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

Updated: Feb 7

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.

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