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How Big Is The Problem of Toxic Workplace Culture & How Can It Impact The Financial Bottom Line?!?

Updated: Feb 7, 2023

Toxic workplaces don't just affect the experiences of the employees at work, they are also hitting employers' bottom line.

Image Credit to Elisa Ventur@unsplash By Jatinder Singh, Associate Partner & Mentor, Lighthouse Global

How Big Actually is The Problem of Toxic Workplaces?

You may have heard of the phrase “no one leaves a company - they leave a boss”. While it may be hard to verify exactly how true this phrase is, because there are usually a multitude of factors why people leave their jobs, research from the workplace shows that a great deal of people leave their jobs because of an overall toxic culture. Recent figures in 2021 from BreatheHR range from 21% in 2020 to 27% in 2021 of employees leaving their jobs because of a toxic workplace.

Furthermore a whopping 83% of those working in Human Resources experienced a toxic work culture according to an audience poll in HR Magazine at the end of 2018.

Given more and more people have reported feeling burnout since the pandemic and my own experiences as a life and career mentor talking to over a thousand people individually over the last decade about their workplace experiences and my own experiences in companies and organisations, I really don’t think these figures are vastly inaccurate. Furthermore, as Lucy Becque HR Director of Coventry Building Society says:

“Even if there’s a consistent organisational culture, people’s experiences in different teams can be really different.”

However, what is rarely given much attention to is why this problem of toxicity exists in the first place?! What leads to a toxic culture being created?

Who Causes a Toxic Workplace in a Company?

Ultimately a company or organisation is a group of individual human beings coming together. Therefore if there is a toxicity problem in an organisation, the cause of that problem must come down to the toxicity with one or more of the individual human beings in that workplace.

Yet beyond the phrases “my boss is a psychopath/sociopath” which the majority of people would struggle to define, why are so many workplaces so toxic? After all, very few companies would ever set out to employ people that bully, harass or would troll those within or outside their company. Yet toxic cultures are clearly prevalent given the number highlighted above!

The reason why so many workplaces are toxic is because companies employ those with a toxic character - but who they most likely didn’t know were toxic at the time they were offered employment. After all, how many companies can accurately assess their employees from a CV and a couple of interviews?!

What Problems Do Toxic Employees Cause a Company?

So as well as employees leaving a toxic company and the costs of replacing them, what other ways can a toxic culture affect a company's financial bottom line?

One is the deficit in character and competency that exists and could get worse if not handled. If toxic people are a catalyst to those with a character-rich centre leaving, why would not more and more character-rich people who are affected want to leave too? I.e.: a domino effect can be created. Furthermore, who would this then leave behind? Those that are able to handle toxicity and who are likely to be toxic themselves.

In addition, the competency of those leaving needs to be filled through the constant recruitment and training of new people! This is a massive time, money and effort investment. Unlike money, the time taken to replace employees driven out of the company cannot be replaced or the time taken to retrain them and replace the lost skills that went with them.

One of the biggest ironies of companies employing toxic people is that they are in effect being paid by the company to harm their colleagues or those outside the company! The reputational damage that this can cause too is something that can also have a massive impact on a company's bottom line especially as companies are legally responsible if their employees troll others.

Understanding the Character and Mindset of Your Employees

Clearly, many companies don’t understand how devastating a toxic workplace culture is to their bottom line and what to do about it. Indeed in another question posed to their audience in the poll conducted by HR Magazine cited above, only 8% of the respondents thought that the wider HR community had a very good understanding of company culture!

At Lighthouse we have had many years of experience of understanding what creates a toxic culture and how the underlying narcissistic or self-absorbed tendencies of one individual can affect others. The issues often start at home and without the right mentoring, coaching and counselling that human beings need, they can start to affect others badly. We have experiences with our own partners over the years not facing their own toxicity and affecting the team internally and have learnt hugely from these experiences over the years. We are now taking our 18 years of experiential research and using that to help other companies to learn how to handle toxic employees both within the company and when they leave.

If you would like to get in touch and learn more about Lighthouse Global can help you understand the challenges of toxic employees and our planned Global Summit for Business Against Trolls & Trolling, then please contact us here or on this site.

You can learn more about our discoveries into human potential from the last 18 years through our pioneering research on our various social media channels.

165 views9 comments


Sukh Singh
Sukh Singh
Jan 28, 2022

1/5 of employees leave because of toxic environments... that is outrageous from a business, human, moral insight. What does that mean for families? Thank you for the education on where we stand legally and ethically with workplaces. We must know what rights we have. Bullying doesn't just stop in the playground, just because someone's wearing a suit and has a title of "boss" doesn't give them any right. I feel Jordan Peterson nails this so spot on.. Jordan Peterson - How to handle toxic work environments #shorts - Business Against Trolls - YouTube


Valerie Nash
Valerie Nash
Jan 12, 2022

Thank you for writing this important post Jatinder. I have been using it for other posts and I realised I had not commented on its relevance to the posts I am sending out about the tragic statistics of children, at an increasingly younger age taking their own lives as a result of trolling and bullying. Where do the trolling and bullying children learn this malevolent behaviour? Although there may be the need to belong to a "group" and children learn from other children, the main source of this toxic and malevolent behaviour at home. The Lighthouse initiative #ParentsAgainstTrollsandTrolling is so important for education and support of trolled and bullied families, however the planned Global Summit for Business Against Trolls &…


Daniel Schmitz
Daniel Schmitz
Jan 12, 2022

Thanks Jatinder for highlighting the issue of toxic workplace cultures. I appreciate you saying that a culture is made up of individuals and bigger change can just happen if individuals change. From some of my own experiences I know how painful it is to work in toxic environments, with low energy and destructiveness. It can feel like walking on eggshells and even makes people sick. So, there is definitely a need for a Business Against Trolls & Trolling campaign and to address this issue. We spend a huge part of our lives working, so it is very important that we have the right people around us and a culture that is positive, upbuilding and progressive.


Jan 10, 2022

Thanks for sharing Jatinder. The issue of workplace bullying is an issue that is close to my heart because of my personal experiences working in two toxic organisations. The cost involved in recruiting and training replacements is very evident to me. What I valued was how you dived deeper, below the surface to look at and understand what is driving this toxic culture, what is at the root of it.


Awesome Jatinder, thanks for sharing. The level of toxicity in business is indeed a concern for employees and employers alike, from both a moral and profitability perspective. I personally have witnessed disgusting examples of the toxicity of which you speak of, from criminal damage to theft to endless list it seems. Do businesses really know their staff? Do they really know what is happening under their own roof, their brand? From my experiences and your article I would say definitely not.


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