As we move into 2025, creating a healthy workplace culture has never been more critical. Studies show that toxic culture is 12 times more likely than compensation to predict employee turnover and that it costs U.S. businesses alone nearly $225bn annually in hiring costs as a result of toxic culture. But often, statistics and research such as these aren’t enough to convince senior leaders of the importance of creating a great culture.
If you’re one of them, then consider instead the catastrophic impact on results and reputation. Allegations of toxic culture have been witnessed in almost every industry this year, including retail, technology, entertainment, the military and public services, to name but a few, all of which suffered reputational damage as a result.
Organisations must take proactive steps to prevent toxicity from taking root. It’s not enough to leave it to chance in the hope that it somehow creates itself; a strategy that many organisations employ, when it comes to their culture.
In my experience, in order to avoid a toxic culture and potentially a media story in 2025, organisations around the world, organisations in every sector, in every country around the world need to consider the following:
Don’t Pay Lip Service To Values
Values can’t just be words on a wall. They need to be actively demonstrated in daily operations and decision-making. Companies should involve employees in defining organisational values and regularly assess whether decisions align with these stated principles. They should also be used for hiring like-minded people too.
From the conversations I have with talented Millennial and GenZ employees around the world, I know that they are actively seeking out employers who practice what they preach. Leaders, therefore, must not only set the tone when it comes to role modeling these values, but also held accountable for their behavior when they don’t.
Invest in Management Training
The foundation of a healthy culture is emotionally intelligent managers who understand how to create the conditions for consistent success. This is an area that is woefully under invested in. Managers still tend to be promoted based on length of tenure or technical expertise, rather than their ability to be self-aware, involve employees in culture building activities, communicate empathetically and set expectations in a way that generates motivation.
Training for managers followed by regular feedback, and coaching can help to address these crucial capabilities.
Prioritise Psychological Safety
Creating an environment where people feel safe to speak up, take risks, and be themselves is crucial. Leaders should encourage healthy debate and treat mistakes as learning opportunities. When toxic behaviors emerge, they must be addressed immediately rather than be allowed to fester.
Psychological safety isn’t the latest buzzword or phrase, it describes an environment that is free of fear and that has a positive impact on the mental health of team members.
Create Clear Communication Channels
One of the biggest contributors to toxic culture is poor communication. Organisations need to establish multiple channels for employees to raise concerns without fear of retaliation. While anonymous feedback mechanisms and clear escalation procedures are important, what matters most is taking action when feedback is received and communicating progress back to employees.
Even better would be to provide managers with the training (see above) on how to provide immediate feedback, such that it generates a culture of continuous improvement.
Implement Regular Culture Check-ins
Don’t wait for problems to surface. Regular culture assessments should be conducted through quarterly business reviews that include culture metrics, employee pulse surveys, and exit interviews. External culture audits may be needed when significant issues arise in order to ensure that leaders investigate allegations correctly.
When the culture is defined, then check-ins will provide guidance on what needs to be done to return to its previous state. If it’s not defined, then the task list a review generates can be overwhelming and lead to culture procrastination.
The key to avoiding toxic culture in 2025 will be proactive investment in culture. Organisations can’t wait for problems to surface – they need to actively build and maintain the culture they want to see. You get the culture that you choose to build.
Remember, culture isn’t a one-time initiative or HR’s responsibility alone. It requires ongoing commitment from leadership, clear accountability at all levels, and regular evaluation and adjustment of approaches as needed. By implementing these strategies, organisations can create resilient cultures that support both business success and employee wellbeing in the evolving workplace of 2025 and beyond.
Written by Colin Ellis.
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