Toxic work culture: red flags to spot and how to root it out

Running a business comes with its own set of challenges, and one critical aspect that should be a top priority is your workplace culture. Toxic workplace culture impacts your and your employees’ well-being and overall job satisfaction.  In 2023, the American Psychology Association (APA) conducted a survey that revealed that 19% of employees found their work environment somewhat or very toxic. Understanding why it’s crucial to address toxicity in the workplace is paramount for small business owners.

What is a toxic work culture?

A toxic workplace culture involves an environment where negative behaviours, attitudes and practices are prevalent, significantly impacting employees’ well-being and productivity. In such a setting, there may be pervasive conflicts, lack of effective communication and a general disregard for morale.

Toxic workplaces often foster an atmosphere of fear, mistrust and insecurity, where workers feel reluctant to voice their opinions or concerns. Bullying, discrimination, favouritism and high levels of stress are common in these environments. 

Signs of a toxic work culture

Identifying signs of a toxic workplace is vital for your enterprise to maintain a healthy work environment. Here are key indicators that may suggest toxicity among your employees:

• Excessive negativity: Constant complaining, blaming or a pervasive attitude among employees.
• Poor communication: Lack of transparency, rumours or deliberately withholding information, creating uncertainty.
• High turnover: Frequent departures of employees without apparent reasons or consistent patterns of leaving. Companies with poor workplace culture are 10 times more likely to see employees quitting.
• Bullying or harassment: Instances of verbal abuse, bullying or harassment among employees. Increased complaints or grievances among employees, either formally or informally. 
• Decreased productivity: A noticeable decline in overall productivity and work quality.
• Absenteeism and lateness: Consistent absenteeism or frequent tardiness without valid reasons. In the United Kingdom, almost one-third of employees reported taking time off work due to a toxic environment. 
• Increased conflict: Rise in interpersonal conflicts, whether mild disagreements or more serious confrontations.
• Lack of initiative: Employees showing a lack of initiative or engagement in their roles.
• Elevated stress levels: Observing signs of stress, anxiety or burnout among team members.
• Cliques and division: Formation of cliques or divisions within the team, hindering effective collaboration.

Recognising these signs allows you to proactively address and rectify issues before they escalate. Regularly assessing the workplace dynamics and fostering open communication can help create a positive and productive business environment. 

5 types of toxic work culture

Toxic offices can take many forms. Here are a few to look out for.

1. Blame culture

In blame culture, mistakes aren’t viewed as opportunities for learning and improvement but are instead met with punishment or scapegoating. This creates an atmosphere where employees are afraid to admit errors, hindering innovation and problem-solving.

2. Hustle culture

Hustle culture is a recent workplace phenomenon characterised by glorifying constant busyness, long working hours and the relentless pursuit of success. Employees may feel compelled to prioritise work over personal well-being, leading to burnout and diminished work-life balance.

Continuous productivity and achievement can create a high-pressure atmosphere, potentially sacrificing creativity and happiness in the process. While a strong work ethic is commendable, hustle culture can be detrimental when it encourages unsustainable practices, and neglects the importance of rest and self-care.

3. Authoritarian culture

In authoritarian culture, leadership tends to be overly controlling and hierarchical, and often disregards employee input. Decisions happen unilaterally with little room for collaboration or open dialogue. These factors can lead to a lack of autonomy for workers and a stifling of innovation.

4. Clique-based culture

Clique-based culture refers to a work environment where exclusive groups or cliques form, creating favouritism and exclusion. In these settings, specific individuals or teams may receive preferential treatment, while others feel left out or marginalised.

This type of culture can impede collaboration, hinder diversity and inclusion efforts, and create a divisive workplace where interpersonal relationships become key determinants of success. Cliques can lead to reduced morale and decreased team cohesion.

5. Fear-based culture

A fear-based workplace culture thrives on intimidation, coercion and fear among the team. Leaders — or even team members — may rely on threats and harsh criticism to control others. The fear of reprisal can stifle open communication, creativity and collaboration, as employees become more focused on avoiding mistakes rather than contributing ideas.

The impact of toxic work culture on employees and businesses

Before the detrimental effects of a toxic workplace culture take a toll on your small business, it’s crucial to recognize the warning signs. Identifying these issues early empowers you as a business owner to proactively address concerns and cultivate a healthier work environment. 

• Negative impact on employee wellbeing

Recognising that toxic workplace culture directly affects your employees’ wellbeing – emotionally, mentally and even physically – is key. Unhealthy work environments can lead to stress, anxiety and a decline in overall job satisfaction. In a separate survey conducted by the APA, 40% of workers reported feeling stressed the previous day and more than one-fifth reported feeling angry or sad due to their workplace. Employees who feel valued and supported are more likely to contribute positively to the success of your business. 

• Productivity and performance

Workplace toxicity can directly impact your business’s productivity and performance, especially in a small business setting. When team members are disengaged or facing constant negativity, it hampers their ability to focus on tasks and deliver optimal results. Addressing toxic elements can contribute to a more efficient and effective work environment. 

