For many workers, the pandemic was a time of great reflection that culminated in the Great Resignation. In 2021, nearly 48 million workers quit their jobs—an average of nearly four million per month. What was a significant driver behind the Great Resignation? Toxic workplace culture.
Employees want and expect more from their employers, and they’re prioritizing ethical, fair, and just workplaces over pay. In fact, an analysis of 1.4 million reviews on Glassdoor found that toxic workplace culture is 10 times more likely to contribute to an employee leaving a company than compensation. Further, employee attrition due to toxic culture was estimated to cost US employers $50 billion per year before the Great Resignation. On the flip side, companies with healthy cultures have three times greater total returns to shareholders.
As Nick Gallo, Chief Servant and Co-CEO at ComplianceLine, commented in a webinar on the ROI of compliance, “Ethical culture—a culture of integrity—more people are prioritizing this in the hierarchy of what they’re looking for in a job…If your brand is public, the court of public opinion doesn’t afford due process. If you come across as unethical, you’re done.”
In SHRM’s 2019 culture report—The High Cost of a Toxic Workplace Culture—the role of toxic business is illustrated.
Toxicity by the Numbers
76% of American workers say their manager sets the culture of their workplace
36% say their manager doesn’t know how to lead a team
4/10 say their manager fails to frequently engage in honest conversations about work topics
1/4 Dread going to work; Don’t feel safe voicing their opinions about work-related issues; Don’t feel respected and valued at work
$223B estimated cost of turnover due to workplace culture from 2014-2019
It is vital for companies to reduce toxicity in their organizations. To do that, it helps to identify the main contributors to troubling company culture.
The Toxic 5: What elements contribute most to workplace toxicity?
The average person will spend 90,000 hours at work during their lifetime—roughly one-third of their entire life. Such a significant amount of time should be spent wisely, contributing to one’s overall quality of life and wellbeing. Yet for many, toxic work environments, fueled by bullying, harassment, discrimination, and more, do just the opposite—leading to stress, anxiety, burnout and ultimately stealing one’s valuable time.
For HR and compliance leaders, understanding the elements that contribute to a toxic culture is the first step in avoiding one. According to a study recently published by MIT Sloan Management Review, the top five toxic attributes are disrespectful, non-inclusive, unethical, cutthroat, and abusive behaviors. “While organizational culture can disappoint employees in many ways, these five elements have by far the largest negative impact on how employees rate their corporate culture and have contributed most to employee attrition throughout the Great Resignation,” writes MIT Sloan Management in its report.
“The Toxic Five,” as defined by MIT Sloan Management Review analysis
Employees have made it clear that a fair, equitable, and inclusive workplace is a top priority. The new mantra for leaders, according to MIT Sloan, is “Create spaces where people feel safe, seen, supported, and inspired.”
This is a chance for leaders to press the reset button and begin to invest in de-toxifying their workplace to attract and retain workers. Assess your organizations, survey your workers, and determine if any of these five elements exist. You might be surprised where toxic culture crops up.
Stay tuned for our next post in this series—The Future of Ethical and Compliant Business—to find out how to spot toxic blindspots.
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