6 Signs of Toxic Company Culture

BUSINESS icon Giles Cadman April 5, 2018

Culture is the word of the moment and for good reason. When you're an entrepreneur or new business owner, the culture of your company is an incredibly important factor in its success. A negative culture will affect your employee's productivity, health, and will cost you more money than you think.

According to a recent working paper from Harvard Business School, toxic workers can cost your business more than even bringing in a hyper-productive "superstar" employee. The working paper calculated a toxic employee can cost a company $12,500 in turnover costs, whereas onboarding a superstar employee will only add about $5,300 to your company's bottom line.

With this much money on the line, it's clear that a toxic culture is something that needs to be avoided, especially when dealing with bootstrapped startups. Here are a few early signs of a bad company culture and how you can fix it.

1. Your company is experiencing rapid growth

Ask any business owner, and of course they'll say growth is a good thing. However, it's the number one killer of culture in startups. If you grow too fast, the culture of your company will suffer greatly.

If your employees are constantly stressed out and hardly raising their heads at work "“ let alone leaving their desk to eat lunch "“ it's a sure sign that rapid growth has sucked the fun out of your company. It's the "too busy" complex and it will affect your staff in the worst ways.

So what's the fix? Slow down a little. I know that as a business owner this isn't what you want to hear, but if slowing down means saving your culture, then you need to hit the brakes.

 2. Your employees are unmotivated

Unmotivated employees are toxic employees. They speak about the company negatively, infect others with their constant complaints, and they have no desire to move up. These people will spend more time avoiding work than actually doing it.

The quick fix is to nip this kind of behavior in the bud and let this person go. It may be difficult because the unmotivated worker may actually be exceptionally smart, but it's important to note that this attitude spreads easily. It could be catastrophic to have them around your new hires.

Letting people go isn't fun. But unmotivated employees can end up costing you a lot of money, so it's best to deal with them quickly and quietly.

3. There is a lack of communication

If no one is coming to you with problems, this is a red flag. If no one is talking, then it shows that your employees don't feel like their opinions are being valued.

The best way to get your employees to be more open and talk about their issues is to be open yourself, and let others follow suit. Ensure that you have an open-door policy, and let your employees know they can come to you without fear of retribution.

4. There is way too much communication

The flip side of too little communication is too much communication. There’s a difference between communication and gossip and it must be adressed. Speaking negatively, complaining and gossiping will lead to a high company turnover and will lower productivity levels.

Introduce a zero tolerance for gossip policy. No matter how tempting it may be to participate, you must refrain. As the CEO of your company, people will let you set the standard and act accordingly.

5. New ideas are constantly shot down

This is especially true when hiring millennials, and soon, Generation Z. The younger employees in your company want to make a difference and the traditional 9-5 style of work doesn't typically appeal to them.

It's crushing for new employees when an employer won't listen to their ideas. The worst thing you can do is tell a millennial worker that "this is the way it's always been done." They have entered the workforce with the will and smarts to shake things up and their new ideas at least need to be considered. Not letting them express themselves will make them disengaged with your company and could influence them to move on.

Hold meetings and let people bring up new ideas. Seriously consider your employees' ideas and don't brush them off because they are young or new.

6. The health of your employees is suffering

The health of your employees can be seen as a reflection of their happiness at your company. Some things cannot be blamed on work and your employees need to take responsibility for their own health. However, stress is a leading cause of sickness and general unhealthiness.

If your employees are constantly sick or seemingly too lazy to take care of themselves, there may be something wrong with your company culture.

There are some things you can to do improve the health of your employees. Don't let them eat at their lunch at their desk and encourage them to go for frequent walks. Introduce fun, stress-relieving activities such as monthly yoga classes, and be sure to check in with your team’s stress levels.

By introducing new and fun ways to be healthy in the office, you should see significant improvements in the well-being of your employees.

Culture is important. However, as you grow, you need to be paying close attention to it because it will help you remain a successful company in the long run. Remember that companies are made up of people, and your people is what makes your culture. Watch for these signs and act on them before it’s too late!

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