Toxic culture top reason for turnover, according to research

'We have to get serious about talent shortage because it's not going to change anytime soon'

Toxic culture top reason for turnover, according to research

For companies who are seeing an inordinate number of employees exit the organization, the biggest reason might be a toxic culture.

That’s according to research by CultureX, an employee insight firm, looking at 1.3 million Glassdoor reviews and analyzing what people were saying about their experiences and why they left.

It was originally developed about six years ago from another study at the MIT Sloan School of Management and it included information from more than 500 companies in the U.S.

“We didn’t set out to do a research study on toxic culture, specifically the focus was more on: what are the drivers of attrition? What are the topics that employees speak about in their Glassdoor reviews that are going to be more or less powerful drivers of this outcome?” says Charles Sull, cofounder of CultureX in Cambridge, Mass.

After analyzing 180 topics on the company-review website, “the topic that rose right to the surface, which was the most powerful driver that we found by far, was a toxic culture,” says Sull.

“If employees are saying the culture is toxic, whenever that happens, it is going to have a really big impact on attrition and our research indicates that effect size is roughly a little bit over 10 times the effect size that compensation has on attrition.”

Elements of a toxic culture

So, what exactly is toxic culture? It’s largely based around disrespectful behaviour, he says.

“Previous research has found that respect is actually the number one most powerful driver of an overall Glassdoor rating, and it turns out when employees feel disrespected, that’s a real tell-tale sign that the culture is toxic.”

As well, when employees are excluded based on their identity, it’s another big driver of dissatisfaction, according to Sull.

“We looked at different kinds of inequity, ranging from racial inequity to gender inequity to LGBTQ equity, disabled equity, age equity, and so forth, and we found that all of those are quite powerful drivers of what makes the toxic culture toxic.”

The research also identified unethical, cut-throat and abusive behaviour as big indicators that a workplace culture is toxic, he says.

“It’s pretty simple: would anyone really want to work in an environment where they feel disrespected? Where they feel like they’re discriminated for their race or their gender? Where there’s unethical behaviour going on around them? Where it’s a cut-throat environment, it’s not healthy collaboration; everyone’s out to get each other or just where the managers are downright abusive?”

“This isn’t a work environment that employees are going to find very fulfilling even if they are being paid a relatively high amount to stay there; this is going to be something that’s going to drive their exit, especially in a relatively liquid labour market.”

For working parents, there are a number of ways employers can make them feel most supported.

What can employers do?

To help combat employees leaving, there are some steps employers can take, says Sull.

“The first is lateral career opportunities, which we find is more than two times as important relative to compensation as the driver of retention. This is a non-intuitive one, but we have found that it’s not necessarily [about] getting people promotions, but about rearranging them in the organization, giving them new opportunities. This can be a powerful way to give employees a new lease on life and enthusiasm for the organization with a new set of challenges.”

As well, employers should also plan more social events, he says.

“Get everyone in a room, maybe get some drinks, get some food; our research indicates that is actually a more powerful driver of retention than compensation if you get that right.”

The number of people who are looking for new opportunities continues to go up, according to a December survey by Robert Half.

For now, the ubiquity of remote working might just have caused some of the toxic behaviour to go in “hibernation” at some workplaces, he says.

“Our theory here is that if you have an abusive or a belligerent manager, and if you’re in the office, that’s going to be on your mind because the manager is right in front of you all day — you can’t escape him or her. But if you go to a remote work or a hybrid arrangement, then this might just not be quite as top of mind. We do see a little bit of evidence of remote work making the more abrasive aspects of toxic culture less salient.”

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