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Spike in toxic workplace culture is taking its toll

Gemma McCall, CEO - Culture Shift

Two in three (65%) employees who have experienced toxic workplace culture say the compensation they received did not make up for the emotional distress caused, according to new research*.

The research* revealed that 61% of those who have experienced problematic workplace behaviour have had to take a period of long-term leave, with over half (55%) saying the emotional distress lasted up to two years, while a third (34%) say it lasted three to four years.

“Our research reveals that two in five employees across the UK have experienced negative behaviour at work, with 42% confirming toxic workplace culture has impacted their mental health. This is a concerning statistic and businesses need to address the issue before it’s too late.

“Employees who feel valued and appreciated at work are known to thrive, work better as a team and deliver better results. But, in contrast, those who are working in toxic environments are more likely to be impacted by absenteeism and presenteeism,” comments Gemma McCall, CEO, Culture Shift.

Furthermore, data from Deloitte and mental health charity, Mind, uncovered the UK’s presenteeism problem is considerable, costing employers between £26 billion and £29 billion annually through lost productivity[i].

“The financial impact of toxic workplace culture shouldn’t be underestimated. Often, people presume that problematic behaviour only impacts those experiencing it, however our research shows otherwise,” added Gemma.

The new research out today reveals that of those who have been impacted by problematic behaviour, such as bullying, harassment or discrimination at work, the average pay-out received was £381,350. While, on average, employees themselves are footing bills of £1,629 for things like therapy and legal fees.

The cost of recruiting is also putting a dent in the profits of businesses nationwide as analysis reveals that, on average, it costs £30,000 to recruit a new employee[ii].

“It’s not just the cost of legal fees and pay outs which businesses need to be aware of, but having a toxic workplace culture directly impacts the bottom line through lost working hours, having to recruit new employees and paying temporary staff to cover long term sick leave.

“In addition, problematic workplace behaviour can impact an investor’s decision on whether or not to provide funding,” continues Gemma.

Almost nine in 10 (86%) investors say if they had invested in a company that was then embroiled in a workplace bullying or harassment case, they would rapidly distance themselves from the company.

For organisations hoping to secure investment, almost three quarters (71%) confirm they wouldn’t invest in a company that had a problematic workplace culture, while two thirds (64%) wouldn’t invest in a company that has numerous NDAs with former employees.

The general reputation of a company and how it treats its employees are the two most important non-financial factors which investors take into consideration when deciding where to invest.

Ranking the most important non-financial factors investors take into consideration: 

  1. General reputation of the company (54%)
  2. Employee treatment (36%)
  3. Sustainability/environmental initiatives (36%)
  4. Relationships with customers (36%)
  5. Relationships with suppliers (32%)
  6. Workplace culture (25%)
  7. Meeting/being prepared for current/future legislation (14%)
  8. Employee churn/retention (7%)

“From appealing to investors and a business’ profitability, to the cost of recruitment and legal action, there is only one way that businesses can avoid these added costs and that’s by looking after their people,” concludes Gemma McCall, Culture Shift CEO.



*Research from Culture Shift

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