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How Toxic Company Culture Is Driving the Great Resignation

 How Toxic Company Culture Is Driving the Great Resignation

Research reveals how lack of inclusion, fairness and purpose at work is causing employees to leave their jobs in droves.

Earlier this year, MIT Sloan Management Review published a survey that revealed the impact of toxic culture on the Great Resignation.

After analyzing 34 million online employee profiles, researchers found that “a toxic corporate culture is by far the strongest predictor of industry-adjusted attrition and is ten times more important than compensation in predicting turnover.”

What contributes to toxic company culture? According to the MIT analysis, there are three key factors:

  • Failure to promote diversity, equity and inclusion
  • Workers feeling disrespected
  • Unethical behavior

Great Place to Work® research reveals the same about employee retention and flight risk drivers.

In our 2021 survey of more than 330,000 U.S. employees, those who said they didn’t intend to stay at their company a long time pointed to the absence of the following as key culprits:

Let’s narrow in on that last one: diversity, equity, inclusion and belonging (DEIB). Employees with low intent to stay raised these concerns about issues relating to equity and inclusion:

The same study also revealed that underrepresented minority groups were at the highest risk of leaving.

So, if toxic company culture is the problem, can you fix it?

In short, yes. But it will take time and consistency. 

“Rebuilding trust is possible,” says Julian Lute, senior strategic advisor at Great Place to Work. “Steady, consistent focus in the right places will help you gain traction in support of your efforts to be better.”

Julian recommends three ways leaders can start to change toxic company culture:

  1. Accepting accountability
  2. Following your words with your actions
  3. Committing to ongoing, transparent and two-way communication

Many organizations who get Great Place to Work-Certified™ score high on DEIB efforts and experience high retention figures.

Take the company Bitwise Industries, which tripled in size over the last two years while others struggled to hire and retain staff.

CEO and founder Jake Soberal credits the rapid workforce growth to their commitment to diversity and individualism and meeting employees’ needs (rather than only expecting employees to meet company needs).

“It’s not: we will tolerate you, we will charitably serve you,” he says. “It’s: you are essential to our collective success. We have continually gotten better if for no other reason than we’ve added wonderful people who have expanded the edges of that culture and enriched it.”

Focusing on employee needs pays unending dividends, as evidenced by our decades’ worth of research. Organizations focused on connecting purpose to employee work and diversity and inclusion, among other things, experience a positive workplace culture and higher retention.

It takes work, but it’s never too late to start.

The inside word on company culture

Get more ideas from Great Place to Work on how to attract and retain top talent in our monthly company culture newsletter where we feature the latest employee survey research, advice and tips. 


Claire Hastwell