Protecting Workplace Culture as Your Company Headcount Grows

by Energage

Defining and managing culture in a small company is a different ball game than in a large one. That’s because according to most studies, an interesting social phenomenon occurs when your organization grows beyond 150 people.

Turns out, 150 (give or take) is the number of true social relationships any one person can manage. This number is often credited to Robin Dunbar, a professor of evolutionary anthropology at the University of Oxford, who put the range between 100 and 250.

Cohesion and productivity diminish in teams with more than 150 employees

Dunbar’s work was inspired by practices at GORE-TEX, a manufacturer of waterproofing products. In smaller GORE-TEX factories, Dunbar noted, “Everybody knew who was who. Who was the manager, who was the accountant, who made the sandwiches for lunch.”  This resulted in a greater sense of cohesion and better productivity. But once a GORE-TEX team grew beyond 150 people, they were less likely to work together as a team. So, the teams were broken up into smaller units.

Dunbar further proved his point by studying how many Christmas cards an average person sends out at year’s end (turns out, the average is just shy of 125.)

Beyond 150, it becomes difficult to build trust at an individual level. And at this scale, an organization needs to start putting formal policies in place. Thankfully though, large organizations can create other bonds to protect workplace culture and keep people united.

Belonging to a “tribe” is a need that runs deep

“Anyone who got ostracized from the group (for breaking the rules or not cooperating), would likely die a quick death trying to fend for themselves. So our need to belong to a group is a deeply instinctual need that is very much hard-wired into who we are. Throughout our evolution, it was literally a matter of ‘life’ or ‘death’.” Steven Handel, Small Habits, Big Changes

Organizations have always relied on this sense of belonging and connection to keep teams unified and workers committed to performing at their best. That’s why a common purpose, shared values, and a clear mission is the best way to ensure the relationship with their workforce remains strong. It makes sense for employees, too. After all, it’s the risk of being fired (or separated from the tribe) that keeps workers on their toes.

Organizational headcount growth presents new challenges for workplace culture

As your headcount climbs, employees may start to feel lost in the larger organization and that needed sense of belonging gets diluted. Because what used to feel like a tribe now feels like a crowded city. Now they’re surrounded by people, yet they don’t really know anyone beyond a friendly “hello” in the hallway.

And that’s not all. Working relationships also become more fluid. Teams tap into external resources such as contractors, consultants, and part-time employees. These are part-time tribe members at best, or simply separate members of multiple tribes that contribute to the sense of overcrowding.

What happens to employee engagement when your headcount increases

What happens to employee engagement as company headcount increases

At Energage, we’ve studied workplace culture and employee engagement for well over a decade. And through that research, we’ve learned the single most important measure of culture is engagement

We also see that the concept of small groups also plays out in employee engagement numbers too. When we plot engagement levels by organization size (as shown below in a sample of 7,000+ Top Workplaces participants), the trendline (in red) shows a notable decline as the organization gets bigger.

At the same time, we see a strong regression to the mean. Small companies range from 0% to 100% engaged (and yes, 0% engaged is a thing!). But as company headcount grows, we see the range narrowing towards 50%[1].

Engagement drivers are felt most strongly in small local groups. That’s why we see a wide range of scores. If a large organization is thought of as a collective of smaller local teams or communities, engagement trends toward the average.

Three ways to protect workplace culture and engagement

Based on our research and the works of others, here are three suggestions to help protect your workplace culture as employee numbers grow:

  1. Set a clear direction and check for alignment. Employees who believe in your company direction will invest more of themselves in their work because they know it will make a difference. Make time to create a concise and memorable direction statement. And then check to ensure actions – especially those of senior leaders – align with that direction.
  2. Create smaller teams to improve connection. If you’re facing challenges around communication, direction, and a sense of belonging, look to creating smaller teams where people can feel like they belong.
  3. Understand employee engagement at the local level. Be wary of company-wide, broad-brush engagement efforts. Know what’s helping or hindering engagement at the local level and then address those issues through local leaders. This is especially true at the manager-of-manager level where you might have divisional or site leaders overseeing teams at or around the Dunbar number.

Key takeaways

In conclusion, studies show employee engagement is threatened as an organization’s headcount grows. Creating smaller teams with leadership focused on the local level can foster a common sense of purpose, shared values, and a clear mission that will inspire workers to give it their all. Maintaining a true sense of community can be challenging, especially in bigger organizations. But one thing remains clear: A healthy workplace culture with employees who are engaged is better for the bottom line. And this is a truth many Top Workplaces have experienced firsthand.

[1] This represents both organizations that received the Top Workplaces recognition and those who participated but did not receive the accolade. The national average for employee engagement using the same instrument is just 31%.