Signs of a toxic work culture (and what to do about it)

Definition of a toxic workplace

Put simply, a toxic work environment makes your job stressful and unpleasant and your workplace an unhealthy place to be. Negative behaviors such as constant criticism, bullying, disrespect, and gossip are commonplace, and make it hard for people to enjoy their jobs and do their work well.

Sadly, toxic workplaces are quite common. Studies show that almost two-thirds of people worldwide have experienced toxic situations at work². This could be because of the organizational culture or specific individuals within it.

Toxic work environments impact both men and women, but women are 41% more likely to experience such cultures compared to men³. Additionally, racial minorities are also more susceptible to the effects of toxic workplaces⁴.

Working in a toxic environment can have a negative impact on both mental and physical wellbeing. Almost 50% of Australian workers say their mental health suffers because of their job⁵. When people feel unhappy and disrespected, they become less motivated, engaged, and focused on their work. Toxic traits in other employees also disrupt teamwork, collaboration, and good communication, and this makes the entire team less productive. A toxic workplace also leads to high turnover rates.

Toxic culture is a prime reason why people quit their jobs in the US – a whopping 4.4 million individuals resigned because of it in 2022 alone⁶.  When people feel mistreated and unsupported, they often look for better opportunities elsewhere. In the UK, 42% of employees have left a job because of a toxic work culture⁷.

These numbers tell a story.

Toxic work environments have real consequences for both individuals and organizations. Recognizing the signs early and addressing them with urgency is the solution to creating a healthy, positive workplace in which everyone can thrive.

10 telltale signs of a negative work environment

If you have concerns about your workplace being toxic, you should know the signs to watch out for. We've compiled a list of 10 telltale signs to get you started. To simplify things, we’ve divided them into physical and emotional indicators of a negative work environment.

Let’s go over them one at a time.

Physical toxic workplace signs

1. High turnover rates

A high turnover rate in a company indicates that something is wrong. It often means that employees are unhappy, mistreated, or dissatisfied with their jobs so they start to seek better opportunities elsewhere. This is a clear telltale sign of a toxic workplace.

High turnover has a negative impact on employee wellbeing, but it also has financial consequences for your business. In 2021, the costs associated with employee turnover exceeded US$700 billion⁸.

When employees leave, you incur expenses for recruiting, hiring, and training new employees. Additionally, productivity suffers during the transition, potentially resulting in revenue losses. These financial burdens accumulate and significantly affect your organization's overall profitability.

2. Lack of trust

Trust is incredibly important in the workplace. For example, millennials are 22 times more likely to stay loyal to a company if there is a high level of trust⁹.

People often feel scared to express their thoughts or take risks in a toxic work culture. That’s because they worry about facing judgment or negative consequences. Team leaders tend to micromanage members when they don’t trust their abilities. There’s also a lack of transparency, so teams work in silos.

When trust is absent, employees become disengaged and less loyal to the company. They simply tend to do the bare minimum required and don't put in extra effort to excel in their roles. They feel disconnected from the organization and start exploring other options.

3. Lack of respect

Lack of respect is a warning sign of a toxic work culture. It is when people don't treat each other kindly or value their thoughts and feelings at work.

This affects everyone's wellbeing and makes it hard for teams to work well together. It leads to misunderstandings and conflicts, which makes employees feel demotivated and unhappy. They can start losing confidence in themselves and their abilities.

Plus, employees are 26% more likely to quit when respect is lacking¹⁰. This shows how much impact a hostile environment can have. Employees look for workplaces where people treat each other with respect and dignity.

4. Unethical behavior

When people exhibit inappropriate behaviors at work, it indicates an unhealthy work environment. Examples of such behavior include:

• Preferential treatment
• Playing office politics
• Discriminating against others
• Harassing others
• Gossiping
• A lack of diversity and inclusion

These behaviors reduce workplace morale, making everyone feel frustrated and unhappy. Unethical behavior also damages your brand reputation. You could lose customers, clients, leadership team members, and stakeholders as a result. Plus, it can lead to lawsuits and penalties from regulatory authorities.

5. Lack of recognition

When people work hard and contribute to their job, it feels good to be recognized and appreciated. But in a toxic workplace, that recognition is often missing. Managers and colleagues don't acknowledge the efforts and achievements of their team members. This makes employees feel undervalued, demotivated, and unimportant¹¹.

Employees also lose the drive to do their best and become disconnected from their work. Lack of recognition also creates resentment and frustration among employees. And this makes it harder for your entire team to work together effectively.

