Many of us have experienced toxic behavior in the workplace. Though many of us use stories and anecdotes to illustrate and process our experiences, few of us have had access to quantifiable data when attempting to communicate the importance of managing these behaviors at work. What are the full costs of toxic workplace behavior? To help organizations get clarity around the value of reducing toxic behavior in the workplace, we’ve anonymized and aggregated a trove of data around this question, and taken it upon ourselves to use this data to provide meaningful insight for companies around the world.
Last year, we kick-started this conversation by publishing a study called "The Cost of a Toxic Hire.” It was a breakthrough resource showing how much money companies were losing to the turnover and absenteeism caused by toxic employees. While the response was overwhelmingly positive, we recognized that companies were losing far more than $1.2 million per year. We soon found even more information about how much market cap companies were losing to toxic behavior, and the measures that boards are now taking to protect their companies from the fallout of insidious workplace events.
Earlier this year, we launched the Toxic Employee Handbook with Dr. John Sullivan, a renowned influencer in the world of talent management. This newly released handbook covered over 40 distinct categories of damage caused by toxic employees and offered new tools to start building a business case for formal toxic behavior reduction efforts. Again, the response was overwhelmingly positive. More and more companies are looking to understand the full extent of damages that toxic employees inflict on our businesses and to discover ways they can identify them before they harm our organizations.
Still, we get questions about the value of certain preventative methods. As the leading provider of online background screening, we’ve worked with hundreds of clients to develop strategies to identify workplace behaviors ranging from subtle bigotry to violent threats. Even though more than 70% of employers today research candidates on social media before hiring them, we’re often asked: why should I look online to keep my company safe from bad hires?
There’s no underselling how important professors are in our society. We rely on them to shape the next generation and instill the knowledge students need as they prepare to head into the workforce. However, it’s becoming clear that when they’re not careful, their personal biases can overshadow the education their institutions had promised and create a toxic environment for students.
Millions are talking about a professor and administrator at Duke University who recently sent an email asking students not to speak Chinese. The incident, circulated by Bloomberg, The New York Times, and the BBC, has spurred discussions worldwide around bias in higher education. It has left people wondering what colleges are doing to protect students from individual bias and harassment, and just how much a professor or administrator can damage their institution’s brand through the things they say.
Duke will likely withstand this PR incident. However, many institutions see much larger repercussions when a scandal breaks loose. A paper from Harvard Business School shows that colleges that receive long-form news coverage about a high-profile scandal can experience a 10% drop in applications for over two consecutive years. This is equivalent to losing 10 ranks in the U.S. News and World Report college rankings. As a college or university, your reputation impacts both the quality and quantity of donations, enrollment, and funding. Though your school’s overall reputation is made up of many components, it hinges largely upon the administrators and faculty members you hire to build your image.
Socially responsible marketing is on the rise. If the recent consumer controversy over Gillette’s ad on masculinity wasn’t enough, everyone in the business world is also talking about the new marketing trend. In the last 12 months alone, Deloitte, McKinsey, and the World Economic Forum in Davos have all noted that more and more consumers are looking to businesses to take stances on important social issues. The numbers are talking as well: 66% of consumers will pay more for products from companies committed to positive social impact. With millennials, this number is even higher. 73% will pay more for sustainable products, and 81% expect companies to take a public stance on social issues.
That means that there is an enormous opportunity at hand. Brands that can properly connect their brand with relevant social causes have grown their audience and revenue by as much as 200%. However, you can spend millions on marketing in hopes of winning favor with the public without realizing that it takes as little as one person to erode the goodwill you’ve built. While socially conscious marketing is helpful and even necessary today, a single revelation of toxic employee behavior can render all of those marketing efforts fruitless. Yes, the numbers say that socially conscious marketing pays dividends—but take a closer look and you’ll see the costs of toxic behavior are even greater.
For every headline we see about workplace harassment or bigotry, it’s easy to forget that there are hundreds of stories that never surface. Today’s blog comes from an anonymous employee who recounts an instance of systematic, predatory behavior at one of largest tech companies in America. Their story illustrates the discomfort and trauma that employees (often women) face when toxic behavior is present, and explains why companies must take new approaches to preventing sexual harassment in the workplace.
I am grateful to have had so many positive experiences in the workplace. I worked at my previous company for six and a half years, during a time of tremendous growth in which the company grew from 3,000 to 25,000 employees and became one of the most highly recognized brands in the world. Throughout this time, the focus on culture and community was apparent from the top down and instilled a genuine feeling of family amongst my colleagues and myself. Even after leaving the company a year and a half ago, I still feel it. Four people on my former team became some of my best friends, and I think of my former colleagues as extended family.
So when I discovered that more than a dozen young women – my extended family members – all experienced the predatory behavior of another male colleague through a systematic and premeditated series of inappropriate conversations via an internal company chat tool, I was furious and heartbroken. I discovered this one night at our company’s annual sales conference, where thousands of people in my work family gather each year to connect, learn and grow together. After one of the sessions, I was catching up with friends from other offices when a teammate shared a story about his team dinner from the previous evening…
The last 18 months have been transformative for the way companies do business. As people pushed corporations to adopt new policies through movements such as the global walkouts at Google, companies that were once driven purely by sales and revenue are starting to change. They are beginning to realize that they will need to take a stance on issues such as harassment and bigotry to remain in good standing. In an age where authenticity and accountability are key, empathy has become a driving force for business success.
