Culture will impact everything from the extent to which people feel included and valued, through to the level of innovation on display. If it’s funnelled into a powerful employer brand, it can also act as a powerful talent magnet – sought after by jobseekers and relished by existing employees.
But what happens if that culture is broken or toxic? You’ve likely heard that people don’t leave jobs but instead leave managers. A twist on that is that people don’t quit jobs but instead leave toxic workplaces. That was the number one factor that drove people to resign during the ‘Great Resignation’ of 2022.
According to US-based research cited in MIT Sloan Management Review, which analysed the impact of more than 170 culture-related elements on employee attrition, corporate culture is a much more reliable predictor of industry-adjusted attrition than how employees assess their compensation.
Each bar on the graph below indicates the level of importance of each element for attrition relative to employee compensation. A toxic culture is 10.4 times more powerful than compensation in predicting a company’s attrition rate compared with its industry.
The MIT research revealed that leading elements contributing to toxic cultures include failure to promote diversity, equity, and inclusion; workers feeling disrespected; and unethical behaviour.
In toxic cultures, information is not shared, there’s excessive red tape, policies are ambiguous or non-existent, people do not feel emotionally and psychologically safe, and ultimately, the business suffers. Indeed, when people hear the words ‘toxic culture’, the automatic response might be to assume it’s something like verbal or sexual harassment, or constant conflict. It can of course mean that, but there can be more subtle signs that HR should look out for:
Worker feedback indicates that something is ‘off’ – the workplace is making them feel uncomfortable or they feel like they cannot ask for the things they need, or that they’re not supported. They may feel excluded or isolated from others – this is especially prevalent in deskless workplaces, where team members may be transient and geographically dispersed.
Favouritism and manager bias – for example, workers may feel ‘stuck’ and unable to get promotions or make lateral moves, no matter how hard they work.
Excessive micro-management. Lack of trust goes hand in hand with toxicity. Workers may feel like every move is being watched and judged and they won’t be trusted to do the simplest of tasks. Even worse, mistakes are called out relentlessly and no effort is made to assist or improve employee performance.
An expectation that workers will to be on call, no matter the hour and on non-rostered days. Excessive overtime or being asked to work without pay, as well as a lack of downtime for workers are sure signs that something is off-kilter.
Poor, misleading or just plain wrong communication. This can lead to misunderstandings at best and create dangerous workplaces at worst. Communication might also be strictly one-way, from the top-down, with little or no scope for employees to voice their opinions or concerns.
If you can’t measure it you can’t manage it, and that certainly applies to workplace culture. If you’re not keeping tabs on what your culture is, how it’s changing, and whether it’s still fit for purpose, you’ll run into trouble. Prevention is always better than a cure. These metrics and analytics can help to identify small issues before they escalate, or pinpoint individuals, departments or locations showing toxic traits. You might track:
People usually won’t stick around if they are feeling undervalued, abused, overlooked or treated poorly. That’s why employee turnover data is so valuable. High turnover can indicate that something is ‘off’. ‘Employee turnover’ – a term often used interchangeably with ‘attrition’ – is defined as the number of employees who departed the organisation over a period of time (it’s often calculated on a monthly and/or annual basis) divided by the average number of employees during this period. This can be determined by a simple equation:
Slicing and dicing the data is also important to uncover if turnover is happening at certain levels, or for specific job types, departments or geographic areas. Analysis can be conducted based on any number of chosen attributes in a dataset. Examples include:
Countless other demographics
Data gathered via employee engagement surveys and shorter, more timely pulse surveys can help leaders uncover if there are underlying issues. Anonymity is essential here, especially if there’s a lack of trust or fear of retribution. As deskless workers may not have access to laptops and PCs, being able to access and submit surveys via mobile devices is essential.
Other valuable insights can be gleaned from informal one-on-one chats with employees and more formal performance conversations, as well as exit and stay interviews – read more on stay interviews in our blog. If your employee net promoter score (eNPS) – i.e. whether or not employees are willing to recommend you as an employer – takes a dip, this can also be a warning sign.
Excessive or higher than usual levels of absenteeism can be a tell-tale sign that something untoward might be happening in the workplace. It’s been shown that toxic workplaces can impact employee health and wellbeing. The US Surgeon General even produced a report on this very topic. The report stated:
“Workers manage daily stress that affects their health and organisational performance. These stressors arise from heavy workloads, long commutes, unpredictable schedules, limited autonomy, long work hours, multiple jobs, low wages, and a variety of other work-related challenges on top of responsibilities outside of the workplace.”
Keeping track of time & attendance, including encouraging regular breaks and time away from work, as well as careful rostering & scheduling can improve work-life balance for employees and improve their overall health and wellbeing.
It’s important to understand that workplace cultures are ever-changing and malleable. Different external and internal forces will shape it, so it’s not a matter of ‘set and forget’. The good news is that cultures can be ‘detoxed’. Here are three ways to start the process of turning a toxic culture around.
It’s tempting to play the blame game when it comes to culture. You might hear: “It’s not our problem – the issue stems from our line managers”. Or “it stems from our poor hiring decisions”. Or “it’s isolated to a particular team or location, so they are the ones responsible”. But a fish rots from the head down; employees don’t create the mess, and middle managers can’t fix it – although they do play an important role in ‘culture building’. More than anyone, executive leaders must hold themselves fully accountable for the current state of the culture and the experience of employees.
Leaders need to be transparent in outlining how the current culture negatively impacts customers, employees and the overall business. They should also aim to describe a future state and how people acting in new ways – perhaps aligned to refreshed values that are constantly reinforced – will benefit everyone.
Rather than making big promises that may or may not be achievable, it’s time to commit to the basics of credibility, respect, and fairness. Make a (re-)commitment to your organisational values or mission, with the full understanding that the actions and behaviours of leaders will be under the microscope until trust is rebuilt. Employees will be waiting for signals that their leaders are committed to changing.
The success of any transformation depends on communication, and when it comes to turning around a toxic culture, transparent communication must be a top priority. Transparency builds trust. This is magnified when you’re upfront about where progress is being made and – especially – where you are falling short.
Sharing how decisions are being made is one way to show a commitment to a new way of doing things, especially if those decisions have incorporated the ‘voice of employees’. When direct managers and especially senior executives consistently articulate how and why decisions have been made, people feel empowered to play a role in reshaping the culture. For more on listening to the voice of deskless employees, read our blog.
A strong workplace culture can take years to build but only a few, scattered incidents to pull it apart. The key is to ensure those incidents don’t spread like a virus. Being proactive, keeping tabs on how your culture if faring in volatile times, and listening to the voice of your employees can all help ensure your culture remains healthy.
For further tips on building a strong culture and improving deskless worker retention, download our eBook.
Humanforce is a leading provider of shift-based workforce management solutions that simplify onboarding, scheduling, time and attendance, pay, employee engagement, and communication. Customers in more than 23 countries use Humanforce to optimise costs, realise compliance confidence, empower their team, and drive growth. Humanforce was founded in Sydney in 2002, and today has offices across Australia, New Zealand, and the UK.