In a healthy work environment, employees' efforts and accomplishments are recognized and appreciated. This boosts their spirits and creates a positive atmosphere. There is higher morale and better productivity.

Other key signs of a toxic environment are:

• Lack of clarity
• Poor communication
• Cutthroat competition
• Bullying
• Poor work-life balance
• Lack of empathy
• Unrealistic expectations
• Lack of career growth opportunities
• Bad or toxic leadership, particular an unhealthy need for power and control

Let’s go over five emotional signs of an unhealthy work environment.

Emotional toxic work culture signs

1. High level of stress

Did you know that in Australia, 70% of workers say they experience stress at least once a week¹²? Excessive stress is often the result of a toxic work environment where managers overwhelm their workers with too much work, set unrealistic expectations, and constantly pressure them to deliver, without offering support or clear communication.

The physical and mental health issues that result from high stress levels include imbalances between work and personal life, anxiety, depression, fatigue, and burnout.

2. Poor morale

When a work environment becomes toxic, morale tends to suffer. This can lead to employees feeling undervalued and unsupported, which in turn can result in decreased productivity and commitment to their work. There are several factors that can contribute to low morale, including a lack of recognition for their hard work, toxic leadership, unclear expectations, limited growth opportunities, and constant negativity. Also, low morale can lead to higher rates of absenteeism and ultimately impact the success of the company.

3. Bad vibes

If you ever feel uncomfortable or uneasy while at work, this could be a sign of a toxic work culture. This feeling can stem from v negative interactions, disrespect, lack of trust, or just a general sense of unease. It's important to trust your gut and recognize these ‘icky feelings’ as they can help you identify potential issues and take action to address them.

4. Psychological burnout

Psychological burnout happens when stress becomes too much to handle over a long time. It happens when you face constant pressure without the right help or tools to deal with it. This kind of chronic stress can harm your mental and physical health. It can lead to conditions like heart disease and high blood pressure. Burnout also has a huge financial cost. Globally, approximately 12 billion workdays are lost each year due to depression and anxiety, resulting in an estimated cost of around US$1 trillion in lost productivity¹³.

5. Lack of motivation

When employees lack motivation, it means they don't feel excited or interested in their work. They may feel unmotivated because they don't see the value or importance of their tasks, or they may feel overwhelmed and disconnected from their work.

In a healthy work culture, employees are usually motivated and enthusiastic about their work. They feel a sense of purpose and find joy in what they do. But in a poor work culture, the opposite happens. Employees may feel unsupported, unappreciated, or discouraged, which can drain their motivation.

Unfortunately, these issues reduce employee satisfaction, lower productivity, and harm overall job performance. Creating a positive work culture is important if you want to build a thriving and productive workplace for your entire team.

A healthy work environment prioritizes employee wellbeing. Employees get manageable workloads, support, and resources to cope with stress. These promote a healthy work-life balance. When these practices are in place, employees can thrive and give their best.

What's the impact of a toxic work environment?

A toxic work environment has significant impacts on employees and employers.

For example, Sarah is a sales executive at a company with a culture of favoritism. She notices that some employees are given preferential treatment and more opportunities than others. Sarah works hard to prove her worth, but despite her efforts, she is constantly overlooked for promotions and bonuses.

So, Sarah becomes disillusioned with the company and starts to feel unappreciated and undervalued. As a result, her morale declines, and she looks for job opportunities elsewhere. The company not only loses a talented employee but also risks negative word-of-mouth and reputation damage.

The costs of employee turnover include the following:

Financial cost

When a company hires a new employee to replace someone who left, it can be expensive. The cost can be anywhere from half to twice the salary the employee was making each year.

For example, if a company has 100 employees who make an average of $50,000 per year, it could cost the company $660,000 to $2.6 million to find and train new employees each year¹⁴.

Productivity cost

When a work environment is toxic, it leads employees to feel unhappy and stressed. This can cause them to lose motivation and feel demoralized, which makes them less productive. It can even lead to health problems.

In Australia, mental illness caused by toxic work environments costs the economy a lot of money – between AU$200 billion and AU$220 billion every year, and toxic workplaces are responsible for up to AU$17.4 billion dollars of this cost¹⁵. So, toxic work environments not only have the potential to hurt employees but also to have a big impact on the economy.

Legal and reputational costs

When a workplace is toxic, it can lead to some serious problems for the company. Employees may take legal action against the organization if they experience things like discrimination or harassment.

Settling these lawsuits outside of court can cost around $40,000 on average. In some cases, when there is discrimination or wrongful termination involved, the settlement can go up to $1 million in about 10% of cases¹⁶. Legal fees and compensation costs add up.

