The Economic Cost of Toxic Behavior In the Workplace

What’s the cost of a problematic hire? We all know that toxic workplace behavior can ruin your workday, but judging by the numbers, is it something that HR Managers should really be concerned about?  

The Cost of Avoiding Bad Hires

The answer is absolutely yes.  Multiple recent surveys and studies all point in the same direction: “one bad apple” might actually be costing you thousands of dollars.  Here’s the big one: according to a Harvard Business School paper, taking active steps to avoid toxic hires has twice the return on investment than hiring “superstar workers”.  According to the World Economic Forum, which helped break the story,

While a top 1 percent worker might return $5,303 in cost savings to a company through increased output, avoiding a toxic hire will net an estimated $12,489, the study said. That figure does not include savings from sidestepping litigation, regulatory penalties, or decreased productivity as a result of low morale.

That’s just a simple ROI; according to SHRM’s 2016 Human Capital Benchmarking Report, the investments that companies make in hiring a single new employee are significant--to the tune of $4,129 per hire.  That’s worth it if you think you’ve made a good long-term investment. However, in its annual report, the Bureau of Labor Statistics reported the average job tenure is, overall, only 4.8 years, and it’s much shorter when you just look at Millennials. Now the biggest slice of the US labor force, Millennials spend a mere average of 2.8 years at a single job before moving onto the next.  A similar statistic points to companies spending $223 billion just to keep up with the turnover rate.  

The Human Cost

But what does that have to do with toxic behavior? Well, the numbers don’t look great there either. A recent SHRM survey indicated that one in five people leave their job due to workplace culture, and roughly half of employees have at least contemplated leaving their current organization.  That tracks with a similar survey conducted by Blind, an anonymous chat platform for tech workers, that revealed that out of 9,000 employees working in the tech industry, 52% of them believed that their workplace was toxic.

Is this the new normal? Possibly, and it’s cost companies billions.  Businesses of any size can’t afford to have a lackadaisical or inefficient hiring process.  Toxic hires don’t just slow their own productivity, otherwise you’d just have an accountability problem. They suck the energy out of their peers and waste their supervisors’ time by triggering a lengthy disciplinary process.  

What Employers Can Do About It

To extrapolate from the first statistic, it is much more cost-effective to sniff out toxic hires at the beginning of the employee lifecycle than it is to roll the dice on unknown behavior and then risk suffering through the disciplinary process. To that end, the most efficient solution may lie in streamlining your screening process. Learn more about how social media screening gives you actionable insights into your candidates’ online presence by requesting a sample report today. Because toxic behavior isn’t just in the workplace; according to Pew Research, over 70% of adults have witnessed harassment online, and at least 40% have been victims of it.  Chances are, if it shows up online, it’s going to show up in real life--meaning your workplace.  Now more than ever, that’s not a risk businesses can take.