10 Signs of a Toxic Workplace Culture

Does your franchise system have a culture problem? Here’s what you can do about it.

Workplace culture has long been a key factor in recruiting and retaining employees, but often when employers talk about their culture, they talk about perks like happy hours, free bagels, and summer hours. But today, that’s simply not enough. Websites like GlassDoor and Comparably allow job seekers to see actual reviews and comments from employees of potential employers. 

If you have a positive workplace culture, these types of sites can be a great validation tool, but if not, they can be a red flag for job candidates—and a sign to company leadership that you could have a toxic culture. 

How a Toxic Work Culture Starts

Every franchise organization has a distinct culture, whether documented or not, whether positive or not. So what makes a toxic workplace culture? The signs aren’t always downright obvious—especially to leadership. They may be the founders or some of the original employees, and the culture may have formed organically. It can be hard for them to acknowledge that the employee experience isn’t naturally positive. In larger franchise companies, leaders might simply be unaware of some of the culture issues happening at the manager-employee level. In any case, a toxic workplace culture has a direct impact on productivity, innovation, and the bottom line.    

Warning Signs of a Toxic Work Culture

Often, the signs of a toxic workplace culture can be identified in the job posting—before potential employees even decide to submit an application. Insider lists some of the biggest red flags to look for, including phrases like, “work hard, play hard”, “fast-paced environment”, or “self-starter”, which can indicate a burnout culture or lack of support. 

Vague or non-existent compensation information and a laundry list of responsibilities can also be turn-offs for job candidates. And one of the most cringeworthy? Describing the company as a “family”. 

Despite that, toxic workplace phrases in job postings are on the rise according to Fortune. If you’re struggling to attract employees to your franchise, take a close look at your job postings to see if you’re losing potential employees before you even talk to them.

How to Tell If Your Company Has a Toxic Culture

For franchise leaders and HR professionals struggling to retain employees, these are the biggest signals that you might have a culture problem. 

1. People are afraid to make mistakes for fear of being disciplined or even fired. When rules and policies are overly important, employees don’t trust each other’s judgment, or even their own judgment. This leads to a lack of new ideas and creativity. 

2. Communication and transparency are lacking. Without clear communication and direction, employees may feel out of the loop or confused about what they’re supposed to be doing, which can lead to frustration and time wasted on unnecessary work and meetings.

One quarter of corporate franchise employees reported that management doesn’t communicate clearly, and 23% said they do not have defined goals or clear measures for performance. These are two of the lowest rated areas on FBR’s Franchising@WORK employee engagement study.

3. Strained relationships between managers and direct reports. As the old saying goes, employees leave managers, not companies. FBR’s research shows that an employee’s direct manager has the strongest impact on their overall satisfaction and engagement.

4. Lack of trust. The pandemic forced many franchise companies to adopt more flexible work arrangements, and many employees reported higher productivity and satisfaction. With more franchise companies requiring a return to the office, many employees who prefer remote work may feel like they aren’t trusted to do their work. 

87% of corporate franchise employees said they were equally or more productive while working remotely.

5. Plenty of criticism but no recognition for extra effort or wins. 1 in 4 corporate franchise employees say they do not receive the recognition they deserve. When employees feel underappreciated, resentment builds. Couple that with criticism and the environment quickly becomes toxic. 

6. Office politics and workplace drama. This can be plain old office gossip, cliques among co-workers, or unhealthy competition for projects, titles, or face time with leadership or clients. Whatever the cause, high levels of drama can lead to psychological burnout and anxiety.

7. No one knows what the company stands for. Most people want to believe the work they’re doing has meaning and to want to be able to connect the dots between your brand’s mission and their contributions. This is especially true of Gen Z employees, who have by far the lowest satisfaction and engagement scores.

8. High turnover. This is a no-brainer. If your company has a revolving door and few long-time employees, there’s clearly a culture problem. Research from MIT Sloan found that workers were 10.4 times more likely to leave their jobs because of toxic work culture than to leave because of compensation.

9. Lack of diversity, equity and inclusion. 40% of workers said they would switch jobs to be part of a more inclusive culture, according to a study by EQ Community. Additionally, women are 41% more likely than men to experience toxic corporate culture, and across C-Level positions, women were 53% more likely to experience toxicity in the workplace.

10. Unreasonable workload. Unrealistic expectations for work output, lack of prioritization from leadership and management, and work bleeding into personal time, can cause employees to become apathetic and burned out. When it feels like you can never accomplish a goal, it’s hard to stay motivated. 

How to Reduce Toxic Work Culture and Improve Employee Experience

The first step is to revisit your company’s core values, and revamp them if necessary. Your core values should differentiate your company from others, have significant meaning, and be authentic. The goal is not to list a lot of things that sound good, but create a set of guidelines to aid in decision making. Whenever an employee or manager needs to make a choice or deal with a situation, they can relate back to these values as a guide to make decisions consistent with your company’s goals and mission. They are guiding principles that align all team members.

For guidance on how to establish and evaluate your core values, download The CEO’s Guide to Creating and Maintaining a Positive Culture in Franchising.

The next step is to conduct an employee engagement survey. Even if you think you have a positive culture, employees will appreciate the opportunity to provide constructive feedback, and you can use the data in your hiring efforts. And if the results aren’t great, you’ll have valuable feedback and data to identify where the biggest risks are, where there are opportunities to make improvement, and how to start building trust and engagement with employees. 

If you’re not sure where to start, Franchise Business Review can survey your employees and provide you with important insights into employee satisfaction and engagement, as well as best practices and benchmarking information specific to the franchise sector—something you can’t find anywhere else. Schedule a time to walk through a 10-minute demo. 

Related Resource: The Ultimate Guide to Employee Engagement for Franchises

Employee engagement is critical to the success (or survival) of franchise organizations, but it’s becoming increasingly difficult to foster engagement.

Download your free eBook to learn how to:

• Recognize barriers holding employees back from fully engaging
• Create a supportive and engaging workplace culture
• Make engagement a key part of your hiring and retention strategy
• Measure and benchmark your team’s engagement against other franchise employers

DOWNLOAD NOW