Are toxic workers more cost effective than superstars?

Most organizations devote significant time and resources to identifying and retaining top performers, yet comparatively little attention is paid to avoiding toxic workers. New research suggests this imbalance may be costly. A study published by Harvard Business School finds that firms gain more value by avoiding or neutralizing toxic employees than by hiring superstar performers.

Authored by Dylan Minor of Harvard Business School and Michael Housman, Chief Analytics Officer at Cornerstone OnDemand, the study analyzed data from 58,542 workers. Toxicity was defined using the most severe cases—employees terminated for misconduct such as harassment, fraud, or serious policy violations. Roughly 5 percent of workers fell into this category over time.

The results are striking. The presence of a single toxic worker generates an estimated $12,489 in induced turnover costs, driven largely by increased departures among coworkers. These estimates exclude additional expenses such as litigation, regulatory penalties, morale damage, and productivity losses during replacement onboarding.

By contrast, hiring a top 1 percent “superstar” employee yields an estimated $5,303 in cost savings. Even under generous assumptions, avoiding or replacing a toxic worker delivers more than twice the economic benefit.

“Assuming it is no more costly to avoid a toxic worker (or replace them with an average worker) than it is to find, hire, and retain a superstar, it is also more profitable to do the former over the latter.”

The research also identifies traits associated with higher toxicity risk. These include elevated confidence, strong self-regard, and—counterintuitively—a rigid belief that rules must always be followed. Candidates expressing absolute rule adherence showed approximately a 25 percent higher risk of toxic behavior.

Toxicity is also contagious. Employees exposed to toxic colleagues face a 46 percent higher likelihood of engaging in toxic behavior themselves, compounding organizational harm.

Importantly, toxic workers often appear productive, at least in terms of output quantity. However, the study finds their work quality tends to be lower. High-quality, high-speed performers are far more common than low-quality, high-speed workers—yet managers may mistakenly retain toxic employees due to superficial productivity signals.

The broader lesson is that productivity alone is an incomplete hiring criterion. Managers are urged to evaluate candidates multidimensionally, weighing both output and potential harm. When toxicity and productivity are considered together, many hires that appear attractive on performance metrics alone no longer make economic sense.

In short, reducing negative impact often creates more value than chasing exceptional upside. Avoiding toxic workers is not just an ethical imperative—it is a sound profit-maximizing strategy.