How to Tell if Your Work Culture is Toxic & How to Change it (With Examples)

How do you know if a work culture is toxic?

Company culture is hard to define. It's a combination of shared values, leadership style, and working practices that together dictate the effectiveness of any professional environment.

When that culture is healthy, communication is productive, employees are engaged, and as a consequence, business growth is achieved. When it's unhealthy, the opposite is true. Cracks begin to appear in productivity, working relationships suffer, and a general lack of enthusiasm can be felt throughout the company.

At its worst, a toxic work culture can create a hostile environment detrimental not only to a business's bottom line, but also to employee wellbeing.

With that in mind, business leaders should be proactive in monitoring company culture, and take appropriate steps when things start to turn sour.

Here are five signs there could be something amiss, with ideas on how to fix a toxic work culture and get business back on track.

5 signs of a toxic work culture (and how to change it)

1. Lack of empathy

One clear sign of a toxic work culture is a lack of empathy - where employees show a complete disregard for the thoughts, feelings and experiences of their coworkers.

This typically starts at a managerial level: for example, company bosses that are dismissive of the personal needs of their staff, or ignore their opinions in the decision-making process.

But it's not just leaders that can demonstrate a lack of empathy. Competitive employees that are out for themselves can also indicate a toxic work culture.

Competition can of course be healthy, but when accompanied by indifference for others, it creates an atmosphere of mistrust, backstabbing and adverse rivalry.

How to fix it: Employees typically look to the top for cues on acceptable behaviour, so lead by example. Create a culture of respect through active listening and acknowledging that we all experience things in different ways. Ensure important business decisions are made as a collective, taking everyone's perspective into account.

Empathy is an inherent quality, but it can be encouraged, and once you set the tone with a compassionate leadership style, you'll soon find it becomes contagious.

2. Fear of leadership

If there's a strong sense of unease among staff when the bosses are around, you could well have a toxic work culture borne from fear. Look out for signs of avoidance, apprehension, and passive obedience.

For example, if employees follow misguided instruction without question, it's a sure sign they're too afraid to speak up. If they're nervous about approaching their managers, or worse still avoid doing so altogether, it's time to change bad work culture by reassessing leadership styles.

How to fix it: when a culture of fear already exists, it can be hard to rectify. It takes a concerted effort from those in charge to change the way they work, and integrate themselves with the teams they manage.

Ownership is key here. Encourage managerial staff to accept their failings and make amends where necessary, and if there's a deep-rooted problem you may need to look at your own behaviour.

Consider managerial training for all relevant parties, and create a strong leadership model based on accessibility, two-way communication and mutual respect.

3. Cliques and groups

It's natural for employees to form personal friendships, and while this shouldn't be discouraged, it becomes an issue when those friendships are divisive. For example, if you've noted groups of individuals banding together, and excluding those outside their clique, you have a toxic work culture in the making.

What's likely to evolve are pockets of personality types that don't interact well with each other, damaging collaboration and productivity. In the worst-case scenario, you may find certain employees fall victim to hostile behaviours, suffering in terms of mental wellbeing as a result

How to fix it: it's impossible to stop friendships from forming, but when a clique appears there's usually a certain type of person at the helm. These characters don't make for strong team players, so it's important to know the behavioural traits you're looking for in your workforce and use this to inform recruitment.

If you've already sensed groups evolving, try planning team building exercises that bring different parts of each group together, encouraging them to form relationships outside their own clique.

4. Failure is punished

The way failure is perceived says a lot about a company's culture, and when mistakes are continually met with punishment, it's another sign of toxicity in the workplace. Instead of using failure as an opportunity to learn and grow, in a toxic work culture blame is visibly placed and employees shamed into submission.

Say, for example, an employee misses a deadline that causes major disruption to a project. An effective work culture would look at the reasoning behind it - did that employee have too much on their plate? Or was there miscommunication somewhere along the line?

By contrast, in a toxic work culture none of these factors would be addressed. The employee in question would be held responsible, and possibly removed from the project team.

How to fix it: this one is a relatively easy fix – avoid placing blame. When things go wrong reflect on the circumstances as a whole. Talk to those involved to figure out why failure occurred, and how you can prevent it from happening again.

Of course in some cases there may be a need to take a harder line, but most mistakes can be handled with a degree of diplomacy that not only stops employees from becoming disheartened, but encourages them to take the best from a bad experience.

5. High employee turnover rate

Perhaps the most obvious sign of a toxic work culture is when your staff are frequently moving on to pastures new. You can accept the odd one or two feeling the role isn't the right fit for them, but when there's a persistent stream of resignations landing on your desk, there's clearly a wider issue.

There's a new generation of workers that expect more from their employers. They appreciate how important professional fulfilment is, and are unlikely to stick around where a toxic work culture is present.

How to fix it: the only way to fix this one is to identify the root of toxicity in the workplace and take steps to resolve it. Try talking to those that have stuck around to get their take on the situation.

If they're disinclined to talk about it it's likely a managerial issue, in which case you need to look at your leadership values and work hard to make them more inclusive.

Changing work culture

There's no blueprint for changing work culture, and it can't be achieved overnight simply by introducing new policies and procedures. Like any cultural shift, it's a multifaceted, gradual process; one that needs to be approached with a holistic strategy.

Company culture encompasses every aspect of a business: its goals and objectives, core values, brand identity, and most importantly, its people. To create an effective working culture, all of these things need careful consideration, and there needs to be a clear example from the top down of how things are done.

It's challenging, but once you get it right, it's a win-win situation.

Impact on employees

Whilst a strong company culture is more felt than it is seen, its effects are clearly visible. Employees feel a part of something – they gain a shared purpose, and understand the value of their contribution towards business goals.

They feel respected by those that manage them, and have an increased sense of job satisfaction, with fair compensation, a healthy work life balance, and opportunities for growth.

In short, their professional lives are far more gratifying, and that makes for a happy, motivated, and loyal workforce.

Impact on businesses

From a business perspective, the benefits of a strong working culture all come down to one thing: increased success. There's greater employee retention, lowering recruitment costs and ensuring top talent remains within the company.

Since staff are more motivated, they become proud representatives intent on upholding business reputation.

Ultimately, no matter what industry you operate in, a strong company culture boosts morale, driving innovation, productivity, performance and profitability.