A company’s work environment has the potential to impact employees at the individual level, and the company at large. When it’s toxic, the effect can be costly. Employee attrition costs American businesses one trillion dollars each year. 

But how do you know if your workplace is toxic? There are clear signs and they are easy to see once you start looking. 

At Praisidio, we’ve helped hundreds of companies identify and solve culture risks within their organization. In this article, we draw back the curtain and share our best strategies for fixing a toxic workplace. We also share the most important indicators for diagnosing a toxic workplace culture.

If you’d like help identifying and solving culture risks within your org, book a demo today. 

What is a toxic work environment?

To understand if your work environment is toxic, it’s necessary to know what qualifies as such. A toxic work environment possesses certain characteristics that may cause employees to feel any combination of anxious, depressed, stressed, trapped, and burnt out, ultimately encouraging them to seek jobs elsewhere. 

When company culture is toxic, employees may feel psychologically unsafe as a result of negative behaviors and practices intrinsic to the organization in question. It often goes beyond the behavior of one individual (as in the case of a less-than-effective manager), and is, instead, systemic. 

A toxic workplace is a system where the whole is detrimental to the individuals and teams working within it.

Signs of a toxic work culture

As with any problem, identification is the first step towards developing concrete solutions—and a toxic work culture is no exception. Praisidio has identified five core metrics to assess employee satisfaction and determine the likelihood that a toxic work environment is at play. By looking out for the following, you can get a well-informed sense of employee satisfaction at your company and identify the most crucial areas within which to focus your retention activities.

Overloaded with work

Employee burnout is a long-lasting sense of mental and emotional exhaustion that, if severe enough, can also cause physical exhaustion. Its chronic nature has a big impact on employee attrition, causing employees to feel pessimistic and hopeless. 

A burnt-out employee isn’t likely to stay at a job that makes them feel this way. Employee burnout can be challenging to assess because employees often won’t admit to it, but there are quantifiable indicators of employee burnout that can help identify who may be experiencing burnout before it’s too late.

Increase in out-of-office days

One of these is increasing out-of-office days: if an employee’s ratio of in-office days vs. out-of-office days starts to deviate from what’s average for them or their team, pay attention. Isolation is a symptom of burnout, and employees who begin isolating themselves after not having done so previously can indicate a problem. 

Increase in work absences

A greater number of work absences can also suggest burnout. When an employee feels burnt out, they’ll often take more sick days than usual, show up late more often, or just miss work altogether. Of course, sick days happen normally and employees who aren’t feeling burnt out can still be late on occasion; it’s a relative increase in sick days, latenesses, or absences that can signify a shift in employee satisfaction.  

Too many meetings

Unmanageable weekly meeting loads can also contribute to employee burnout. Meetings are often necessary for planning and collaborative problem-solving, but they typically aren’t for getting work done. As such, too many meetings—especially poorly scheduled ones—eat up work time. A lack of  “maker time”—long, uninterrupted blocks of time reserved for cognitively demanding jobs—is detrimental to productivity. When employees feel like they have a lot to do and no time in which to do it due to frequent interruptions and distractions, they can end up feeling powerless and disconnected.

Too many projects

Lastly, excessive workloads can contribute to negative employee outlooks. When employees have a greater number of projects than they can actually handle, it’s easy to feel overburdened. And, often, the most competent employees are impacted in this way, as they’re frequently given too many projects because managers assign their best employees to the most important projects. This can be especially costly, as it puts high-performing employees at a greater risk of feeling burnt out and, ultimately, leaving. 

Lacking connection

A company is a network of personal and professional relationships, and employees can become disconnected from work and their peers when these relationships aren’t properly fostered. These feelings can be difficult to identify through employee surveys, but certain indicators give a clearer picture of whether or not your workforce is developing strong relationships. 

Too few meetings

It's possible to have too many meetings, but it’s also possible to have too few: meetings provide opportunities for employees to develop relationships and a sense of connection to their teams and tasks. Nobody works in a vacuum, and productivity depends on collaboration. The perfect number of meetings naturally varies from one team to the next, but there should be some meetings on the calendar, including peer catch-ups, skip-level meetings, and manager 1:1s. If you notice changes to meeting frequencies, or a complete lack of meetings, something could be wrong. 

Recent or frequent management changes

High manager attrition and frequent management changes are also something to look out for. Managers significantly impact the employee experience and, when a good one quits, their team may do the same soon after. High attrition rates at the management level can contribute to unstable employee retention rates at lower staff levels. 

The effects of peer and collaborator attrition compound with manager attrition: if a manager leaves, some of that manager’s team members may quit. This combination of manager turnover and peer attrition, in turn, causes even more people on the team to leave.

Not enough recognition

A lack of employee recognition can also contribute to toxic work culture. Studies show that many business leaders don’t prioritize employee recognition, yet most employees report being dissatisfied with the amount of recognition they receive at work. Businesses often fail to give recognition because they believe it should happen organically, or that people know when they’ve done a good job—but this often isn’t the case.

Unfair Compensation 

The best predictors of pay-related employee attrition are comparative metrics. People feel most unfairly compensated (and justifiably so) when their compensation compares poorly to that of other professionals in their industry. As such, we’ve identified potential issues related to compensation. 

Pay gaps based on gender or race

Pay is obviously important to employees, and compensation can be the source of workplace toxicity when inequities are known to exist. If pay gaps based on gender, race, or ethnicity across roles or cohorts exist at your company, you’re at risk of losing talent that would be discouraged upon learning this. 

