Toxic Coworkers Are More Expensive Than Superstar Hires

Pushy, aggressive, and inappropriate behavior in the workplace—commonly described as toxic behavior—is widely recognized as harmful to morale. New research from Harvard Business School puts a precise dollar figure on just how damaging these employees can be.

A November 16 working paper analyzing data from more than 50,000 employees across 11 companies found that removing or avoiding a toxic employee delivers twice the financial benefit of hiring a top-performing “superstar” employee.

The researchers compared the expected gains from hiring an employee in the top 1 percent of productivity with the savings generated by firing—or never hiring—a toxic worker. Importantly, these savings are measured through induced turnover costs: the expense of replacing strong employees who choose to leave because they are exposed to a toxic colleague.

The analysis does not include additional downstream costs such as regulatory penalties, litigation expenses, reputational damage, or productivity losses. As a result, the true financial impact of toxic employees is likely understated.

For the purposes of the study, a toxic employee was defined as someone who causes harm either to the organization or to coworkers through behaviors such as theft, fraud, bullying, sexual harassment, or workplace violence.

“Most of the work in organization design and human resource management has been focused on what I would say are ‘positive outliers’—the really top performers,” said Dylan Minor, co-author of the study. “But we’ve all had personal experiences where we have a worker on the other side of the distribution.”

The implication for leaders is straightforward: while hiring exceptional talent matters, organizations may realize greater returns by proactively identifying, managing, and eliminating toxic behavior. Preventing harm often creates more value than pursuing marginal performance gains.

In short, vigilance against toxic employees is not just a cultural imperative—it is a sound financial strategy.