Handling a Toxic Corporate Culture: An Employer’s Guide

Written by Nicola Wylie
Last updated June 26, 2022

The Great Resignation of 2022 saw 20% of UK workers prepare to leave their jobs in the next 12 months. Many changing careers completely. Research has indicated that a toxic corporate culture is one of the main driving forces behind this mass exodus. In fact, according to an MIT Sloan study, a toxic work environment is the biggest reason why workers leave their jobs.  

Indeed, there seems to be a growing dissatisfaction amongst employees when it comes to the culture at work. With Google searches for “toxic work environment quiz” increasing by 700% in April alone, the link between workplace culture and turnover is clear. As an employer, it can be tough to hear that the working culture in your organization needs improvement. But, the good news is that it is possible to turn it around. With some small but important changes, toxic corporate cultures can be repaired. 

In this article, we break down the signs of a toxic corporate culture and the impact on your business. You’ll learn what causes a toxic working environment and what employers can do to fix it. 

What is Toxic Corporate Culture?

First up, let’s answer an important question; What is a toxic work culture? In a nutshell, a toxic corporate culture is a workplace environment where employees don’t feel safe, valued, or heard by their employer.

While organisations can be unhealthy in different ways, most toxic workplaces are categorized by workplace bullying, in-fighting, finger-pointing, and high stress. In general, businesses that value profit over employees tend to struggle with a negative corporate culture.  

Common Causes of a Toxic Work Culture

So what causes workplaces to turn toxic? In most cases, the answer is a combination of factors. 

We’ve broken down the most common reasons why work cultures become negative.

  • Poor compensation
  • Workplace bullying
  • Unethical work practices
  • Not recognising employees’ achievements
  • Fear-based leadership
  • A lack of transparency (leading to rumours and gossiping) 
  • Favouritism, particularly when it comes to wages and internal promotions
  • Unhealthy competition, such as pitting workers against each other
  • Dishonesty
  • Little work-life balance thanks to excessive workloads or not respecting employees’ personal time
  • An environment where employees don’t feel like they can speak up

Signs of a Toxic Work Culture Employers Should Look Out For

As an employer, it’s your responsibility to look out for the symptoms of a toxic workplace. What’s more, knowing the warning signs will allow you to spot issues early. As a result, you can address the problem before it gets any worse.

Here are some of the common indicators that employers should watch out for.

High Staff Turnover

Perhaps one of the most telling signs that something is off in your organisation is an unusually high staff turnover. While it’s common for employees to move on or even switch careers, it can be a symptom of a bigger issue. That’s why it’s important that employers don’t ignore it.

Recap: A sudden upturn in staff turnover is likely a result of a wider cultural issue that needs to be addressed.

Lack of Work-Life Balance

A common indication that your business has a toxic corporate culture is poor work-life balance. This could be a result of excessive workloads or a lack of respect for employees’ personal time. Not only is this detrimental to morale, but it’s also bad for the bottom line. Companies with negative work environments actually report lower levels of productivity and increased employee burnout. This leads to an increase in absenteeism, disengaged employees, and an unhappy workforce. By contrast, studies show positive work environments are more productive.

Summing up: Overworked, overstressed employees are less productive and engaged. Employers must review workloads regularly to avoid burning out employees.

Low Morale

You know the saying “laughter is contagious”? Well, the same can be said for unhappiness. Especially in the workplace. Evidence suggests that when even a handful of employees begin to feel unhappy at work, this rubs off on the rest of the team. In fact, 93% of workers notice they are less productive when working with colleagues with a poor attitude. So, employers must work hard to identify unhappy employees and address the problem before it spreads.

Signs of low morale could include employees participating less in meetings and company events. You may also notice more bickering, a decrease in performance, and an increase in sick days. 

Bottom line: If you notice a sudden dip in morale, it’s time to take action.

Little Internal Mobility

Toxic corporate cultures are often characterised by office politics and favouritism. As a result, there is often little internal mobility. Employees recognise that there are clear favourites and may not even bother to apply for internal positions. This creates a tense work culture and limits talented employees from progressing in their careers. Thus, negatively impacting both the organisation and the worker.

Summary: Employers should establish transparent policies and procedures around internal mobility to reduce favouritism and create equal progression opportunities.

Hostility Between Employees

Toxic work environments typically pit employees against each other, establishing a blame culture. Consequently, employees begin to point fingers at each other until they are afraid to make a mistake. This results in a highly stressful working environment, a lot of job insecurity, and a lack of innovation. Put simply, when there is no room for mistakes, there is no room for failing forward. Workers stop putting forward new ideas, taking risks, or stepping forward for new challenges because the fear of failure is too high.

Additionally, unhealthy competition in the workplace leads to in-fighting and hostile corporate cultures. 

Wrap up: A fear of failure is detrimental not only to employees’ mental health but also to business innovation. Employers should promote a growth mindset and encourage employees to take risks even if they fail.

How to Fix a Toxic Corporate Culture

It may not be easy, but there are ways to turn a negative atmosphere around. To help you, we’ve put together a few tips on how to change a toxic work culture.

Better Communication

A lack of transparent communication is one of the main causes of misunderstandings and office rumours. In your bid to improve the corporate culture in your organisation, start with establishing a clear communication strategy. 

The first step is choosing communication channels. Communication tools, such as Workplace or Slack, can help to foster better communication. Having said that, important information should be communicated in a more formal channel. For instance, email, employee meetings, handbooks, or training

When it comes to what you should be communicating to your employees, the reality is the more the better. Transparency builds trust. 

To narrow it down, here are some key areas where clear communication is vital.

