Study: The Extreme Cost of Hiring a Toxic Employee

Harmful employees might be hiding out in your office. Here's why you should deal with them ASAP.

By: Laura Montini, Reporter, Inc.

There are all sorts of good reasons to not want problematic and unpleasant individuals working for you. This might be the best one, though: Your most valued employees are 54 percent more likely to quit when a toxic individual makes his or her way onto their team.

That's according to research from Cornerstone OnDemand, creator of talent management applications. The company looked at data from 63,000 hired employees, generated by Cornerstone's users. Across that sample, three to five percent of employees were fired for toxic behavior.

Toxic behavior was defined as misconduct, workplace violence, drug or alcohol abuse, sexual harassment, or fraud.

Surprisingly, the study found that toxic workers did not have a noticeable effect on their colleagues' work performance. This suggests that pernicious workers more directly impact others' stress levels than they do productivity, according to the report.

Here are some other findings from the study:

If the ratio of toxic to good employees on a team is just 1:20, good employees become 54 percent more likely to leave.

Hiring a single toxic employee onto a team of 20 workers costs approximately $12,800--which, in addition to the cost of onboarding that employee, represents the costs associated with finding and onboarding new employees to replace those who quit.

Poor attendance, dependability, and a lack of willingness to help others are most predictive of toxic behavior.

These characteristics can help you identify a wolf once he's in the hen house, but how can you make sure that never happens to begin with?

"We found that toxic employees responded in unique ways to some of the assessment content," Cornerstone OnDemand chief analytics officer Michael Housman says. "They were significantly more overconfident than your typical job applicant."

Specifically, applicants who were extremely overconfident about their technical qualifications for a job were 43 percent more likely to display toxic behavior.

If a current employee has already violated company policy in a major way, proceed with caution, advises Cornerstone OnDemand vice president of talent Kimberly Cassady. Depending on how severe the incident was, you might be able to salvage your relationship with him or her by setting up an official documented performance improvement plan.

Make sure, though, to tend to your good employees who've been negatively affected, she says.

"When dealing with an issue, managers should be as transparent as possible, acknowledging an incident or situation and the employees affected," Cassady says. "Transparency from the start can make a huge difference in how employees react."

To access the full-length article, click here.