Toxic workplace culture costing UK economy £20.2 billion per year

The cost of poor company culture is a staggering £20.2 billion per year, according to research from HR software provider Breathe. The report ‘The Culture Economy 2021’, claims that almost a third (27 percent) of SME employees quit their job due to poor workplace culture, an increase of 6 percent from last year (21 percent).

The report also claims 9 in 10 (87 percent) SME employers say staff remained productive despite challenges faced in 2020. Only half (53 percent) of SMEs surveyed report introducing new measures relating to health and wellbeing of their teams, while a fifth of employees (21 percent) say their employer has not taken any steps to help them cope with the pandemic at all.

With a mental health pandemic on the horizon potentially spanning a decade and physical health anxieties increased by the virus, businesses are under pressure to introduce adequate safeguarding measures. What’s more, in view of the economy shrinking by 7.9 percent since before pre-lockdown, maintaining cashflow and revenue streams remains an urgent priority, and challenge, for business survival.

[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]”Trouble lies ahead for employers who lose sight of their duty of care.”[/perfectpullquote]

Jonathan Richards, CEO and Founder, Breathe comments: “The effects of lockdowns and extended isolation will be felt for a long time, so it’s never been more important for businesses to invest in building a culture that can survive the separation and offer support where it is sorely needed. Maintaining high productivity levels can only be possible if your people are looked after properly, otherwise this won’t be a sustainable outcome.

“Staff retention and churn issues despite the shrinking economy is surprising but proves people won’t stand for mistreatment in any scenario and will leave a job that doesn’t support them. We urgently need to see cultural changes happen to remedy this. Much more needs to be done in keeping people safe, mentally and physically, if at least from a work perspective.”

Key findings

• Culture curbed – only half (51 percent) of employees said they were satisfied with their employer’s efforts in maintaining positive remote culture during the pandemic. Almost a third (27 percent) quit due to culture, emphasising the importance of work community and impact on employee retention
• Cashflow concerns – almost half (46 percent) of SMEs cite their biggest worry as maintaining or increasing revenues in 2021, followed closely by managing the business while working from home (28 percent).
• Motivation and productivity challenges – according to almost a third (32 percent) of SME employees surveyed, staying motivated and productive in the next 12 months will be their biggest challenge.
• Managing staff sickness – A third (30 percent) of employers in the education sector report staff sickness as a huge challenge. This is unsurprising given close contact, crowded indoor working environments. 41 percent of healthcare employers say managing staff absences due to sickness was a significant challenge, again reflecting the close contact with the virus. Other industries struggling with managing sick leave were utilities (33 percent) and IT (33 percent).
• Career pivot – interestingly, almost a quarter (24 percent) of SME employees surveyed said they are not afraid to pursue a different career in a different industry, signalling a generational culture shift and cause for concern for some industries struggling with staff retention.

The report also explores physical support offerings, working from home attitudes, mental wellbeing practices and more.

Jonathan Richards added: “It’s clear we have witnessed a profound culture shift in 2020, with the majority of employees experiencing extreme pressures in not only work but their personal lives, too. Many are now living in their workplace and weakening boundaries between leisure and labour can only do harm. Businesses must recognise that work practices need to keep pace with the increased stress levels and more must be done to create a community, digital or physical, to support each other through these hard times.”

Rachel King, Marketing Director at Breathe commented: “SMEs and mid-market firms are in a strong position when it comes to adapting to uncertain market conditions. With our nimble nature, we can quickly implement new measures, and those relating to employee wellbeing should be top of the list. Business continuity wholly relies on people, so putting them first means demonstrating commitment to company culture and mental health safeguarding. We must remember that by staying connected we have achieved unbelievable things, but trouble lies ahead for employers who lose sight of their duty of care.”

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