  • Corporate values
  • Goals on an individual, team, and business level
  • Company policies, procedures and workflows
  • Business changes that impact their job
  • How to do their jobs effectively
  • Personal development opportunities
  • Responses to worries (or rumours) around layoffs or redundancies 

Have Clear Values 

Company values act as the North Star that guides your company culture. For example, if one of your company’s core values is integrity, then your culture should reflect this. As such, your company should value how things get done as much as what gets done. By establishing clear values and setting an example from the top down, you set the cultural tone of your business. This encourages employees to follow suit.

Set Goals

Goals are a huge motivator for employees. They show them why they are doing what they are doing and how that positively impacts the business. Besides, they enable workers to gauge their progress and stay engaged. When it comes to setting employee goals, they should always be tied to wider business goals. According to Harvard Business Review: “Employees who don’t understand the roles they play in company success are more likely to become disengaged.”

Run Regular Pulse Checks

If you think the culture in your organisation has become toxic, don’t wait in the hopes it will improve on its own. Instead, tackle it head-on.

Start by listing the symptoms you’re seeing, such as employee burnout, low engagement, and higher absenteeism. Then, run regular anonymous pulse-check surveys to find out why. Pulse check surveys will keep you in the loop about how employees are really feeling. It also gives staff a safe space to express their concerns. Additionally, ask managers to share employee feedback concerning company culture and ways to improve.

Promote Work-Life Balance

Toxic corporate cultures are usually highly stressful environments. Over time, this stress can manifest in different ways, leading to a toxic culture at work. By promoting a better work-life balance, employees have a chance to de-stress and switch off. 

This can be achieved through remote working options and flexible working hours. Some organisations even suggest employees update their email signatures to reflect when they are not available to respond to emails. Furthermore, encouraging employees to use their paid holidays can help. Finally, offering flexible working options can improve employee well-being. This, in turn, boosts corporate culture. 

A shift in mindset starts from the top. Therefore, to effectively promote a culture that values work-life balance, managers should lead by example. Encourage all employees to respect their colleagues’ personal time by ensuring that you do. That means scheduling meetings during core working hours and not sending emails outside of office hours.

Retain More Employees 

Toxic work cultures are a leading cause of high employee turnover. Causing some workers to change careers completely. High staff turnover is extremely costly to a business. Not only does it waste valuable time and resources, but it dents the company culture. As more employees leave, the culture gets worse. Seasoned employees usually take on the brunt of the work when others leave, adding to their stress. Besides, when workers see their colleagues leaving, they tend to follow suit. 

As a result, dealing with high turnover and retaining career changers is key to fixing a toxic corporate culture. Fortunately, there are measures you can take to reduce turnover and even retain career changers. Firstly, you need to identify why employees are leaving. This is where exit interviews come in. What issues are being raised in your company’s exit issues? Is there a common problem that’s coming up such as pay, benefits, or management? Pinpoint the common pain points and address them. 

While you may not be able to fix every issue mentioned, you can make improvements. For example, better management training, updated benefits schemes, and transparent company policies. 

Invest in Employees’ Development

A lack of professional development opportunities can exacerbate a toxic work culture. Not only do employees become disengaged, but they feel like their employer isn’t interested in their development. 

The 2022 LinkedIn Global Talent Trends Report revealed that employees cite professional development as the best way to improve company culture. Therefore, offering continuous learning programs and career paths can help to engage employees and boost morale.

Create a Safe Space 

We’re not just talking about health and safety (although that’s also an important issue). Toxic corporate cultures tend to be unsafe spaces. This means that employees don’t trust their employer and aren’t comfortable speaking up. In fact, according to Google’s Project Aristotle, a high level of psychological safety has the largest impact on team effectiveness. 

Unsure if your company culture feels safe for employees? Ask your employees the following questions.

  • Do you feel safe from bullying and mobbing?
  • Do you feel safe voicing your ideas, concerns, and feedback?
  • Do you feel safe failing and overperforming?
  • Do you feel safe being your authentic self? 

The best way to get honest answers to these questions is to establish a feedback culture. This can be done through one-to-one meetings, 360 feedback loops, and team-building events. Furthermore, an effective HR team will be an integral cog in building a safe culture.

Overhaul Your Hiring Process

Switching up your corporate culture usually involves switching up your hiring process. Firstly, recruiters shouldn’t just hire based on skillset. They should also consider soft skills. This can be done by asking behavioural-based interview questions that show candidates’ attitudes. In doing so, recruiters gain insight into how that candidate handles themselves in the workplace. 

Secondly, providing talent acquisition specialists with unconscious bias training can promote more diverse hiring. A diverse workplace is not only more productive, but it’s also more inclusive. In turn, this creates a safer space for employees to speak up and fairer opportunities for advancement.

Finally, hiring career changers is another way to build a more diverse workforce based on behaviours rather than skills. Career changers have a wide range of transferable skills, diverse opinions, and a passion to start a new career. What’s more, there are funding options available for employers who recruit career change candidates.

Final Thoughts

The impact of a toxic corporate culture is huge not just on employees, but on the business too. High staff turnover, low productivity, and a damaged brand reputation are just some of the consequences. As such, employers need to take action early. While dealing with a toxic corporate culture takes time, it is possible to turn it around. 

Refreshing a career is packed full of resources for employers to help you build a positive, inclusive work environment. From remote working advice to job advert inclusivity screening, our goal is to empower your business to build a great work culture.

Be sure to also check out what employer services we can provide your company, including advertising your roles on our unique career change jobs board.

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Last Updated: Tuesday July 19 2022
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