Moreover, the company's reputation can also be damaged, making it harder to find and keep customers and employees. As a result, the company might miss out on business opportunities and lose money.

What are the causes of a toxic workplace?

Toxic workplaces are caused by several factors, varying depending on the organization. Here are 10 common causes:

1. Poor communication

If communication is not clear and effective, misunderstandings occur, creating tension and conflict in the workplace. For example, if a manager fails to communicate important deadlines to their team, it causes stress and frustration for the team members who may struggle to complete the work on time¹⁷.

Also, not knowing an employee’s preferred communication style contributes to confusion and poor team performance. For example, you may have someone on your team who has an affective or neutral communication style. Knowing the difference will help you communicate effectively and boost productivity.

2. Micromanagement

When team leads excessively control and constantly monitor employees, they create a stressful work environment. In fact, 70% of employees say it affects their work performance while 85% say it has negatively impacted their morale.

Micromanaging employees suffocates and restricts employees in their roles. They become hesitant to take initiative or make independent decisions due to fear of negative consequences or harsh criticism. This stifles their creativity, problem-solving abilities, and overall job satisfaction. Needless to say some employees quit their jobs as a result¹⁸.

3. Bullying and harassment

Bullying or harassment in the workplace creates a hostile and toxic environment for employees. For example, a coworker who makes derogatory comments about someone's race or gender makes the victim feel uncomfortable, unsafe, and disrespected.

Experiencing such behavior can lead to increased stress, anxiety, and a decline in self-confidence¹⁹. It creates a barrier for employees to fully engage in their work and collaborate effectively with their colleagues.

4. High levels of stress

Champion Health found that 35% of employees experience extreme stress at work that impacts their productivity and performance²⁰. When employees are expected to work long hours, meet unrealistic deadlines, or deal with an excessive workload, it causes high levels of stress and burnout. For example, if a company places unrealistic sales targets on its sales team, it can lead to stress and pressure to meet them, potentially resulting in a toxic work environment.

5. Lack of support

When employees do not feel supported by their managers or colleagues, it can lead to feelings of isolation and demotivation. For example, if an employee struggles with a project and their manager is unresponsive to their requests for assistance, it can make them feel unsupported and alone.

6. Poor boundaries

Boundaries are like rules that define how employees and managers should behave and interact with each other. When these boundaries are ignored or not enforced, it can create a toxic work environment.

For instance, if a manager frequently asks employees to work extra hours without any extra pay or recognition, it can result in exhaustion and resentment. Likewise, if employees are expected to answer work-related messages or emails outside of their regular working hours, it can interfere with their personal life, causing stress and harming mental wellbeing.

7. Lack of trust and transparency

In a toxic work environment, trust and transparency between employees and management are missing. This happens when management keeps important information from employees, makes false promises, or repeatedly fails to keep their word. As a result, a sense of mistrust prevails, creating an unhealthy workplace atmosphere.

8. Unreasonable workload

When employees are overloaded with excessive work and unrealistic deadlines, it can result in burnout, stress, and a sense of being overwhelmed. This creates a negative work environment, where employees constantly feel pressured and believe they cannot meet expectations or reach their goals. For instance, if a manager consistently assigns unrealistic deadlines or expects employees to work long hours without proper compensation, it contributes to a toxic work environment.

9. Poorly defined core values

Having strong core values is important, as it gives employees a sense of belonging and a clear direction to embrace and reflect in their work.

For example, let's say a company values integrity as one of its core cultural values. When these values are clearly communicated and reinforced, employees understand the importance of integrity and incorporate it into their daily work. This creates a consistent and trustworthy brand image for the company, both internally and externally.

On the other hand, without clear core values, employees may have varying interpretations of what is expected of them, leading to inconsistent behaviors and a toxic brand identity. This results in confusion, lack of alignment, and negative company culture.

At F4S, we have a unique way of understanding how each employee works and what motivates them. We use a tool called the culture map to gather information and give you valuable insights.

Get started by taking  the free assessment. You can even create a team and invite them to take the assessment. You’ll gain instant access to personal and team insights.

With this data, you can make smarter choices when it comes to hiring new team members, managing your existing team, planning workflows, and building a strong team dynamic. Your team dashboard will provide you with helpful suggestions based on the insights we gather.

These recommendations will help you:

• Understand what your team members workplace preferences and how they like to work
• Identify any motivation gaps that could lead to conflicts within the team
• Find ways to achieve your goals more efficiently
• Figure out which motivations support or hinder your team's objectives.

By using these insights, you can improve your team's performance, work towards your goals more effectively, and get things done quicker and better than before.