If you’re seeing a wave of resignations at your company, you’re not losing your team to more compelling offers. They’re fleeing your toxic workplace.
A toxic work culture is the number one predictor of employee turnover, according to research from MIT Sloan School of Management. Analysis of 1.4 million Glassdoor reviews found a toxic corporate environment to be 10 times more powerful than compensation in predicting attrition.
With over 40% of the workforce considering a job change this year, retaining your top-tier staff may require more than pay bumps and extra perks. Your team may have to undertake a complete overhaul of your culture.
So how do you know if you’re at risk of losing employees to a toxic workplace? There are five hallmarks to watch for, says Donald Sull, senior lecturer at MIT Sloan. These workplaces are “disrespectful, non-inclusive, unethical, cut-throat and abusive,” Sull explains. In other words, if your employees feel they don’t have equal access to the resources they need to be successful — whether that’s respect, autonomy, time, knowledge or funding — then you are likely operating in a toxic culture.
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Toxic workplaces are rarely one person’s fault. These environments develop over time and can be difficult to spot if you’re a company stalwart with years at the same employers. You may not even be fully aware that you are leading in a toxic environment. Recognizing toxicity is the first step in making lasting change. Here’s what to look for.
1. High Rates of Turnover
Look at your company’s rate of attrition to see if there’s been an uptick over the past few years. If a spike correlates with a major change or event at your company, look at the shift’s impact on your culture. Executive coach Julie Bonasso encourages leaders to be especially mindful of employees in the earlier stages of their careers. See how these employees change over time. If these workers start out driven and energetic then leave a few years later burnt out, Bonasso says you may have a culture problem.
Annual attrition rates vary by industry, but the national average has ranged between 25% and 32% over the last five years, according to the U.S. Bureau of Labor Statistics. If your company’s rate of resignation stretches beyond this bracket, it’s time to make a change.
2. Increased Number of Incident Reports
Abusive workplaces can be a breeding ground for discrimination and bullying. Keep tabs on the number of incidents being processed by human resources or even popping up in conversations with your direct reports. Pay attention to any themes that emerge — micromanaging, overwork, disrespect. Are these complaints centered upon a certain department or business unit? If so, you know where to start making changes.
3. Waning Participation
If you’re in a meeting and you notice increasing levels of reticence on the part of your employees or colleagues, that could be a sign of a big problem. Quiet teams are rarely healthy ones.
Pay special attention to your top performers. Have you noticed your most-engaged employees have now gone silent? Have the people who used to volunteer for new projects stopped raising their hands? Bonasso recommends looking for patterns in who’s pulling back. If you notice that a certain demographic or department is staying silent, you may be able to pinpoint who is most affected in a toxic work environment.
4. A Lack of Psychological Safety
In a healthy workplace, employees feel supported, do not fear for retaliation and have autonomy over their jobs. Toxic work environments police employee actions and can become disciplinarian. Madisen Swenson, a creative strategist, recently decided to leave a company with a culture of surveillance. After receiving tough feedback from a boss, Swanson cried on a Zoom call with a co-worker. “A few days later, I was called in for disciplinary action for complaining to a colleague,” Swenson says. “Regardless of whether they gained that information through employee gossip or through the recently-mandated spy software, I knew I needed to leave immediately.”
5. Failure to Promote Diversity, Equity and Inclusion
In healthy working environments, employees from all backgrounds have access to the same opportunities — whether that’s formal opportunities like promotions or informal ones like sharing expertise on an important decision. In toxic environments, underrepresented groups are excluded and may even face discrimination. Your employees will also be able to identify hypocrisy. Making a verbal commitment to diversity, equity and inclusion can be demoralizing when the day-to-day does not reflect these values.
6. Malicious Compliance
Malicious compliance takes place when employees follow a rule in a way that makes their colleagues’ or managers’ work more difficult. For example, you may ask an employee for more regular updates on the progress of a project. If they respond by emailing you incessantly with minute details, then you’re dealing with malicious compliance. Pragya Haryani, a market analyst for software selection company SelectHub, writes that this kind of behavior can be a reaction to feeling a lack of autonomy over how one’s work is done. This can also be a response when employees are asked to engage in unethical behavior.
Strategies to Combat Toxicity
You may recognize some hallmarks of toxic behavior at your company. Or, perhaps the challenges are limited to one department in an otherwise healthy organization. Start by pinpointing areas most affected by a toxic work culture. Is it one department? One leader? Is it…you? Finding the source can help you determine the best path forward.
If you’ve identified that the locus of toxicity is contained to a certain area, your best strategy may be to offer your top employees the ability to move laterally, rather than lose them altogether. In fact, Sull and his colleagues found that opportunities for lateral moves are significantly more predictive of retention than promotions. You may also determine that a single toxic person needs to be reassigned to give their colleagues a chance to reset. Coaching for your struggling manager offers another solution.
Invite constructive feedback and act on it. Ask for input through a survey. Then get a trusted colleague to help you honestly and accurately analyze results. Keep submissions anonymous to encourage candor.
Bonasso recommends that leaders meet with team members one-on-one and to discuss cultural issues. “[Being direct] sets the stage for direct reports to feel safe [and] to start the conversation about what they think is happening with the team and the organization,” she says. She also asks leaders to be vulnerable — willing to admit fault and to express a commitment to change. This approach works only when leaders are genuinely interested in repairing relationships rather than merely focused on recuperating their image, according to research from the journal “Personnel Psychology.”
Focus on sincerity and accountability. Real apologies are the first step to repairing relationships with employees and rebuilding trust on an individual level. However, the organization must also commit to change and show toxic behaviors will not be tolerated. Senior leadership should set metrics for improvement (say, a reduction in incident reports), and keep track of progress over time.
While the above strategies will help you combat cultural challenges, toxicity cannot be stalled overnight. Prepare for a long-term commitment to improving your workplace, which will decrease attrition overtime.
