Having a Toxic Worker Costs Employers Minimum of $12,500

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By Martin Berman-Gorvine

Jan. 6 — Having a “toxic worker” on your team costs $12,489 in “induced turnover” alone, as frustrated co-workers flee.

And that figure “does not include other potential costs, such as litigation, regulatory penalty and reduced employee morale,” researchers Michael Housman, chief analytics officer of talent management company Cornerstone OnDemand, and Dylan Minor of Harvard Business School wrote in a November 2015 paper, “Toxic Workers,”for Harvard Business School. “Also not included are the secondary costs of turnover that come from a new worker's learning curve: a time of lower productivity precedes a return to higher productivity,” they wrote.

Drawing on “a large novel dataset of over 50,000 workers across 11 different firms,” Housman and Minor found that “toxic workers seem to induce others to be toxic,” and that “although toxic workers are quicker than the average worker, they are not necessarily more productive in a quality-adjusted sense.” They also determined that “toxic workers originate both as a function of preexisting characteristics and of the environment in which they work.”

Confidence Can Be Costly

Toxic workers may be over-confident. Minor said in a Jan. 4 e-mail to Bloomberg BNA that “each unit increase in confidence results in a worker adding roughly $122 to expected profit through increased productivity. However, that same increase in confidence results in a worker that is expected to cost the firm over $1,300 from toxic behavior. In sum, hiring a more confident worker loses the firm over $1,000 in expected profit, per worker.”

Asked how to avoid hiring toxic workers, and how to deal with one who sneaks aboard your team despite all precautions, Minor responded that managers “should hire multi-dimensionally: it's important not only to hire and reward based on productivity, but also based on citizenship. For example, greater confidence predicts increased productivity. However, greater confidence also predicts greater likelihood of becoming toxic.” This more complicated approach, he said, “can improve organizational performance and make the workplace a better place for all of those involved.”

Many Types of Toxicity

Ilona Jerabek, president and chief executive officer of Montreal-based PsychTests AIM Inc., who was not involved with the study, listed several types of toxic employees in a Jan. 6 e-mail to Bloomberg BNA:

• “Perfectionists or nitpicky, highly critical employees.” These are a problem since “when their criticism or unreasonable standards are directed toward others, they can affect team morale and frustrate their teammates,” while inner-directed perfectionists “will find themselves stuck in a vicious cycle in which nothing they do is good enough,” she said;
• “Whiners or complainers”;
• “Alpha males or females” who “have a tendency to take control of situations, even when they are not asked to” and in addition “find it hard to ask for help and don't take criticism well”;
• “Slackers”;
• “Rule-breakers”;
• “Manipulators, Machiavellian types or bullies”;
• “Controlling types, micromanagers”; and
• “Gossipers or rumor-mongerers.”


Jerabek also offered techniques for dealing with the different types of problem employees. For example, she said, handle slackers by “find[ing] out what motivates them and what type of projects they prefer. Also, when assigning projects, do more planning: Make sure the project is broken down into reasonable steps, and check in on their progress more often.”

On the hiring front, she said it's advisable to “start with pre-employment, personality and attitude assessments that measure emotional intelligence, social skills, leadership skills and turnover probability”; to “avoid standard interview questions and instead “tailor interview questions to a job candidate's results on personality tests”; and to “check the person's references and ask specifically about behavioral or attitude issues.”

In the end, Jerabek noted, employers may not have any option but to fire toxic employees who refuse to change.

To contact the reporter on this story: Martin Berman-Gorvine in Washington at mbermangorvine@bna.com

To contact the editor responsible for this story: Simon Nadel at snadel@bna.com

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