With 50% of employees in the UK quitting their jobs to escape their bosses and 57% of employees in the US leaving their jobs ‘specifically’ to get away from their managers, dealing with the fallout of toxic bosses has become too high a price to pay. Businesses are realizing the cost and making mitigation a priority – in the UK, the number of employees quitting due to poor workplace cultures is down 13% from the 2018 data. In the US, it’s down 3% from 2018. This is a global issue. Now, amidst COVID-19 and ongoing instability, organizations need to focus; we can no longer afford to put inclusive leadership in the category of ‘nice to have’.
Last year, the Financial Times published new research showing that ‘boss quality’ outweighed the net effect of the three main influences on job satisfaction: pay, length of working hours and work-place environment. A bad manager can have a damaging effect on multiple employees, and that negativity spreads exponentially over the years, increasing employees’ stress and reducing their motivation. These managers infect an organizations’ culture, simultaneously damaging both employee job-satisfaction and the likelihood of the organization retaining them.
Those organizations who aren’t savvy enough to think in the long-term are often seduced by the short-term profits these managers extract from their employees. Bosses of this kind also tend to embed themselves within the culture, holding the people who work beneath them in a kind of Stockholm Syndrome. Some employees even glamorize their managers as relentless go-getters forgiving them (though they don’t apologize) for their behavior.
So, what’s the cost?
A new report from HR software provider Breathe suggests that the cost of toxic workplace culture is around £15.7 billion per year in the UK. Over the last five years, American businesses lost $223 billion due to bad culture.
This problem is far too costly to ignore. Dealing with it requires a collective effort from the entire organization to create an environment in which toxic leaders are unable to thrive.
First, you have to understand the conditions they create in order to do so. Toxic leaders may have a lot of trouble keeping new employees, but they’re often protected by a cadre of the ‘old guard’. They surround themselves with individuals with similar leadership styles and get rid of new employees (potential rivals) via a process of attrition. New employees, faced with less engagement and opportunity, are likely to quit. Those employees who stay do so either because they’re highly engaged with the work itself, or because they don’t recognize their leader’s behavior as inappropriate. All too often, these employees get through the day, hoping that things will change. If they linger too long, they may find themselves in professional quicksand as they focus their energy on work while the exhaustion of higher stress and work-life conflict blunts their ability to actively seek alternative employment.
As long as performance stays high, organizations may decide to follow the maxim, ‘if it ain’t broke don’t fix it’ and allow toxic leaders to continue without interference.
If those leaders are effective and employees are willing to linger, what’s the problem?
- Wasted recruitment fees when new hires flee
- Higher costs in health and wellbeing benefits and absenteeism due to higher levels of work-life conflict and stress
- Loss of creativity and collaboration which eventually seeps through the organization
- Setting up larger ethical and long-term sustainability concerns
If encounters with their leader make an employee feel excluded or bad about themselves, then there are going to be problems further down the line. It’s clear, toxic leadership is bad for business and goes against everything the modern inclusive employer is striving for. To attract and retain talent, we need inclusive leaders – it’s a fact. To eradicate toxic leadership and encourage inclusive leadership, here are some starting points:
- Make an honest assessment of the underlying culture: Do leaders feel such pressure to succeed that they become toxic through stress? Do employees feel the pressure so much that they’re willing to tolerate horrible behavior? Don’t just rely on engagement surveys -- consider other measurements like turnover patterns, or organizational culture or opinion surveys which can provide a 360-degree picture by gauging stress and work-life conflict amongst employees.
- Create opportunities for employees to speak anonymously about what is happening in the organization and consider the history of grievances. While a single accusation may be the result of a disgruntled employee, a string of similar complaints or feedback over time should trigger a new investigation, even if each individual comment has been laid to rest.
- Use third parties to assess the culture and unearth inherent systemic issues: employees may not feel safe speaking to HR or other internal assessors. They will naturally want to avoid conflict with their leaders and protect their own interests. Bosses with ulterior motives often have a way of making their employees believe they will find out and make matters worse.
- Develop explicit standards for inclusive behaviors and encourage leaders to enforce those norms with each other. If left unchallenged, undesirable and exclusive leadership behaviors can become normalized. The leadership team needs to be direct with one another about which behaviors are inappropriate and be brave enough to challenge and support one another in enforcing those standards. One person pointing out bad leadership may seem petty, but several speaking together will be more convincing.
Exclusive leadership often promises short-term rewards. It can even create a kind of glamour. Ultimately though, it does what it says – keeps employees out. Good leaders with the courage to collectively confront toxic behavior will be able to craft truly inclusive cultures which encourage the best from everyone.