The Hidden Costs of Workplace Toxicity and How It’s Hurting Your Organization

A toxic workplace culture may be costing your organization dearly. When workplace toxicity levels rise, so do absenteeism, turnover, and stress-related illnesses. Your employees who haven’t left are more likely to be disengaged from their work, leading to less innovation and productivity.

Eliminating workplace toxicity is a must for any organization that wants to boost productivity, profits, and employee engagement.

What Is Workplace Toxicity?

A toxic workplace is “a work environment characterized by harmful behaviors, attitudes, and practices that negatively impact your well-being, morale, and productivity,” according to a 2025 iHire survey report. The same report found three of four employee respondents had experienced a toxic workplace.

These employees identified poor leadership as the largest factor driving workplace toxicity. Poor communication, unfair treatment, and high stress levels also figured prominently when employees were asked what made their workplace toxic.

How Can Toxicity in the Workplace Impact Your Bottom Line?

Workplace toxicity has an insidious effect on employee morale, which directly impacts your bottom line. When employee engagement suffers, you’re more likely to experience high rates of employee turnover, less productivity, and excessive absenteeism. These three factors can act as a major drag on any company’s growth.

The High Costs of Employee Turnover

According to the iHire survey, more than half of all employees have quit a job because of workplace toxicity. High turnover rates can cost your company millions of dollars per year. That’s because the cost of replacing an employee typically runs from one-half to twice their annual salary. That means replacing just five employees earning $100,000 each could cause a seven-figure loss.

Productivity Loss Due to Workplace Toxicity

Workplace toxicity has a major dampening effect on productivity. Stressed-out employees are less likely to be engaged and focused on their jobs. When workers don’t feel valued and recognized, they’re less likely to go above and beyond. That’s why it’s so important to foster good employer-employee relationships.

Creating and maintaining a workplace culture where employee contributions are recognized, work-life balance is respected, and there is zero tolerance for bullying behavior will lead to happier and more productive employees.

Sicker Employees

Over 60% of employees in the iHire survey said they’ve experienced stress-related health issues because of workplace toxicity. Common reasons included unreasonable workloads and poor work/life balance. Nearly 60% of respondents also said their workplace offered little to no support for employee mental health or well-being.

Ignoring your employees’ mental health struggles can lead to huge hidden costs. One study estimated that untreated depression is responsible for a $210.5 billion loss each year due to productivity loss, absenteeism, and medical expenses. 

High levels of stress can lead to other health problems, such as high blood pressure, heart disease, stroke, obesity, and diabetes. Toxic workplaces that foster unhealthy levels of stress may face substantial losses from higher health insurance premiums, days lost to medical appointments and procedures, and lower productivity due to physical health issues.

How to Recognize a Toxic Workplace Culture

The first step to combatting a toxic workplace culture is recognizing that it exists in the first place. Unfortunately, employers are far less likely to experience workplace toxicity compared to employees. According to the iHire survey, roughly 83% of employers are very or somewhat positive about their organization’s environment. Just 45% of employees had the same response.

The best way to bridge this disconnect is to foster a culture of feedback by promoting transparency and psychological safety. Practice asking specific, open-ended questions when soliciting input from your employees. For example, instead of saying, “Is there anything we could do better around here?” consider asking, “What’s one way I could better support you in your current role?”

It’s also a good idea to provide your employees the opportunity to give truly anonymous feedback. Whether through an old-fashioned suggestion box or an anonymized Google Form, let your workers say what’s on their minds without fear of reprisal. 

Ready to Connect With Qualified, Career-Focused Talent?

Create Your Account Today

Start Hiring

We Value Your Privacy

Three Steps to Eliminate Negativity in the Workplace

Here are three steps any company should take to address workplace toxicity. 

1. Foster a Culture of Accountability

Workplace toxicity can come from anywhere. That means you need to foster a culture where employees at all levels hold themselves and each other accountable for their behavior. That includes common toxic workplace behaviors, such as passive-aggressive statements and actions, bullying, and frequent arguments. It also means breaking up cliques and exclusionary groups.

It’s important to make your employees aware that if they see something, they should say something. Accountability starts with each of us.

2. Listen to Your Employees

Toxic behavior often festers far too long because employers don’t listen to their employees. And listening shouldn’t be a one-off event. Organizations of all sizes should have systems in place that allow employees to voice their concerns on a regular basis.

From weekly one-on-ones to skip-level meetings to companywide surveys, give your employees multiple avenues to voice their discontent. 

3. Focus on the Long Term

Much of workplace toxicity is the result of an unhealthy focus on short-term results. That’s one of the most important conclusions of the iHire survey, which found that unmanageable workloads, lack of work/life balance support, and unrealistic deadlines were leading causes of employee burnout. 

Short-sighted employers may think they’re getting the better end of the deal by driving their employees to work at an unhealthy pace. But high stress levels and burnout inevitably lead to the massive costs described earlier. Maintaining a manageable workload will lead to a healthier – and more productive – workplace. 

Boost Profits and Productivity With a Positive Workplace Culture

Fostering a positive workplace environment will reduce costly turnover, enhance productivity, and increase profits. For more insights, check out iHire’s 2025 Toxic Workplace Trends Report, a comprehensive guide to uncovering toxicity in the workplace.