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Your Culture Is Costing You Talent
In this episode of HR2Go, Karen Arnold sits down with Stephen Woods, Director of Employee Wellness Australia, to unpack the big themes from the Beyond Compliance event. From leadership blind spots to workplace wellbeing, they explore why ticking the compliance boxes isn’t enough — and how culture, communication, and capability are the real keys to employee retention.
You’ll learn:
- Why strong leadership is your best risk strategy
- How poor culture silently drives turnover and burnout
- The real cost of losing great employees — and how to prevent it
- Practical tools like stay interviews and leadership programs that work
Whether you're an HR leader, business owner, or people manager, this conversation will help you shift from reactive to high-performing — with a workplace culture that actually retains top talent.
Introduction
Welcome to HR2GO by Effective Workplace Solutions, the podcast where we unpack the people puzzles facing today's workplaces. I'm your host, Karen Arnold. In this episode, we're picking up the conversation from the Beyond Compliance event, which I had the pleasure of co-hosting on Wednesday the 21st of May with the brilliant Stephen Woods, founder and director of Employee Wellness Australia.
Why The Beyond Compliance Event Resonated With Employers
The energy in the room was undeniable, so we thought let's keep it going. Stephen's joining me today to dive deeper into the key takeaways, the moments that really resonated and how businesses can shift from being just compliant to truly high performing. Stephen, welcome and thank you again for partnering with me on such a powerful event.
Karen, thank you so much for having me. How good was that event? It was unreal. It was fantastic.
But let's kick off with probably the most obvious question. Why do you think Beyond Compliance hit a nerve? What do you think really captured the attendees' attendance because the engagement at the event was fantastic? Yeah, I think it was a couple of things. I think first and foremost, the three areas that we're talking about, health and safety, HR and employee wellbeing, are really top of mind for a lot of people at the moment with a lot of the legislation changes.
And I think nowadays, and especially since COVID, people are really caring about their employees. They really want to make a difference. They want to understand how they can be better. And the way I see employee wellbeing going at the moment is almost like smoke alarms 20 years ago. It was a recommendation. You should probably have a smoke alarm in your house. But now it's legislation. You must have a hardwired smoke alarm. And that's honestly the way I see it going now.
Yeah, I completely agree with you, Stephen. And I certainly noticed the energy shift in the room when we moved from talking about what not to do and into that space where we really started talking about how to actually lead better and support your team to succeed. And I know you made a comment during the event that culture isn't just a free meal and fruit bowls in the staff room.
That line really landed. I actually had three people mention it to me after the event. It also appeared that those practical insights that were provided, the moments where people could see themselves and their workplaces in the examples really resonated as well.
Leadership Capability and Compliance Risk
Which brings me to one of the most talked about points on the day, the link between leadership capability and compliance risk. There were lots of nods when we unpacked that concept. So what's your take on the tension between people leadership and ticking those regulatory boxes? I mean, I think you've got to tick the boxes first and foremost.
But I think if you're ticking the boxes, that is all you're going to be doing. You're not going to get engagement. You're not going to be proactive. And you're always going to have problems. The way we chat about it is, how can we be more proactive with this stuff? How can we identify problems and how can we come up with solutions before they happen? And how can we actually care about our employees? What can we do to look after them so that they can show up for work better? Yeah, absolutely. And look, I think that's something that we see a lot of as well.
And when you actually start investigating the issues in workplaces, they often come back to something like a poor manager's conversation or maybe unclear expectations. And as I was discussing in my presentation on the day, much of this is not stemming from an actual lack of desire to do the right thing. It actually just comes from things like a lack of skill set or knowledge because the managers or the leadership team haven't been equipped with the skills and resources they need to succeed in their roles.
Perhaps they've been promoted into management positions because they're great at their job, dedicated and committed employees. But when they're faced with actually having to manage people, they don't have the relevant skills or knowledge to do this effectively. And I know, Stephen, you're talking about launching a new leadership program.
I imagine that is to speak to some of these gaps. Yeah, absolutely. So with our leadership program, we used to run it out in a one-day event. And what we noticed was, first and foremost, one day just isn't enough. Leadership is ongoing. And we also noticed that we are in the business of employee well-being, and an employee well-being is directly correlated to their leader. And usually leaders lead the way they've been led. And it's not always the best example. And I know for myself, I used to have leaders who, it's just a top-down approach. There's micromanagement. There's no clear guidelines. There's no driving towards the mission.
