The American Psychological Association’s 2024 Work in America study found that 15 percent of survey respondents labeled their workplace as toxic. This is especially true for the more vulnerable employee, with 24 percent of those living with a cognitive, emotional, learning, or mental disability reporting a toxic workplace experience. Nearly three in five thought their employer perceived their workplace to be healthier than it is.
A further study on the prevalence of workplace mistreatment found that an average of 34 percent of employees had experienced mistreatment, and 44 percent of employees had witnessed mistreatment.
A toxic environment in the workplace can extend beyond the individuals directly impacted and poison the well for everyone.
What is a toxic workplace?
A toxic workplace environment is marked by significant personal conflicts, with negative behaviors such as bullying, manipulation, and belittling that negatively impact productivity and employee well-being. Signs of a toxic workplace include a culture that fosters stress, mistrust, and unethical conduct, often leading to high turnover and decreased employee engagement.
By analyzing the language used in more than a million employee reviews on Glassdoor, MIT Sloan Management Review pinpointed five toxic culture attributes that affected how employees felt about their workplace culture.
Disrespectful
Companies with a toxic work culture show a lack of consideration for their employees, often having expectations that employees work long hours and take on excessive amounts of work. This attitude had the largest negative impact on how employees rated their companies’ corporate culture, according to the MIT Sloan Review.
Non-inclusive
A toxic workplace environment is also defined as one that fails to promote inclusion and diversity and doesn’t offer a sense of belonging to team members from minoritized groups. It can also include a sense of cronyism, with managers playing favorites, or a feeling of cliques within teams. The same MIT Sloane Management Review found that a non-inclusive environment especially impacted employees who are LGBTQ+, differently abled, and from racially minoritized groups. Racial inequity alone costs businesses a significant drop in employee satisfaction ratings.
This is supported by the 2023 Work in America Survey, conducted by the APA, which also revealed that more than 20 percent of respondents witnessed discrimination in their workplace, with 15 percent experiencing it directly. Additionally, over 25 percent of respondents reported witnessing demeaning jokes or insults targeting someone’s identity or background, and nearly 20 percent had personally been the target of such behavior.
Unethical
Engaging in unethical behavior and discrimination while failing to uphold occupational health and safety compliance is one of the key signs of a toxic workplace, according to employees. Dishonest behavior was selected as a key example of this topic in the MIT Sloane Review.
Cutthroat
Toxic workplaces are characterized by low job security and feelings of anxiety among their workforce, with threats of firing and an environment that uses fear of punishment as a motivational tactic. This can cause a culture of sabotage between individuals and a “dog-eat-dog” atmosphere.
Abusive
Bullying, microaggressions, and verbal harassment are all abusive behaviors that can be exhibited within a toxic workplace. This attribute can involve management exhibiting hostile behaviors such as shouting, belittling, and demeaning subordinates.
The impact of a toxic workplace
The U.S. Surgeon General, Dr. Vivek H. Murthy, created a Framework for Workplace Mental Health and Well-Being that underscores the negative impact of a toxic environment in the workplace. The framework cites a study by the American Psychological Association linking chronic stress to depression, heart disease, obesity, cancer, and autoimmune diseases. It can also contribute to anxiety, suicidal ideation and substance misuse, as well as having a negative impact on the mental health of the worker’s children and families.
A Mind Share Partners survey found that 76 percent of employees reported at least one symptom of a mental health condition. In total, 84 percent cited negative workplace factors like emotionally draining work, poor work-life balance, and lack of recognition that harmed their health. Toxic workplaces amplify this harm by spreading negativity among employees and managers, creating a culture of distrust and unhappiness.
Toxic cultures also hurt business. A MIT Sloan study revealed that toxic workplaces are 10.4 times more likely to cause employees to quit than low pay. Additionally, McKinsey research shows burnout rates are 2.7 times lower in healthy organizations compared to toxic ones.
Happier employees are more productive — an Oxford University study found that happy workers are 13 percent more productive. Conversely, toxic environments lead to disengagement, lower productivity, and higher turnover. Constantly replacing staff drains resources and tarnishes a company’s reputation, making it harder to attract top talent.
The business case
Workplace toxicity also costs companies money. The study cited above estimates that the cost to the economy of toxic workplaces could range from $691.70 billion to $1.97 trillion annually. Other costs can include:
- High turnover costs: Toxic environments are 10 times more likely to cause employee turnover than compensation issues, according to MIT Sloan. Replacing an employee can cost up to twice their annual salary.
- Reduced productivity: Disengaged employees in toxic workplaces are less productive, with some estimates suggesting a loss of up to 18 percent of an employee’s salary annually due to decreased effort.
- Healthcare costs: Toxicity increases stress-related health issues, potentially adding billions in healthcare costs. Employees in toxic environments face a 35-55 percent higher risk of major diseases.
- Reputation and recruitment: Toxic cultures damage company reputations, making it harder to attract talent and retain customers. This can lead to significant financial losses and legal fees.
What can you do to create a healthy workplace culture?
Firstly, to act, it’s important to be aware of whether a toxic environment in the workplace exists. Anonymous feedback channels can be part of a “wellness audit” to help you ascertain how your workplace is doing. They enable employees to safely report their experiences without fear of retaliation. This anonymity is especially critical in toxic workplaces, where employees may be afraid to speak out. To foster psychological safety and a healthy workplace culture
Increase impact awareness
Educate managers and decision-makers about the business costs associated with a toxic environment in the workplace.
Lead by example
Demonstrate professionalism and empathy to set a compassionate tone. Encourage open communication and respect among staff. Support employees in setting clear boundaries with toxic coworkers to protect their well-being
Address substance abuse
If an employee is struggling with addiction because substance abuse can both contribute to and result from a toxic work environment, document behaviors, have a constructive conversation, and offer resources for treatment.
Foster a supportive environment
Implement policies that promote work-life balance and provide resources for mental health support, such as Employee Assistance Programs (EAPs). Put in place policies that address issues of discrimination, inclusivity, ableism, and sexism. Consider bringing in outside experts to run workshops and training sessions.
Detoxifying the workplace
Forward-thinking companies prioritize creating a healthy, supportive work culture, as they know it significantly improves their overall business performance and the well-being of their workforce.
By embracing mental health, building a culture of inclusion, and upholding high standards of fairness and equality, you can create an environment that fosters a sense of belonging. This promotes the well-being and productivity of employees, and with it, the success of your business.
Create a trauma-informed workplace. Get in touch.
