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By: Amber Pereira on February 10th, 2015

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What a Toxic Culture Can Cost Your Business

Risk Management

We have all seen it. Whether it be firsthand experience, or tales that were shared by the water cooler, you are probably aware of the toxic cultures that exist in the working world.

A toxic culture is like an ominous cloud that hangs over a company threatening to unleash a storm at any second. Such an environment could cost a company more than just the tranquil atmosphere, it could also have a financial toll.

At Helios, we help our clients understand their current environment by performing a culture study and providing a plan of action for improvement. For now, here are the biggest indicators to look for below.

4 Biggest Problems a Toxic Culture is Creating in Your Business

  1. Unfocused Employees. A toxic culture may cause employees to lose focus and become distracted at work. They may not feel as motivated to work and their productivity level could plummet costing an organization valuable time and resources.
  2. Communication Problems. A toxic environment can impair many key components to success, one of the most costly being communication. Certain employees may not want to communicate with others they deem toxic or vise versa causing an interference of communication and a dawdling of productivity.
  3. Bad Reputation. Eventually, word will get around. Whether it be by employee ratings on websites such as Glassdoor, or just in-the-field gossip, a toxic environment could cost an organization its positive reputation. Ideal candidates may not apply for openings, and high performing employees may not be able to withstand the negative environment. A bad reputation can increase employee turnover and thus result in an increase in the costs associated with recruiting, training and retaining employees.
  4. Increased Likelihood of Lawsuits. Toxic environments create toxic employees which releases the bevy of lawsuit opportunities. An organization which ignores situations caused by toxicity in the workplace are more likely to be sued by an unhappy employee who feels victimized. Regardless of whether or not the lawsuit comes to fruition, the matter itself is enough to cause distraction and discord in your workplace.

If this is sounding like the environment you are in, you may want to consider a making improvements immediately by contacting a third-party consultant.

The benefits of a positive environment definitely outweigh the costly negatives with higher engagement, productively and business success. As a business leader, you should always set a positive standard of behavior, and have repercussions for employees who do not uphold this standard.