Businesses have confessed to making the wrong choices in building company culture, admitting that activities deemed important are not being carried out effectively.

Penna, the human capital management consultancy, quizzed a sample of HR directors to find that 94 per cent feel their culture is distinct, with 64 per cent agreeing that this is a factor in employee retention and 76 per cent believing it is a main factor in attracting candidates.

Company culture is also having an effect on financial results, with 64 per cent saying there is a clear link between culture and the bottom line.

However, despite 94 per cent ranking rewards for specific behaviours or achievements as the most important factor in building a sustainable and successful culture, only 29 per cent said they actually do this.

Gary Browning, CEO of Penna, said: “It is great to see that organisations have woken up to the benefits that having a strong, identifiable culture can bring to attraction, retention and engagement of employees. With competition for talent growing fiercer all the time, it is essential that companies differentiate themselves as employers and get the most discretionary effort from employees.

“But despite this realisation, our research shows that it is time for companies to really invest in making it happen, in terms of rewards and motivation, internal communications and employer branding. Only through this commitment and effective measurement, will businesses see the true benefits to employees and ultimately the bottom line.”