Attracting and retaining talent is hard work. For years, employers have tried to understand what helps companies attract and retain top performers. For the most part, they've found that companies with great financial outcomes almost always have happy employees. The research even shows that it's employee satisfaction that results in good performance, not the other way around.

However, this phenomenon has led many companies to confuse the difference between culture and perks. In an attempt to please and attract high level talent, companies are spending more money than ever on perks and benefits believing this to be the key to a great employee experience. Though the increase in company amenities, trips, and material rewards can temporarily boost employee satisfaction, it does little to address any real underlying issues that could be eroding your culture.

For example, if your company offers great amenities but is experiencing low performance or high turnover, then you may want to ask yourself, "Why is this happening?" Is it because you need to allocate more of your budget towards perks and benefits, or because your culture has a toxic behavior problem that you need to confront? In this article, we’ll address the increase in three damaging workplace behaviors that perks cannot ultimately address, and the steep costs associated with each.

Why Employee Experience Starts with Culture, Not Perks

1. Bigotry is causing greater levels of absenteeism

• What’s happening: As the social climate becomes more divided, bigotry and sexism are on the rise. In fact, 46% of surveyed Americans believe workplace relations have worsened in the last few years. Today, we’re seeing this manifest in multiple areas of the workplace, from office conversations to one-on-one meetings, and sometimes even on public social media.
• What bigotry costs you: Companies that ignore the clear warning signs of bigotry and bullying in their screening, interviewing, and monitoring processes significantly increase their hiring risk. In addition to the costs of reduced productivity, brand risk, legal risk, and more, workplace bullying costs a company of 5,000 an annual $2 million on absenteeism alone.

2. Sexual harassment lawsuits are through the roof

• What’s happening: Company events and internal chat platforms are becoming more common.  While they help create more authentic conversations between employees, they can also blur the line between personal and professional and lead employees to cross the line more frequently. As those affected by sexual harassment continue to speak up, the total amount awarded for EEOC sexual harassment lawsuits has increased 47% over the last year.
• What sexism costs you: Harassment has a host of impacts on absenteeism, productivity, and turnover, and is estimated to cost the typical Fortune 500 company up to $14 million per year. Further, personnel costs related to handling claims are substantial. Organizations spend an average of 275 days handling harassment claims, and those that result in settlements average anywhere between $125,000 and $250,000 per person.

3. Workplace violence continues to grow

• What’s happening: Despite the increase in employee perks, the level of threatening behavior, verbal abuse, and physical attacks in companies is growing. In the last decade, the number of reported incidents has grown to over 1 million per year and the annual comprehensive cost of businesses has grown to $130 billion per year.
• What violence costs you: Violence ravages the workplace. Companies experience up to a 50% drop in productivity and 40% rate of turnover by those affected for months following an incident, and collectively lose over $55 million per year due to violence-related absenteeism alone. The legal costs of workplace violence are substantial as well. For individual companies, the average out of court settlement for a workplace violence lawsuit approaches $500,000, and the cost of negligence lawsuits related to workplace violence is now nearly $2 million per suit.

As toxic behavior becomes more frequent and more expensive, employers must recognize that people are leaving not because the perks weren’t good enough but because the foundations weren’t built. As people increasingly seek workplaces where they can feel respected and thrive professionally, the first questions employees ask will involve not what they’ll get, but who they’ll work with. If you want to ensure your company stays at the top, a culture that’s free of toxic behavior has to come first.

To learn more about the range of behaviors that can derail enterprise performance, talk to us about how to identify toxic employees at scale. Alternatively, you can subscribe to our newsletter to get the latest research on toxic behavior and risk management delivered straight to your inbox.

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