However, as sexual harassment lawsuits and global anger reach record highs, and headline after headline continues to rock corporations across industries, the fact remains that companies must actively prove to consumers and employees that they care.
Today, employees and customers look to companies to understand where they stand on major social issues. Many businesses have responded to this trend with well-intentioned PR statements around their corporate culture and policy. However, the bar today has been set far higher than before. Customers and employees often feel that companies can’t gauge their emotions and are increasingly frustrated by well-meaning statements with little follow through. That means that to assuage consumer anger and combat a growing possibility of reputational loss, companies need to demonstrate emotional intelligence, not just a political stance.
In the age of social media, anyone can be a journalist. In a recent article about bad employee behaviors gone viral, Erik Deutsch of the LA-based ExcelPR group said that the ability to post anything in real time and make it accessible to the entire world has forced companies to rethink risk management. “If someone was mistreated in a store 15 years ago, they might make a scene and tell their friends, and that would be it,” he says. “Now, they post it online and it can become a sensation.”
As this year’s headlines around workplace harassment, bigotry, and violence suggest, individual departments are struggling to mitigate people-based risk on their own. HR is overwhelmed with paperwork. PR is scrambling to react quickly enough to control the narrative when bad news breaks. Security teams are often ill-prepared to handle allegations that boil down to “he said, she said” disputes. IT is asked to manage a growing set of channels not necessarily optimized for security. The new reality of people risk is exposing major cracks in traditional organizational structures. Unless companies adopt new approaches to people risk management (PRM), it will be increasingly difficult to stay ahead of potential threats.
So what’s on the horizon for people risk management? Moving forward, we will see significant shifts in structure, process, and technology to promote deeper collaboration between HR, risk, digital communications, and IT. While organizations will take a variety of approaches to mitigate these new threats, we predict three general trends…
In July 2018, Uber announced that it would begin conducting continuous background checks on their drivers. Although the company has had a difficult history when it comes to culture issues and passenger safety, this particular decision moved Uber ahead of the curve. It showed they understood that whether caused by executives, employees, or independent contractors, enterprise risk stems from individuals whose behaviors can change over time—and that after years of negative press and internal shocks, they were finally doing something about it.
Like Uber, many companies today are starting to recognize the limits of traditional background checks and looking to recurring, real-time screening solutions to manage employee risk. Nearly half of employers today are scrambling for ways to identify high risk behaviors in their employees, but according to the Society for Human Resource Management, only 11 percent of companies formally screen past the initial hire. This means that nearly 9 in 10 companies are depending on pre-hire background checks to keep their organizations out of the headlines.
In this blog, we’ll discuss how enterprise risk has changed in the last decade and highlight why companies today must extend their screening practices beyond the initial hire.
Earlier this year, The Washington Post announced that the Virginia criminal database has been missing over 750,000 cases, including over 300 murder convictions, 1,300 rape convictions, and 4,600 convictions for felony assault. That means that over the last decade, thousands of firearm purchases, new hires, and crime scene investigations were completed without this information. The story raised hairs about how the background check process breaks down and left us wondering how so many records are falling through the cracks.
This incident reveals a larger point about the broken nature of our systems and processes for vetting—and as rates of bigotry, violence, and other high-risk behaviors grow to record highs, businesses are some of the ones paying the biggest price. Why are companies having a harder time screening and vetting people today, and what can they do to stay ahead of the risks?
In this blog, we’ll discuss the why the current system of background checks is broken, how makeshift methods can expose your company to legal risks, and how automated online screening helps fills the gaps for a more complete and effective investigation.
Each year, the Oxford English Dictionary selects a Word of the Year based on its ability to reflect the ethos of that year and its potential as a term of lasting cultural significance. Though previous words, such as “selfie” and “post-truth,” have revolved around politics or pop culture, the Word of the Year for 2018 could not be more relevant to business. After narrowing all of 2018 down to a few phrases and going through rounds of debate, Oxford has chosen a word that speaks to what we’ve gone through this last year and, more importantly, where we need to go. The Word of the Year 2018 is toxic.
With one word, Oxford called out the elephant in the room: toxic behavior has infiltrated the business world. Though initially used to describe the substances and waste generated by mass industry, more and more people in the world today use ‘toxic’ to describe workplace afflictions. As people in 2018 demanded safe and welcoming workplaces, denounced company leaders for enabling harassment, and took to protest in the Google walkouts, the world became awake to toxic work environments, toxic masculinity, and toxic culture. Regardless of fault, corporations have become a focal point of harmful behavior, and people are tired of it.
According to the Gallup 2018 Global Emotions Report, fewer and fewer people today are well-rested, respected, or finding enjoyment in daily life. Instead, they’re reporting record-high levels of worry, sadness, stress, and anger. As headline after headline hits businesses for the decisions they’ve made or the cultures they’ve enabled to fester, it’s important to recognize the financial and reputational costs of bad business. But to avoid future financial and reputational fallout, business leaders need to recognize the sheer anger emerging from consumers and workers, and the ways they communicate this through turnover, legal actions, and protest…