Toxic Employees in the Workplace: Hidden Costs and How to Spot Them

In this original Cornerstone OnDemand research, we take on the question of whether one bad apple can really spoil the whole bunch when it comes to “toxic employees” in the workplace.

Leveraging econometric analysis of a big data set of approximately 250,000 hired employees, this report looks not only at the measurable costs of toxic behavior such as sexual harassment, theft and fraud, but also other, equally damaging and harder-to-measure costs. The report examines these indirect costs closely, looking particularly at the toll toxic employees take on co-workers, and concludes that these costs create an even larger financial burden on businesses than the direct impact of an employee’s misbehavior. Key report findings include:

Good employees are 54 percent more likely to quit when they work with a toxic employee, if the proportion of toxic employees on their team grows by as little as one to 20.
As toxic employees make their co-workers significantly more likely to leave, replacement costs rise greatly; hiring a single toxic employee into a team of twenty workers costs approximately $12,800, whereas hiring a non-toxic employee costs an employer an average of $4,000.
Toxic employees have a fairly negligible effect on the performance of their co-workers, which suggests that they have a stronger influence on stress and burnout than on day-to-day task completion.

The question is simple enough: can employers identify toxic employees before they’ve joined the organization to avoid their negative impact before it’s too late? The ability to identify and avoid candidates that indicate a high likelihood of toxic behavior before they cause havoc in the workplace is tremendously valuable, and the report highlights warning signs, including a link between toxic behaviors and an applicant’s dependability and customer service orientation.

Read Cornerstone’s latest research report to better understand the true cost that a toxic employee imposes on the organization, as well as the ways in which it may be possible to mitigate the effects of this behavior before it even occurs.