The Culture Disconnect: What Employees Really Feel
And there's no soft skills involved, like communication. What is that? Conflict resolution. You do what you're told when you're told.
And so, yeah, we created this kind of eight-week program to help bring leaders from zero to hero and give them room to come and express their problems, understand that leadership is hard, it's ongoing, and you're never going to feel like you've perfected it. So, yeah, that's what this is all about. Yeah, fantastic.
I mean, we work with businesses all the time where we're seeing these issues, and we did work with a business a couple of months ago where they had a high-performing team leader who was promoted into a manager's position, but within six months, three team members had resigned from his team. And, look, I don't believe that was because the manager was a bad manager or he didn't care, but it was actually more as you were just talking about. He hadn't been shown how to give feedback or how to manage conflict, which meant that those things were not being dealt with effectively in the business.
Now, the business had all the compliance policies in place, but without the capability in that space, they still ended up in risky territory, and it did actually have a detrimental impact for that business. So, you know, I think it is a common thing we're seeing in lots of businesses. But back into the event, another moment that had pens flying and heads nodding was our deep dive into workplace culture.
Now, this is a word that gets thrown around a lot, but Stephen, what does strong culture actually look like in practice in your opinion? So I think I said this at the event, but for me, culture is a feeling when you go into some place. You can feel when everyone is working together. You can feel when there's tension in the room.
You know, and I'll give you an example. If you go into a restaurant and the customer service is amazing. You know, everyone's helping each other. You know, they're working as a team collaboratively to get the job done. You can tell there's some sort of good culture there. You don't know what it is.
You don't know what they do in the background, but you can just feel it. Yeah, yeah. As opposed to, you know, you've been into restaurants before and you can see waiters or waitresses bickering because that's their table or that's their client, and you can see it's not as cohesive as it should be.
And I think the goal is how do you get your culture to a point where everyone is working together to deliver your product optimally? Because then the customer service is high. The customers are then happy, and therefore you're happy, the team's happy, and everyone's kind of winning. Yeah, yeah.
Retention, Turnover and Hidden Costs
Well, you know, for me, one of the most impactful moments at the Beyond Compliance event was when you asked the room how many people had come to work at any point in time feeling unwell or burned out or overwhelmed, and almost every hand in the room went up. It was such a powerful reminder that wellbeing's not just a personal matter but it's a shared workplace responsibility, and that again comes back to that cultural piece, how we're looking after our people so they can show up being the best versions of themselves. And it actually got me thinking about a business that we worked with last year where they had their company values plastered up all over the walls, beautifully framed, et cetera, but behind the scenes people were really exhausted and they were feeling unheard and they were just continually putting out spot fires, and the disconnect was so obvious.
And as you've indicated, you know, culture's not what you print and stick up on a wall. It's about how people feel on Monday morning when they're coming into work. It's about whether they believe that what you say matches with what you're actually doing.
Yeah, 100%. I mean, going back to your kind of point on I think talking about values and culture and having them printed and plastered all over the wall, it's one of the things we start with in the leadership foundations is what are the companies, what's the mission, and then what are the values, and then what are your values, and how does that tie into the overall mission of the company? Because what I see a lot of the time is people wonder why their employees aren't motivated, and yet they're just treating them like they should just turn up to work and leave. There's no big picture.
You know, there's no bonuses for hitting KPIs, or there's no real incentive to be motivated, and I think that really plays a part in it. So I liked kind of what you said there about it's just plastered everywhere because I think that's one of the kind of missing pieces. Yeah, really great point, Stephen.
And, of course, when wellbeing breaks down, so does retention, and that might be why that conversation around the cost of turnover struck such a chord. You shared some really eye-opening insights into not just the direct costs but those hidden ones as well, things like impact on morale, loss of company knowledge and continuity, and these are costs that businesses probably often underestimate or maybe don't even think about at all. Yeah, you see it all the time, and I think people in HR, people in culture, these numbers are pretty common for our team to understand.
You know, we probably talk about it a lot, but I think it's when it comes to our management, they don't quite understand or they don't comprehend that when you have an employee, they've got friends in the company, and this happened with a company I used to work for a few years ago, and they used to, so they lost employees, and then what had happened is they bring on these new employees, and they're so excited, and it was part of this marketing strategy. And so what happened was they ran out this marketing strategy, and as always, some things don't work and some things do. And so you go through the year, you got all this data, you got all this evidence of the stuff that doesn't work.