• Team dynamics and collaboration

In a small business, the dynamics among team members play a vital role in the success of the enterprise. Toxicity can strain relationships, leading to conflicts that hinder collaboration. Nurturing a positive workplace culture fosters teamwork, enhancing the ability of employees to work together harmoniously toward shared goals.

• Retention

Your business likely relies on a close-knit team. A negative workplace culture can result in a high turnover rate, disrupting the stability of your company. Between July and November 2022, more than four million Americans resigned each month, and 57% of these resignations were due to feeling disrespected at work. Addressing these issues helps retain valuable employees and contribute to a positive reputation, making it easier to attract top talent. 

• The ripple effect on business growth

Recognizing that a toxic workplace culture can have a ripple effect on the growth of small businesses is essential. Unresolved issues can impede innovation, hinder creativity and limit the potential for expansion. Investing in a healthy workplace is an investment in the long-term success and sustainability of the business. 

Examples of toxic work culture in the real world

The prevalence of toxic workplace cultures remains a stark reality in the professional landscape, impacting employee well-being and organisational success. Here are some real-world examples of toxic work cultures that led to the downfall of major businesses.

BrewDog

BrewDog — a craft brewery — experienced allegations of fostering a toxic workplace culture. In 2021, an open letter from former staff criticised the enterprise for a culture of fear, lack of diversity and inclusion, and a disregard for mental health. It highlighted issues such as bullying, sexism and a general atmosphere that hindered employee well-being.

The company’s response included an acknowledgement of the need for improvement and a commitment to positive change. However, these allegations tarnished its image, especially since BrewDog positioned itself as a progressive brand within the craft beer industry. This scandal led to negative media coverage and a perception that the business had failed to live up to its proclaimed values.

WeWork

WeWork faced intense scrutiny for its workplace culture under the leadership of co-founder and former CEO Adam Neumann. Reports suggested a culture of excess with Neumann’s extravagant behaviour, including the use of company funds for personal expenses. Additionally, there were concerns about a lack of corporate governance and transparency. The company’s rapid expansion — fueled by a massive valuation — came under question as financial irregularities and the lack of a sustainable business model became apparent.

Neumann’s management style was described as erratic and autocratic, contributing to a chaotic work environment. WeWork underwent significant changes, including Neumann stepping down, layoffs and restructuring the company to address these issues.

The embarrassing revelations about WeWork’s financial status and leadership style contributed to the failure of its initial public offering (IPO) in 2019. The IPO — once highly anticipated — had to be withdrawn due to growing scepticism from investors and stakeholders about viability and transparency.

Business risks of a toxic workplace environment

A toxic workplace culture poses a myriad of risks that can have detrimental effects on an organisation’s short-term and long-term success. Some key risks include the following.

Legal risks

A toxic workplace culture can expose a company to various legal risks, including lawsuits related to harassment, discrimination and hostile work environments. Legal battles can result in financial losses and distraction from core business goals.

Reputational harm

A toxic workplace can significantly damage a, enterprise’s reputation, both internally and externally. Negative perceptions spread through social media, news outlets and employee reviews, making it challenging to attract customers, clients, and investors who value ethical and positive corporate environments.

Reduced staff morale and productivity

Low morale among employees is a direct consequence of a harmful workplace. Reduced motivation and engagement can lead to decreased productivity, increased absenteeism, and a lack of commitment to organisational goals. This hampers overall business performance.

High turnover rates

Toxic workplace cultures contribute to elevated turnover rates as individuals seek healthier work environments. The costs associated with recruiting, onboarding and training new staff can be substantial, impacting the company’s bottom line and operational efficiency.

Poor Glassdoor reviews

Employee dissatisfaction often finds its way onto platforms like Glassdoor, where current and former employees share their experiences. A high number of negative reviews can be detrimental to the brand, dissuading potential candidates from applying, and potentially deterring customers or clients from engaging with businesses.

Failure to attract and retain talent

Companies with poor reputations struggle to attract and retain top talent. In a competitive job market, skilled professionals prioritise positive work environments, growth opportunities and supportive leadership. Failing to address toxicity makes it difficult for the organisation to build and maintain a talented and motivated workforce.

How to identify and address toxic work culture

Identifying and addressing a toxic workplace culture requires a thoughtful and systematic approach. Here’s how to get started.

1. Assess your current culture

Start with workers’ feedback. Conduct anonymous surveys or interviews to gather honest feedback from staff. Ask questions about their experiences, perceptions and feelings regarding the culture.

Analyse turnover rates, particularly the reasons behind those resignations. Consistent patterns related to dissatisfaction or toxic behaviours can signal underlying issues.

It’s wise to review online platforms like Glassdoor to understand employees’ public sentiments. Pay attention to recurring themes or specific incidents mentioned in reviews.

2. Identify the root causes of toxic behaviour

Begin with leadership, evaluating their practices and behaviours. Assess whether managers model positive behaviour, communicate effectively and create a supportive environment for their team members.

Additionally, you should review organisational policies and procedures to identify any that may contribute to a toxic culture. This review includes how leaders handle evaluating performance, conflicts and employee concerns.

