Toxic Workplace Cultures Cost Companies Billions

Toxic workplaces make employees dread going to work because they are stressed and don't feel they can be honest with their manager.  

Quite quitting has degraded “useless staying.” The economy has changed so people are now staying in their jobs, even if they hate them. The biggest reasons people hate their job is bad managers and toxic workplaces. So, what makes a culture toxic? Research has found that five elements will destroy your corporate culture.

The Top Five Killers

1. Disrespect

This is when employees believe they are being disrespected by their superiors in the workplace. It’s the largest negative element that impacts an employee’s perspective of their company.

2. Non-inclusion

When companies do not promote an inclusive environment for their staff, especially women and people of color, they feel disrespected and left out. This leads to negative even toxic cultures. 

3. Unethical Behavior

Asking employees to engage in or fail to support the reported activity of unethical behavior, dishonesty, and a lack of regulatory compliance is a big red flag. It signals that managers have no regard for the individual.

4. Cutthroat Atmosphere

Employees will often complain about uncooperative teammates or the lack of team spirit across organizational silos, however, when employees feel aggressively undermined and attacked by colleagues it becomes cutthroat.

5. Abusive Bosses

Bullying bosses and abusive management are notorious for humiliating employees in front of others. This develops a hostile culture among the team. Workplace abuse negatively impacts the health and well-being of staff. It is toxic and deadly harmful to the company.

American businesses lost $223 billion over the last five years due to bad workplace culture, according to a report from SHRM.

Reported on October 17, 2019

One in five Americans has left a job in the past five years due to bad company culture. The cost of that turnover is an estimated $223 billion, according to a new Society for Human Resource Management (SHRM) report on workplace culture.

“Billions of wasted dollars. Millions of miserable people. It’s not a warzone—it’s the state of the American workplace,” said SHRM president and CEO Johnny C. Taylor, Jr., SHRM-SCP. “Toxicity itself isn’t new. But now that we know the high costs and how managers can make workplaces better, there’s no excuse for inaction.”

The report, The High Cost of a Toxic Workplace Culture, surveyed American workers to explore the impact of workplace culture on both the well-being of workers and the bottom line of businesses. It found toxic culture costs companies a fortune in turnover and absenteeism; highlighted common indicators of bad workplace cultures, such as discrimination and harassment; and underscored the alarming impacts on employees.

The research also uncovered a seemingly critical skills gap at the management level. SHRM found employees hold managers—more than leadership or HR—most responsible for culture. They also say their managers often lack the soft skills needed to effectively listen, communicate, and ultimately lead. Findings include:

  • Nearly half of the employees (49%) have thought about leaving their current organization, while nearly one in five have left a job due to culture in the past five years

  • Turnover due to culture may have cost organizations as much as $223 billion over the past five years.

  • Seventy-six percent of Americans say their manager sets the culture, yet 36 percent say their manager doesn’t know how to lead a team.

  • Twenty-six percent say they dread going to work. In addition to this workplace culture report, SHRM also released its 2019 Workplace Fulfillment Index, which revealed 44 percent of Americans feel extremely or very fulfilled in their current job compared to 56 percent who feel less than fulfilled at work.

It also explored which factors contributed most to fulfillment, and found workers ranked cultural factors, such as meaningful work and flexibility, as more fulfilling than factors such as commute times or professional development.

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