That person gets fired or leaves or is unhappy. New person comes in, does the exact same thing for the full year, the same ideas. So all of the IP for that year that we've just been working on is completely lost, and essentially the company's starting from scratch from a marketing perspective.
And so I think people don't quite comprehend the hidden costs of losing a good employee. It's not just their salary. It's their friends, their IP, the unsettlement, and then the cost of training the new person who comes in, finding the new person, job ads, job on seek, indeed, interview process, all of the fun stuff that takes so much time from HR or people in culture just because maybe a lack of communication or conflict resolution or whatever that may be with employee wellbeing.
Yeah, I think it is something that people really do need to think about, and again, comes back to that culture piece and that wellbeing piece around how we look after people and set them up to succeed. And look, not only does that turnover drain time and obviously cost money, but it impacts morale, and as you've identified, consistency. And we'll also see then burnout from other employees who are picking up the pieces.
Practical Solutions: Stay Interviews, Check-Ins and Training
Perhaps they've had their leave cancelled because there's gaps in the team. There's just a really big flow on effect that I think probably isn't correctly attributed to that turnover piece. And then the question can be asked about why that turnover is occurring, which I guess from what we're talking about today speaks to that culture and wellbeing and how we engage and support our employees.
But we spent some time last year reviewing exit interview data across several clients, and there was a common theme there around that lack of recognition, but also unclear expectations. And I would argue that these are leadership issues, not just HR problems. So in those workplaces, we actually implemented the concept of stay interviews where we were encouraging employers to start engaging with their employees, discuss how they're tracking and try and get ahead of these issues, and provide those employees with an avenue to have a voice.
So in terms of stay interviews, those discussions don't have to be overly formal or complicated. It can be a simple one-on-one conversation where we're asking the team member, you know, what are we doing well? What's going well for them? What could we do better to support them? And then what might tempt them to leave the business and how could we perhaps get ahead of that as your employer? And the answers can be quite surprising, as I'm sure you can appreciate, Stephen. The act alone of asking that question sends such a powerful message, and that is that we value you.
What are your thoughts on that, Stephen? Again, we spoke about this at the event. The simple things make the biggest difference. You know, I think people don't mind getting a pay rise, but they like feeling valued, and checking in with them regularly is easy for everyone to do.
It's the one thing that you can start implementing tomorrow. And I come from the fitness background, so we used to have clients, and we used to do weekly check-ins, and it was for that matter. Like, I didn't see them every day, so I didn't know how they were getting on, and I didn't know if they were enjoying the program.
I didn't know how they were getting on with their nutrition. And it's the exact same thing. Imagine you had your personal trainer, and they just didn't speak to you.
Yeah. You would naturally drift away. Yeah.
You would naturally just cancel that PT, because you wouldn't feel the value. And it's the same with the employees. Yeah, it's just such a powerful way to retain your employees, isn't it? But also to build a connection that allows you to meet them where they need to be met.
Now, Stephen, you're really passionate about employee wellbeing, and you spoke about the value of really looking after your people and investing in their wellbeing in the workplace. And at our event, you shared some stats and information on the benefit for businesses who engage in this space. Did you want to take a moment now to recap on some of that for our listeners? Yeah, so some of the data that we've got, so when we're going through this, and I'm a data person, I like sending surveys, and I like getting data so that you can work on it and be better.
Why Workplace Wellbeing is a Strategic Priority
And so when we looked at our data, companies saved, on average, just over $2,500 per employee per year. And that was mainly through absenteeism and sick days, so that's easy to track. Yeah.
And then what we also do is we send out these engagement surveys to figure out where businesses start, and then how they improve over the course of our programs. And we noticed about a 31% increase in employee engagement, and we do numerous things to do that, and so team engagement things, workplace challenges, but then also getting everyone together for wellness sessions, where we don't just focus on, you know, what is the future of AI, or like another fire drill, or a first aid course, or something that you have to do for work. This is actually something that you can take after work and into your social life and implement it, because now the company is caring about you.
Yeah, yeah, fantastic. And, you know, I felt like that data that you shared at the event really built a strong business case for diving into the world of wellness and improving how we support our people. And I think, look, you know, we know that it's the right thing to do because our employees are really integral and an important part of our business, but also just there's that, you know, morally it's the right thing to do in terms of looking after people.