3. Develop a plan to address toxic behaviour

It’s important to define and communicate the organisation’s values clearly, emphasising respect and inclusivity. You must set expectations for behaviour at all levels. Provide leadership training to address any shortcomings identified, and emphasise the importance of leading by example and creating a positive atmosphere.

After reviewing policies and procedures, modify any that may inadvertently contribute to toxicity. Ensure these policies are fair and transparent. Additionally, it’s crucial to establish confidential reporting mechanisms for employees to raise concerns without fear of retaliation. There should be clear procedures for investigating and addressing reported issues.

4. Implement your plan and monitor the results

When changes and initiatives occur, you must communicate them to the entire company. Clearly articulate the reasons behind the changes and emphasise the commitment to creating a healthier workplace. Roll out training programmes to educate employees at all levels about the importance of positivity at work, acceptable behaviour and conflict-resolution skills.

Once you’ve implemented the necessary changes, conduct regular check-ins with workers to assess their experiences and gather ongoing feedback. You can do this through surveys or one-on-one conversations. Establish key performace indicators like employee satisfaction scores, retention rates and the number of reported incidents. Monitor these metrics to gauge the effectiveness of the culture change initiatives.

Being flexible as feedback and results roll in is crucial. Continuous improvement is essential in creating a sustainable positive workplace culture.

Common challenges of addressing toxic work culture

Addressing negative workplace culture is a complex and challenging endeavour that requires sustained effort. Here are some challenges you may come across.

Resistance to change

Employees and even some leaders may resist changes to established norms and practices. Overcoming resistance requires effective communication and demonstrating the benefits of a positive work culture.

Identifying underlying issues

Uncovering the root causes of toxic behaviour can be challenging. Some issues may be deeply ingrained in the brand’s history or hidden within cultural norms. Identifying these underlying issues requires thorough investigation and introspection.

Fear of retaliation

Employees may fear retaliation for speaking out about the company culture. Creating a safe and confidential reporting system is crucial to encourage people to come forward without the fear of negative consequences.

Staff morale suffering

Poor staff morale is often exacerbated by a fear that stifles open communication. Staff may find themselves grappling with a sense of disillusionment or frustration, and a diminishing passion for their work. Despite experiencing adverse effects on their well-being and job satisfaction, individuals may be unwilling to speak out due to concerns about potential reprisals, retaliation or the fear of being marginalised within the organisation.

Managers can address these issues by promoting open communication, implementing leadership training and development programmes, and implementing anti-retaliation measures. Encourage open communication where employees feel safe expressing their concerns without fear of losing their jobs. There should be channels for anonymous feedback, and you must actively seek input through regular surveys or meetings.

Invest in management training programmes that emphasise the importance of positive leadership behaviours, effective communication and conflict resolution. Supervisors should have the skills to foster a supportive and inclusive atmosphere.

Finally, develop and communicate anti-retaliation policies to protect employees who report toxic behaviour. Ensure the individuals who come forward with concerns are safe from negative consequences and that you don’t tolerate retaliation.

Companies with outstanding workplace culture

Certain companies stand out for their exceptional commitment to emphasising positive, inclusive and innovative workplaces. These organisations go beyond the traditional norms, prioritizing employee wellbeing and development. Here are some companies with excellent workplace culture:

Google

Google is renowned for its exceptional workplace culture, setting a high standard in the tech industry. Google’s success lies in a commitment to creating a positive and inclusive environment. The company’s unique perks, like on-site fitness centres, gourmet cafeterias and flexible work schedules, create a holistic work-life balance, leaving 85% of employees satisfied with their jobs. Google encourages open and collaborative office spaces that promote communication and idea sharing. 

Intuitive

Intuitive — a minimally invasive care company — has similar stories of employee satisfaction. Managers encourage continuous learning and are supportive of their employees and support their desires to advance their careers. These factors contribute to a vibrant and dynamic culture where employees feel empowered, valued and motivated to bring their best selves to work each day. 

Airbnb

Airbnb — one of the biggest names in the travel industry — focuses on community and belonging. At the core of Airbnb’s success is a result of promoting a work environment that mirrors the diversity and inclusivity of the global community. The company places a premium on creativity, encouraging employees to think outside the box through unique office designs, collaborative spaces and the ability to work and live anywhere. 

With a strong focus on employee wellbeing, Airbnb offers benefits like flexible work arrangements and wellness programs, fostering a culture where employees feel supported and valued. This culture is what led to Airbnb being rated the best place to work in 2016, dethroning Google. 

Conclusion: creating a healthy workplace culture

Recognising red flags and addressing toxic workplace culture is non-negotiable for the long-term success of your business. By promoting a healthier workplace, you contribute to a more productive, innovative, welcoming and fulfilling work environment for everyone.

Mia Barnes - Founder and Editor-In-Chief of Body+Mind Magazine

Mia Barnes is a freelance writer and researcher with over 3 years of experience in the field. With a specialization in workplace wellness, financial well-being, human factors, and ergonomics, her articles aim to educate and empower readers, providing them with practical tips and insights to enhance their overall well-being in various aspects of their lives. Mia is also the Founder and Editor-in-Chief of the online publication, Body+Mind magazine.

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