If you found it hard to compete for talent in 2019, brace yourself: The talent war is about to get tougher. Recently the slowing economy put pressure on companies to sustain their growth, which also intensifies the need to hire people critical to that growth.

This has two important implications: One, companies are all trying to hire at the same time. Two, talented folks are in a position to choose from multiple opportunities at the same time. To add to this challenge, there are few workers looking for jobs right now.

To manage this challenge, many small and midsize businesses are focused on improving their compensation packages or employee perks. While this is a reasonable approach, it overlooks a potentially more powerful tool for talent recruitment and retention: culture.

Culture influences whether the best people choose your company, remain with your company or leave your company. In fact, strengthening your company's culture can deliver three important benefits:

1. Employee engagement and performance will improve.

A strong culture acts like a magnet that keeps good employees close to a company. When employees feel like they fit with their company's culture, they form an emotional connection to their work and colleagues. This both improves engagement and boosts performance.

2. Outside talent will want to work for you.

Your company has a certain vibe that is obvious to outsiders, even if it's not obvious to you. This vibe stems from your culture and radiates out through your employees -- both through their interactions with customers and conversations with family and friends. Talented people will take notice and gravitate toward your company if your culture resonates with them.

3. People who don't fit your company will self-eject.

In the same way that culture can attract the right people to your company, it can also repel or eject the wrong people -- those who don't, won't or can't align with your culture. Culture defines acceptable behavior for employees, and it calls out inappropriate behavior. If your culture is strong, employees will enforce those boundaries through their own actions. Meanwhile, job candidates or employees who are unwilling to abide by those rules will pull away from your company.

This may be the opportune time to invest in your culture. In Vistage's latest survey of 1,518 CEOs from small and midsize businesses, only 11 percent of respondents reported satisfaction with the strength of their culture. In other words, there is major room for improvement. If you take this opportunity to strengthen your culture, and you are likely to gain a competitive advantage -- and potentially even steal some of your competitors' talent.