But, you know, the data that you shared demonstrated how it really does drive real outcomes in terms of engagement, retention, and performance. And I thought that was really powerful for those business owners in the room to actually, you know, some people do need that dollars and cents, I guess, motivator to perhaps get on board. So, you know, it was really great information.
So just, you know, as we start to wrap up today, what would be that final big takeaway? What's that one thing you want businesses to do differently after attending the Beyond Compliance event or indeed listening today? I started the event with this, and I'll say this to your audience, is I want you to think about your top employee and what would you do if they had a stroke or a heart attack at work tomorrow and they were off work for the next two years? Because that is what happened to me with my work colleague. We were in the office, high performer. He brought in millions of dollars for the company and he had a stroke in the office and without any warning, he was off work for the next two years and no one could communicate with him to get the IP, to get the progress on the contracts, where he was with things.
He was in hospital. Luckily, he survived, but it's a stark reminder to companies because that, in my opinion, is a leadership responsibility because as leaders, we shouldn't be allowing our employees to be working, coming in early, working late, working weekends every single weekend. They need to take time off for themselves.
Unfortunately, Gordon, who I worked with, he lost his family in the process of that. He had a divorce. He had an estranged relationship with his kids just because he was working all the time for this thing that he created in his head.
And so, yeah, what can we do better? Because we can always do better and even if things are going well, the reason no one said anything to Gordon was everything was going well. We're hitting the goals. We're hitting the KPIs, the monthly targets, the quarterly targets.
Life is good for everyone apart from him. He's pushing so hard. So can we think about that and can we give someone a rest who needs it? Can we give someone the gift of well-being who needs it? And what is one action that we can take from that that we can do tomorrow or in the next seven days? Yeah, wow.
Final Takeaways: From Compliance to Connection
So even just having those leave planning discussions with your team and getting everyone to map out how they're going to take their leave for the next 12 months. We all know those employees that are sitting on little nest eggs of 16 weeks of annual leave, but what that means is they haven't been taking any leave. So that's a really powerful takeaway to just be going away, having a look at, you know, when the last time people took some time off, having discussions even about just tacking a few days onto a long weekend or something like that, just to recharge and encouraging lunch breaks.
That's a big one for me. Taking that time to step away from the desk and, you know, just take a break, maybe go for a walk around the block, get some sun, whatever it is, to just have a recharge. But in terms of, I guess, my takeaway or, you know, mindset shift I'd be encouraging is I think stop treating compliance like the end goal.
It is the floor, not the ceiling. So I think if we start investing in that leadership capability and culture in terms of them being strategic tools, not just side projects, I think we'd see a really big shift in workplace, well, workplaces in general. And if I had to make a prediction, I think with the new wage theft laws, the psychosocial safety codes and the generational shifts that we're seeing in the workforce, I think the businesses that don't prioritise that values-based leadership and employee experience are going to find themselves in a situation where they're losing both people and performance.
And, look, I'd say the future's human. I know there's quite a few people out there who would argue with me that maybe it's not with AI, et cetera, but I believe the future is human and that we need to lead in that way. 100%.
I think one of the worries that I have about AI is as humans we are purpose-driven and we crave social connection. And I think going forward the companies who will excel will be the ones who can create both of those. And so, yeah, I think as humans we love to deal with humans.
AI can speed things up, but we need humans to walk together. Yeah, absolutely. Look, Stephen, thank you again, not just for joining me today but also for co-hosting an event that sparked a real conversation and lots of action.
For those of you listening, if you missed it, stay tuned because we have got more exciting events planned. And for anyone listening who wants to take a proactive approach to workplace wellbeing, not just that tick the box, but actually build a culture where people can thrive, I can't recommend Employee Wellness Australia highly enough. Stephen and his team do brilliant work helping businesses shift from reactive to truly supportive with tailored wellbeing programs that actually stick.
So if you're serious about creating a mentally healthy workplace, head over to EmployeeWellnessAustralia.com.au and see how Stephen and his team can support your team. And if you're listening and something that we said sparked a thought, please do connect with us, share the episode, tag a business owner who needs to hear it, and let's keep building better workplaces. Thank you for listening to another episode of HR2Go.
If your business is based in Australia and you would like HR or employment law advice, visit our website, ewsolutions.com.au
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*HR2Go is the podcast from Effective Workplace Solutions for business owners who want practical, compliant, and people-first HR.*