In recent research, MIT Sloan Management Review found that toxic culture has become the single largest predictor of attrition, finding it to be 10.4x more impactful on employee turnover than compensation. This pivotal shift has increased the pressure on People, and DEI leaders, yet, the tools and resources to meet the increased demand have not grown; causing higher rates of burnout for those driving workplace culture. We believe that workplace culture goes beyond the responsibility of People and DEI Teams, and lies with CEOs, CFOs, the board, and investors. Workplace culture has become integral to a company’s success, and those that fail to create cultures of belonging and support, are those struggling the most to hire, retain, and grow talent resulting in significant costs.
For a long time, toxic culture has been described as a hidden cost to organizations, but over the past two years, that cost has moved to the forefront. Toxic culture is directly linked to higher rates of turnover, lost productivity, inability to attract talent, and increased physical and mental health challenges making it essential for companies to address. Yet, pinpointing what exactly drives these costs remains challenging, often resulting in inaction, or fixing the symptom rather than the root cause.
To more deeply understand the drivers of a toxic culture a follow-up article by MIT Sloan Management Review digs deeper and found that the top 5 drivers are; non-inclusive environments, disrespect, unethical behavior, cutthroat behavior, and abusive managers. Brene Brown on her “Dare to Lead” podcast that included the researchers of the article, noted that what makes these drivers different than, for example, unhealthy meeting cultures, is that they’re non-compartmentalizable. They’re directly tied to our emotional state of being, meaning we take these experiences home with us; affecting our day-to-day life outside of work.
Non-inclusive work environments, in particular, were the largest single predictor of why employees would classify a workplace as toxic. Looking at inequity across the following groups: gender, race, sexual identity and orientation, disability, and age.
The research also demonstrated how measuring culture in aggregate is highly flawed and often misses critical microcultures. Thinking about the impact of exclusion, underrepresented groups often make up smaller pockets of the employee base causing aggregate analysis to miss their workplace experiences and challenges. This is important for leaders to acknowledge: even if your culture seems healthy in aggregate, you’re likely to have pockets of toxicity that could affect specific identity groups, departments, or functions that might get lost in aggregate.
Understanding culture more deeply, beyond overall sentiment and point-in-time analysis, is critical for companies to identify the drivers of culture and actions that have to be taken to foster an equitable workplace culture. We believe that employees are at the center of shaping workplace culture and that they’re rightfully demanding more from companies. Companies that ensure that their employees feel heard, valued, and respected in shaping culture and key decisions, will not only create a better work environment but significantly reduce cost.
We wanted to share a few key takeaways from our experience of talking to People, DEI, and Employee Resource Group leaders across 60+ companies and what they noted as critical to helping companies meet culture demands:
Workplace culture as a corporate responsibility
The shift in workplace culture demands has increased the pressure on People and DEI leaders, yet, as we mentioned before, they’re not set up to meet these demands. The detrimental cost of missing the mark on culture goes far beyond the responsibility of People functions and should shift towards the responsibility of the board, investors, and the C-Suite as a whole. Culture has to become central to how companies measure success, and the responsibility of all parts of the organization to move towards an equitable workplace to not only ensure employee happiness but company success.
Putting employees at the center
Employee resource groups that are focused on representing specific identity groups such as LGTBQIA+, women-, black-, asian-employees, and more, have long been central to fostering a safe space for people to connect, share, and grow. We believe that the impact can span much further than creating a community. To make informed decisions on how to create inclusive environments for these communities, leaders need to take the time to deeply understand how to best support them and, as a result, implement the right set of benefits and policies. We believe that employee resource groups can be the single biggest driver of creating the visibility leaders need to build cultures of support for those that are often overlooked. To do this, employee resource groups need better support structures, resources, and tools.
Invest in connection
The above-mentioned research found that social events are critical to fostering a sense of connection, allowing employees to deepen their relationships beyond day-to-day work interactions. As a result, social events are highly impactful on workplace culture, but not only that, they have a more meaningful impact on employee retention than compensation. The good news is that companies can host virtual, or in-person events with relatively low investment but high impact. Partnering with, and funding, employee resource groups could be a creative way to create intersectional programming that also speaks to micro-cultures at the organization.
Moving toward actionable data
Right now, companies often gauge employee sentiment point-in-time, and in aggregate, making it hard to understand the drivers of culture. Ensuring a constant pulse on employee sentiment, and finding ways to identify and understand micro-cultures will be critical to determine what actions a company can take to move towards the culture their existing, and prospective, employees desire. At Joyn, we see that the top 3 drivers of a healthy culture are; Connection, Voice, Belonging. We’ll soon publish an article on what goes into these drivers and the research behind it.
Walking the walk
There’s been a long-time reality that companies demonstrate their commitment to diversity, equity, and inclusion but take only superficial action, not systematic changes. Making true changes to better support underrepresented groups and designing workplaces for them will no longer be optional, but required. The pandemic has set underrepresented groups back disproportionally affecting women, especially women of color, and working mothers, but no underrepresented groups have experienced true equity in the workplace. DEI investments often focused on representation by hiring more diverse talent but they failed to cultivate belonging, creating a revolving door for those entering the company.
We believe making culture a corporate responsibility ensures employees have an active seat at the table, a structure in place to maintain a constant pulse on the organization, and holds itself, and its leaders, accountable. These are key ingredients to create a sustainable and profitable company that meets employee expectations, creating an equitable future of work.
Joyn is committed to helping companies navigate this pivotal shift through our platform, our community, and partnerships with key platforms and organizations focused on equitable work environments.