Position in range: Low pay relative to role

“Position in range” indicates how much an employee is paid as a percentage of the maximum salary for that employee’s role. It shows how much more an employee could be paid before reaching the maximum market salary rate for that position, and identifies which employees are being underpaid relative to their peers. Those who are, are likely to quit because they feel unfairly compensated.

External compa ratio: Low pay relative to market salary range

An external compa ratio compares an employee’s pay to the midpoint of the salary range of the market for their position. Like position in range, this ratio quantifies how fairly an employee is being compensated relative to their peers in the industry. An external compa ratio under 1.0 means an employee is paid less than the midpoint of the salary range for their position, and is at a higher risk of quitting to find a better-paying position elsewhere.

Internal compa ratio: Low pay relative to internal salary range

Internal compa ratio is calculated similarly to external compa ratio, but measures an employee’s salary against the midpoint of the salary range for equivalent positions within your company. An internal compa ratio of less than 1.0 indicates that an employee makes less than others in equivalent positions in your company, even if their salary is high in comparison to the market rate. This measure of unfair compensation leads to an increased risk of salary-based attrition. 

Low pay relative to inflation 

Pay raises are standard practice in most industries, but they need to be meaningful. Unfortunately, cost-of-living raises are often less than actual increases in the cost of living for a designated area, and are instead based on arbitrary traditional standards, or calculated using data that’s broad or irrelevant. Historical data on company pay raises should be compared to the historical cost of living data for the region your company is based in, and pay increases should reflect the actual cost of living for your employees. If they don't, employees can easily look into employment elsewhere.

Inability To Grow

Stagnation and lack of growth can ultimately contribute to a toxic work culture, as employees can feel trapped without a path for professional development; employees, especially the most productive ones, desire career advancement. 

Without clear opportunities for professional growth, people lack a sense of control over their careers. Several indicators can reveal if employees feel stuck at your company, increasing the likelihood of their looking for opportunities elsewhere.

Too long in a single role

An employee in the same role for a long time can indicate a lack of growth opportunities. Employees may not be getting the skills they need to advance to a new position within the organization if they’ve spent a significant amount of time in the same position. Career stagnation resulting from too much time in a single role can cause employees to look for external opportunities. 

Not enough role changes

The number of job changes an employee has gone through can also indicate how likely an employee is to jump ship for another company when they’re unhappy. When combined with time in role, this number can hint at when an employee will leave to move up in their career elsewhere. 

Lengthy tenure without change‍

Tenure can give even more insight into possible employee retention. If an employee has not only been in the same role at your company for a long time, but has also been at the company for a long time, paths for advancement within your organization are likely limited. 

How to fix a toxic work environment

From your employees’ perspective, if there’s no indication that a negative work environment will shift to a more positive one, leaving a toxic work environment becomes their only option. Fortunately, there are things you can do as a manager to prevent this from happening. Based on our research, we recommend taking seven steps toward fixing a toxic work environment.

1. Take Responsibility As Leadership

Senior leadership and above should set the example as models for the level of trust and respect that your company embodies. People at the top often get away with poor behavior that establishes a pattern and makes its way through an entire company; ensure this isn’t the case at your organization by setting expectations as leadership from the top down. 

2. Balance Or Reduce Workloads

Work overload can lead to burnout. Mitigate this risk by fairly distributing projects and ensuring you’re not leaning too heavily on just a few key contributors. Consistent data collection and analysis can help track project loads. By actively observing employee metrics, you can spot behavioral changes that indicate unbalanced workloads. 

3. Increase connection

Prevent isolation and foster a respectful, empowering environment by creating a company culture of belonging at work. Encourage meaningful connections between managers, peers, and collaborators by bringing people together socially through team-building activities, or by blocking out a few minutes of social time during meetings. Informal catch-ups with colleagues, skip-level meetings, and direct manager meetings all have the potential to increase employee connections. 

4. Introduce maker time

Carve out protected hours during the workday so that employees are guaranteed times with no meetings or interruptions from supervisors and managers. Reduce the number of meetings employees are expected to attend whenever possible, and strategically schedule meetings in a way that allows employees to have plenty of uninterrupted time to focus on their work to respect their dedicated maker time.

5. Recognize achievements

One simple strategy for regularly recognizing employee achievement is to require supervisors and managers to publicly recognize at least one team member during every meeting, even if the recognition is for something small. This is easy to implement and builds the habit of recognizing jobs well done. Other recognition opportunities include dedicated Slack channels or monthly awards.

6. Solve pay gaps

Most company leaders understand that they need to offer competitive salaries to retain employees. Track salaries relative to the rest of the industry and compare salaries within your company to keep tabs on how your compensation packages stack up, and make adjustments as needed. If possible, give advancing employees raises when they move into higher positions that match what they would be able to negotiate if they moved to another company.

7. Introduce growth pathways

Yearly raises and loyalty programs aren’t enough: managers and supervisors should work with employees to map out pathways to take on new roles and responsibilities within the company. 

If you don’t have a dedicated learning and development team, ensure that managers regularly check in with their team members about what kind of learning would benefit their current and future positions. Additionally, training programs can teach employees new skills for their next position in the company.

Identify culture risks and act as early as possible

Diagnosing a toxic work culture is the first step to fixing it and Praisidio can help. Praisidio’s is able to pinpoint exact culture risks within your organization at a department, cohort, or individual level. Real-time dashboards help you see exactly where the risks are and what the cause is. 

Praisidio can also help you turn your workplace culture around with actionable retention strategies tailored to individuals, cohorts, or entire departments. This gives you the potential to save significant sums on attrition (up to $10 million or more for large corporations) without stretching your team.

Sign up today for a demo and see how Praisido can help you identify attrition risks within your workforce and solve them in real time.