Twenty years ago, comedian Ricky Gervais launched “The Office”, a British sitcom about the worst boss in the world. The series portrayed a toxic corporate culture rife with disrespect, misogyny, racism, unethical behavior, cliques and downright abuse. This was an office no one would ever want to be a part of.
Yet in real life, every day, millions of U.S. employees do work in a culture as toxic as this U.K. sitcom and its later U.S. version portrayed. Perhaps this explains the show’s enduring appeal. On average, 1.3% of American employees at large companies explicitly describe their company’s culture as toxic or poisonous, according to Glassdoor, a website where employees rate their workplace. More than 10% of employees do not use this exact language, but do cite an indicator of toxicity including unethical behavior, abusive management or racial inequity in their Glassdoor review.
These are employees from large, well-known companies. If I were to scroll down my list of the most toxic large employers in America — organizations where more than 20% of employees negatively cite toxicity in their Glassdoor review — you would recognize most of them as household names. Toxicity is hiding in plain sight.
For millions of U.S. employees, all of the head-scratching about the cause of the Great Resignation seems a little out of touch. To echo political strategist James Carville, “It’s the toxicity, stupid.” Employees face issues including disrespect, cronyism, racial inequity, gender inequity, LGBTQ inequity, disabled inequity, unethical behavior, dishonesty, cut-throat competition and other abuses far too often. They’re sick of working in a real-life episode of The Office. They’ve had enough.
This is the conclusion of my team’s latest research at MIT, published in MIT Sloan Management Review. Using advanced text analytics from CultureX, my startup, and attrition data from Revelio Labs, we analyzed more than 1 million Glassdoor reviews about the largest U.S. employers, the “Culture 500.” Employing a Nobel prize-cited methodology (SHAP Drivers), we investigated which aspects of an employer’s culture had the greatest impact on an employer’s attrition level during this current “Great Resignation.”
The clear culprit? Toxic culture. We found toxic culture was more than 10 times as powerful of a driver of attrition as compensation.
What does this mean for companies? It means that toxicity is the kiss of death. Even a whiff of toxicity will send employees running. Maybe they would have put up with it a couple of years ago; after the COVID-19 pandemic, they will not.
When thinking about toxic culture, business leaders should ask four questions.
1. How toxic is my culture, relative to peers? In any large organization, at least a few employees will inevitably say the culture is toxic. Even in the saintly St. Jude Children’s Research Hospital, one of the healthiest organizational cultures in America (featured as a Culture 500 Culture Champion for its integrity, respect, and patient orientation), 0.2% of employees on Glassdoor explicitly say the culture is toxic. The real question is how many employees feel this way, relative to an appropriate benchmark set. Is this a culture with an average amount of toxicity? Or is it a toxic culture? Toxicity can exist and drive attrition even in healthy cultures, but toxic cultures are an entirely different ball game.
2. Where are the microcultures of toxicity in my organization? Our research at MIT indicates that toxicity is rarely evenly distributed throughout an organization. Rather, it lives in discrete microcultures of elevated toxicity within a structure. Accurately identifying these microcultures is crucial for addressing this issue.
3. How does toxicity live in these microcultures? Toxic cultures can take different forms, even within the same organization, and the interventions will vary accordingly. A microculture facing issues with an abusive boss will require a different intervention than one facing issues with favoritism, for instance.
4. Who are my toxic leaders? Toxic leaders have a negative and disproportionate effect on the culture. Identifying who your toxic leaders are and addressing that behavior is critical to building a less toxic culture. In the British version of The Office, Wernham Hogg’s executives eventually improved the company’s culture by firing David Brent, the office manager. While difficult personnel decisions are sometimes necessary, toxic leadership can also be addressed through stern warnings or coaching.
The key is to first identify who these leaders are. In smaller organizations, you might already know them. In large organizations, it can be helpful to analyze 360-degree feedback comments and performance reviews to identify leaders with toxic traits.
We conducted our research on drivers of attrition at MIT using a rigorous methodology and millions of datapoints over the course of about five years. But, in a way, you can get to the same place by watching the original, British version of The Office. People quit their jobs because they do not like working in a toxic culture. They are sick of abusive management, being disrespected, being discriminated against, unethical behavior, leaders playing favorites, and all the other markers of toxicity. They are standing up for their right to work in a healthy and rewarding culture. If that was not a right before, it is becoming one now.
Leaders who are serious about winning the war for talent during the Great Resignation must do more to address toxicity. This issue affects every large organization, although it is more pronounced in some organizations than others. Leaders need a clear sense of where they fall on the spectrum, where and how these issues exist in their organization, and how they can intervene to improve the lives of their employees. Then they need to act, because employees will continue to leave until they do.
Charlie Sull is co-founder of CultureX, a human-resources technology company that uses artificial intelligence (AI ) to measure and improve corporate culture.
More: The ‘Great Resignation’ might not be such a problem if more companies cared less about the minimum wage and started paying a living wage
Also read: 5 steps to snaring new opportunities at work without having to join the Great Resignation