Toxic culture drives great resignation

'It's the worst time ever to treat employees badly with the whole labour shortage'

Toxic culture drives great resignation

For all the talk of the great resignation, employers might be surprised to hear about the top reason why people are quitting.

Because compensation doesn’t top the list, according to a recent survey by FlexJobs.

The biggest impetus for someone to leave is a toxic culture (62 per cent).

That’s followed closely by a salary being too low (59 per cent) and poor management (56), along with the lack of healthy work-life balance (49 per cent) and remote work (43 per cent), being burned out (42 per cent), and not allowing flexible schedules (41 per cent).

“Toxic company culture drives people to leave their jobs more than any other single factor,” says Sara Sutton, founder and CEO of FlexJobs. “Especially with many companies now transitioning to permanent hybrid workplaces, it’s critical that leaders emphasize building healthy cultures that are inclusive of all their workers’ needs and locations, whether they’re on-site or remote.”

Toxicity is the most powerful driver of the great resignation, says Charles Sull, co-founder of CultureX, which did a major study on the topic with MIT and found similar results.

“What we think is happening is there is this awakening or employee reckoning where, en masse, employees are thinking to themselves [that] the things that were acceptable in an organizational culture a couple of years ago aren't acceptable today and [they’re] walking… out of these organizations that have high levels of toxicity to a more healthy workplace.’”

As a result, organizations should never assume – even if they’re on a top employer list – that they don’t have issues with toxicity in their workplace, he says.

“If the organization is large enough, it's probably going to have some pockets of toxicity, nevertheless. And even if the culture is very healthy as a whole, toxicity can still be the number one driver of attrition, just because although it's only affecting a small percentage of the organization, it can still have a very powerful effect on that portion of the organization.”

The head of a U.S. ad agency spoke to Canadian HR Reporter recently about how to use empathy to combat toxic culture.

Focusing too much on comp

Often, employers make the mistake of focusing too much on compensation, says Sull.

“When people leaders of organizations are thinking about how to address attrition and even engagement, to some extent, one of the first things they normally turn to is compensation… [because] it's easy to understand, it's an easy lever to pull,” he says.

“It's also one of the first things, when employees say they're leaving an organization, normally, one of the most prevalent reasons they're going to cite is compensation, even if the underlying reason is something else.”

But while compensation is a driver when it comes to attraction and retention, there are other more powerful ones, says Sull.

“Look beyond compensation as a lever for improving things like attrition and engagement, and look for the non-intuitive but often more powerful cultural levers that we see. So, things like toxicity or empowerment or psychological safety can often be as, if not much more, powerful drivers of these important outcomes.”

Often, salary is seen as a top reason for people looking for a new job, says Patrick Poulin, group president for Randstad Canada, but culture is definitely a big consideration too.

“Good luck to those companies that are not treating their employees very well. Because in the current situation, it's the worst time for them ever to treat their employees badly with the whole labour shortage... now as employers, it’s [about asking] ‘What else can we do to make sure that our employees are super happy and super engaged in a very healthy environment?’” he says.

“If an employee is not sitting in a healthy environment where they're being treated in a proper manner, for sure, it's really the perfect storm for them to find another job where it's way better.”

Bad behaviour has always been a reality at many workplaces, but with the major spike in video meetings since the beginning of the pandemic, it has now manifested itself virtually.

Micro-cultures emerge

When employees cite a toxic culture, this is normally about issues that affect them on a personal level, says Sull.

“It won't necessarily be an academic survey of the organization where they see that gender inequity is a problem and unethical behavior is a problem, but it's not necessarily affecting them personally… toxic culture has this more immediate emotional connection and a more personal connection.”

A toxic culture can also exist in “discreet micro-cultures” of an organization, he says.

“Some of the healthiest cultures in America, large organizations… will have these little micro-cultures that are actually fairly large — they can be hundreds or 1000s of employees — where there'll be very elevated levels of toxicity, even if the overall leadership and the overall structure and the overall culture of the organization is quite healthy.”

When we see this toxicity happening, sometimes it’s coming from a specific individual, says Poulin.

“That's where we need to see, ‘OK, how do I involve my leader to this? How do I involve the HR people?’ And if it's really coming from the top, that becomes a little bit tricky to find out how we deal with it.”

Too often, high-level leaders are hired for their star power, but fall from grace because of toxic behaviour.

Leadership’s role

For employers keen to know if they have an issue with toxic culture, it’s a good idea for leaders to take the time to sit down with employees, one-on-one for a “real temperature check,” says Poulin.

“Create this openness, this transparency as well, because, sometimes, some leaders, we have bad days as well. And sometimes the way that we can interact... will be a little bit more rough on some employees, and that could have a huge impact on them,” he says.

“Unfortunately, we still see some people that are quite demanding and they’re not aware… of their behaviour, the way that they behave in front of their employees.”

But senior leadership sets the tone, in terms of reinforcing what’s unacceptable conduct and treating people with respect even when there are results and projects to deliver, says Poulin.

“It’s really important that we reinforce positive communication… transparency, two-way communication, to where it's really important to get feedback, and to really listen to what your employees have to say.”

Of course, it’s often said corporate cultures starts at the top – but what if the toxic culture is coming from leadership itself? That can make for difficult conversations, says Sull.

“Put them into the language of results and the language of numbers and say, ‘You don't just want to do this to improve your culture, which [may be considered] this wishy washy phenomenon; you want to do this because this means you're going to attract the best talent, this means you're not going to lose all your people, this means you're not going to have to pay all these costs associated with employee turnover. And, ultimately, you'll see what really matters to you, which is higher profits, higher revenue, all these things that you care about.”

Toxicity is an issue that is going to affect every organization, he says.

“We would encourage, at the very least, for organizational leaders to take it seriously and put it on their radar.”

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