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It’s not you – it’s your toxic corporate culture

Working environments that contribute to higher levels of burnout and unhappiness among workers persist across industry.

By Alona Ferber

In 2021, Microsoft conducted a survey which found that 40 per cent of the global workforce was thinking of leaving their jobs. In the UK, according to a study by Personio and Opinium, also conducted last year, 38 per cent of employees were considering calling it quits within the next six months. The “Great Resignation” had arrived, and employers were scratching their heads as to how to deal with the oncoming tsunami of roles to fill.

The Great Resignation overlaps with another key pandemic-era trend: a spike in mental ill health. In the first year of Covid-19, global rates of anxiety and depression increased by 25 per cent, according to the World Health Organisation (WHO). Aside from Covid-specific triggers, such as social isolation, bereavement and fear of infection, a key contributing factor to higher levels of stress and poor well-being is, of course, work. We spend a third – or the commonly cited figure of around 90,000 hours – of our lives working and, as the economist Richard Layard points out, “when researchers study how happy people are during the day, work emerges as the least enjoyable activity on average. And the worst time of all is when employees are with their boss.” Data from Headspace Health (see pages 8-9) shows that nine out of ten UK staff suffered extreme to moderate stress over the past year.

And yet, recent research indicates that working environments that contribute to higher levels of stress and unhappiness among workers persist across industries, even as openness about mental health increases. A study in the MIT Sloan Management Review, which attempted to unpack the reasons behind the Great Resignation, found that the top reason for staff handing in their notice was poor corporate culture. “A toxic culture,” the study concluded, “is the biggest factor pushing employees out the door”.

The term “toxic culture” is hard to qualify, but the study identified factors that commonly create such working environments, including: failure to promote diversity, equity and inclusion; staff feeling disrespected; and unethical behaviour.

The researchers analysed 34 million online profiles of US workers who had left jobs between April and September 2021. They found that such working cultures were far more influential in the rate at which people leave a company than other key metrics, such as salary and company benefits – the statistics show that a toxic environment is “10.4 times more powerful than compensation in predicting a company’s attrition rate compared with [the industry standard]”. This was followed by job insecurity and reorganisation, which was 3.5 times more powerful. The failure to recognise employee performance was only 2.9 times greater a predictor.

Employers, aware of rising rates of mental illness, are putting in place support for staff, such as running activities for Mental Health Awareness Week and providing counselling services. According to data from the UK Employee Assistance Professionals Association (EAPA) from more than 3,000 employers (see pages 6-7), the pandemic led to a “huge spike” in the use of employee assistance programmes.

But if a working environment is part of the trigger for employee stress, there is a risk that, while valuable, such measures will do little to address underlying problems. Employers must interrogate the structures and working practices that are driving the Great Resignation, both for the sake of their own productivity and for their employees’ well-being.

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