few months, but meaningful transformation typically takes 1-3 years. The timeline depends on organization size, current cultural strength, leadership commitment, and the specific changes being implemented. Rather than expecting overnight transformation, look for progressive improvements in key metrics like engagement scores and retention rates.

What are the signs of a toxic company culture?

Toxic cultures typically show several warning signs:

• High turnover rates, especially among top performers
• Excessive competition between employees or departments
• Lack of transparency in communication and decision-making
• Inconsistency between stated values and actual behaviors
• Burnout and work-life balance issues
• Fear of speaking up or sharing concerns
• Favoritism or unfair treatment of certain employees or groups

What role do benefits play in shaping company culture?

Benefits significantly influence how employees experience company culture:

• They signal what the organization truly values
• Personalized benefits like Lifestyle Spending Accounts show respect for individual needs
• Wellness benefits demonstrate a commitment to employee well-being
• Family-friendly benefits support work-life integration
• Professional development benefits reinforce a growth culture
• The administration process (simple vs. complex) affects how employees perceive organizational support

How can we measure improvements in company culture?

Effective culture measurement combines several approaches:

• Employee engagement surveys with culture-specific questions
• Pulse surveys for more frequent, targeted feedback
• Turnover rates, especially regrettable departures
• Internal mobility and promotion rates
• Absenteeism and productivity metrics
• External reputation indicators like Glassdoor ratings
• Qualitative feedback from focus groups and interviews
• Customer satisfaction scores, which often reflect internal culture