Every ANZ organisation carries a number on its books that most boards have never seen. It sits across multiple budget lines, accumulates quietly through attrition, absenteeism and hiring inefficiency, and is rarely connected back to the capability conditions that generate it
Research from workforce-readiness solutions provider Cornerstone OnDemand, conducted in partnership with Great Place To Work Australia and New Zealand, has put a figure to it: a 10-point improvement in workforce culture and capability is worth AUD 1.64 million per 1,000 employees annually in Australia, and NZD 1.33 million in New Zealand.
The report, The Hidden Number: The Economic Value of Culture and Capability, draws on surveys of 452 HR leaders and 780 employees across organisations with 500 or more staff, assessing workforce capability across six areas: skills visibility, learning, career mobility, culture and trust, leadership, and AI and workforce planning. Across all six, AI readiness emerges as the most critical blind spot.
This article draws on the report’s economic impact findings, examining what the data reveals about the financial cost of capability gaps and why that cost remains largely invisible to the leaders best placed to act on it.
The hidden number
Most of this value is concentrated in three workforce outcomes: 43% from reduced attrition, 21% from reduced absenteeism, and 13% from hiring efficiency. This concentration is important because it shows where culture and capability translate most directly into economic value: retaining people, reducing lost capacity and improving hiring efficiency.
Attrition represents the single largest source of value, reflecting the significant cost of replacing talent and the operational disruption caused by workforce instability. Improvements in retention therefore unlock the greatest financial benefit. Absenteeism reflects lost productivity and reduced workforce capacity.
Improvements in engagement and workforce experience translate directly into higher productivity and more effective utilisation of talent. Hiring efficiency captures both the cost and speed of workforce acquisition. Organisations that improve internal deployment and reduce reliance on external hiring benefit from lower recruitment costs and faster time-to-fill.
Where the value sits
Culture, Engagement and Trust is the single largest contributor to workforce outcomes, accounting for approximately 30% of total economic impact. Its influence is most strongly reflected in attrition and absenteeism, making it the primary driver of workforce stability and productivity.
A one-point improvement in Culture, Engagement and Trust delivers measurable cost savings across all markets, driven primarily by voluntary attrition, followed by absenteeism and hiring efficiency. Even small shifts in culture, often seen as intangible, translate into immediate and measurable financial outcomes.
This is reinforced by Great Place To Work data. Organisations recognised as best workplaces demonstrate lower voluntary turnover than the market average: 11% versus 15% overall. On productivity, certified organisations score 86% against a 56% market average. On recruitment effectiveness, 85% versus 54%. On retention intent, 83% versus 56%.
The gap between confidence and experience
Across ANZ, organisations operate within the Progressing capability band, scoring 80.5 out of 100 on the Index based on HR leader assessments. This signals strong foundations, but clear opportunities to strengthen the underlying workforce conditions that drive performance.
A persistent gap between leadership perception and employee experience runs across all capability areas. HR leaders report significantly higher confidence than employees, suggesting that capability is often designed centrally but experienced unevenly. That gap between intent and reality is where performance risk sits.
The most significant disconnects are found in AI and Workforce Planning, Leadership and Change Capability, and Culture, Engagement and Trust: the very areas critical to executing transformation, sustaining productivity and retaining talent.
Capability as a commercial lever
Revenue, cost and profitability are measured with precision. Yet the workforce conditions that influence those outcomes are harder to quantify. Culture and capability are central to those conditions. They determine whether people are trusted, skilled, supported and able to adapt, contribute and stay. Without a clear way to quantify them, organisations can underestimate the economic value they create, protect or lose.
Workforce capability does not operate in isolation. It influences organisational performance through its impact on a set of critical workforce outcomes. These capabilities shape workforce outcomes, and it is through these outcomes that economic value is ultimately realised.
The capability pillars are interdependent. Investing in learning without visibility of skills limits effectiveness. Strengthening culture without leadership credibility reduces sustainability. Improving workforce planning without mobility restricts execution. The greatest value is realised when capability is addressed as an integrated system, where improvements across skills visibility, learning activation, mobility, leadership, culture and workforce planning reinforce one another.
For organisations operating in the Progressing or Emerging bands, the opportunity is significant. The data shows that the majority of economic value, approximately 85%, is driven by the ability to retain talent and reduce absenteeism. With up to AUD 1.64 million and NZD 1.33 million per 1,000 employees at stake, the opportunity is both immediate and material.
The question facing ANZ leadership teams is how quickly they can close the capability gaps generating that cost, and whether they have the measurement systems in place to see them clearly enough to act.
The full findings of the report, including pillar-by-pillar capability scores, the economic model connecting capability gaps to financial impact, and guidance on where organisations can begin closing the gaps generating the most cost, are now available in The Hidden Number: The Economic Value of Culture and Capability.
Brenton Smith is the vice president, Asia-Pacific & Japan, at Cornerstone OnDemand
