Small Business Guide to Avoiding a Toxic Workplace

A toxic workplace can make or break your small business. Here’s what SMBs need to know.


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Is your organization suffering from low productivity and morale, high turnover rates, and poor communication? The problem could be a toxic workplace.

Toxic or harmful work environments are hardly intentional. But if employees and managers aren’t working in tandem and negative behaviors reprimanded, it’s easy for any workplace to become problematic.

The fact is, your workplace environment can make or break your business. In one survey. 58% of employees stated they left because of poor management. And 25% of them don’t feel like they can discuss their opinions openly at work.

But what causes toxicity in the workplace? In this article, we’ve listed out signs to look for and how to create a more inclusive and healthy work environment.

What is a toxic workplace?

A toxic workplace is an environment that encourages in-fighting and internal competition. This destructive atmosphere often results in low morale, plummeting productivity, and mistrust among colleagues and management.

This kind of workplace fosters negative behaviors, and often these harmful traits are found throughout the organization — from new hires to management. But it’s not all dysfunction and having a bad attitude. Toxic behaviors can also stem from more subtle prejudices, such as racism, sexism, and xenophobia.

How to spot toxic behaviors

Several signs point to a toxic workplace or that an environment that is becoming toxic. Some of those are:

  • Poor communication
  • Passive-aggressive responses
  • Cliques and gossip
  • Micromanagement
  • Burnout employees and management
  • Few or no advancement opportunities
  • High turnover or absenteeism
  • No work-life balance
  • Poor feedback loops
  • Employee discrimination

Toxic behaviors can also link back to other difficult mindsets. This includes racism, sexism, and other forms of discrimination. To make matters worse, if these behaviors are allowed to fester, they can influence policies, promotions, and retention. Notice an exceptionally high turnover rate from your diverse employees or notice that you have nearly no diverse hires. There might be more significant issues than just negative behavior in the workplace.

A toxic workplace is often hostile, competitive, and challenging to manage. But if you can identify the indicators of a toxic workplace and find out where they are coming from, it becomes possible to handle the issue.

What do employees want from their workplace?

Ultimately, employees want a workplace that is far more inclusive, collaborative, and communicative. They want chances to advance or grow professionally. And more often than not, employees want their company to take a stand on critical issues — including racism and discrimination.

Reviewing policies and procedures can help to understand what employees want more than anything else. And the list is fairly simple:

  • Respect
  • Regular feedback
  • Trust and responsibility
  • Clear expectations
  • Opportunities for learning and growth
  • Recognition for good work

These are simple concepts but sometimes difficult to enact. Generally, you’ll want to structure your organization so that feedback is regular, communication is direct and clear, and that growth opportunities are accessible to everyone.

You’ll want to structure your organization so that feedback is regular, communication is direct and clear, and that growth opportunities are accessible to everyone.

How to avoid a toxic workplace

The good news is that there are many everyday strategies you can implement to avoid creating a toxic workplace. And you can use the same approaches to correct issues if you have noticed a problem.

Common ways to reduce toxicity in the workplace are:

  • Ask yourself the right questions
  • Give regular recognition
  • Do not play favorites
  • Encourage team mentorship
  • Create regular feedback loops
  • Provide employees a chance to share ideas without penalizing them
  • Ensure everyone has access to learning materials
  • Set up clear communication channels
  • Create a thorough onboarding and training process for new hires
  • Review your hiring and recruitment strategies to weed out potentially harmful influences
  • Invest in team-building activities
  • Help employees set a work-life balance
  • Offer benefits that can help employees improve their quality of life
  • Include a non-discrimination policy in the employee handbook and follow it

Overall, you want to be sure that your employees feel comfortable being themselves at work. That way, they can focus on improving their own performance and build long-lasting relationships with their colleagues.

Learn more about creating an inclusive workplace

Creating an inclusive and non-toxic workplace can take some time, but it’s worth the effort. To learn more about handling challenges like discrimination and other social issues, check out our free HR Guide to Addressing Social Issues and Racism.


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