By Dr. Tess Breen, Organizational Psychologist

Key takeaway: Toxic organizational culture predicts employee turnover roughly 10 times more strongly than compensation does, according to research from MIT Sloan Management Review (Sull, Sull, and Zweig, 2022). In 2025, 44% of workers quit a job because of a toxic workplace, and 80% now describe their job as toxic. The fix isn’t a values poster or another pay rise. It’s three observable behavioral shifts at the senior leadership level.

A new round of culture data from 2025 makes the size of this problem hard to ignore. Toxic culture has cost American employers an estimated $223 billion in turnover over the past five years, according to research compiled by SHRM. Four in ten workers walked away from a job last year because of how they were treated. SHRM also found that 76% of employees believe their direct manager sets the culture of their workplace, not HR, not the values printed on the wall, not the CEO’s email signature. In my work with executive teams, this is the finding that lands hardest. Culture is whatever the most senior person in the room tolerates on a Tuesday at 2pm.

So why do compensation strategies keep failing to fix it? Because the research is very specific about what people actually leave for.

What “toxic culture” means in the research

When Donald Sull, Charles Sull, and Ben Zweig analyzed 1.4 million Glassdoor reviews for their 2022 MIT Sloan paper, they identified five behaviors that consistently drive people out: disrespectful treatment, non-inclusive practices, unethical behavior, cutthroat internal competition, and abusive management. Their finding became famous because the size of the effect was so large. Toxic culture was about 10.4 times more predictive of attrition than compensation. That ratio hasn’t softened. The 2025 follow-up data from Great Place to Work and iHire shows the trend accelerating, not reversing.

What I keep seeing in practice is that senior teams accept this finding intellectually, then build retention plans built almost entirely around money and benefits. The gap between what the research says and what gets approved at the board level is enormous.

Why pay rises don’t fix it

There’s a clean reason for this. Pay is what gets someone in the door. The daily experience of work is what keeps them there, or pushes them out. Once compensation crosses a baseline of fairness (and people are very good at finding out whether they’re below market), additional money does not compensate for being talked over in meetings, watching unethical behavior go unaddressed, or having a manager who manages by intimidation. A 2025 iHire report found that 57% of employees would leave a toxic job before enduring it, 29% would accept a pay cut to escape it, and 14% would give up a year of vacation. People are voting against bad culture even when it costs them.

Three leader behaviors that actually move the needle

The leaders I’ve coached who genuinely shift culture do three things consistently.

They name behavior, not values. Culture decks talk about “respect” and “integrity.” Effective leaders translate those words into observable behaviors: how interruptions are handled, what happens when someone misses a deadline, whether disagreement is rewarded or punished. A value is a wish. A behavior is a standard.

They treat the senior team as the unit of culture. Research by Linda Hill and colleagues at Harvard (MIT Sloan Management Review, February 2026) on what she calls humanized leadership emphasizes that culture is largely transmitted through the executive team’s observable conduct toward one another. If the senior team interrupts each other, treats disagreement as disloyalty, or quietly punishes truth-telling, that pattern propagates down through every level within roughly six months. You cannot delegate culture to HR.

They build accountability into one specific person at a time. The classic mistake is to “roll out” a culture initiative across thousands of employees. The leaders who get traction pick one or two people whose behavior is most out of alignment, and address it directly, privately, and quickly. This is uncomfortable. It’s also what works.

Where most culture initiatives go wrong

Three patterns derail well-intentioned culture work. First, the senior team commissions a culture survey but doesn’t model the behaviors it asks for. Second, the work gets reduced to a training program, which research consistently shows produces minimal behavior change without follow-up coaching. Third, leaders avoid the one or two high-performing but culturally damaging people on the team, because moving them on feels expensive in the short term. It always costs more later.

If you’re a senior leader looking at your engagement numbers and wondering why the last cycle of raises didn’t move them, the answer is almost certainly here. The good news: culture is a leadership decision, not a budget line.

If you’d like to talk through what this might look like in your own organization, you can find ways to work with me at drtessbreen.com/work-with-me.

Frequently asked questions

How long does it take to change an organizational culture?

Most credible research, including Edgar Schein’s foundational work on organizational culture, suggests that meaningful behavioral shifts at the team level can happen in three to six months when senior leaders model the change consistently. Enterprise-wide cultural change typically takes 18 to 36 months. The variable that matters most is whether the executive team’s own daily behavior shifts in the first 90 days.

Can a company have a great culture if individual managers are toxic?

Almost never, at least not for the people who report to those managers. SHRM’s 2025 data shows 76% of employees say their direct manager sets the culture of their workplace. A company can have an aspirational culture at the headquarters level and a deeply damaging culture inside specific teams. This is why culture surveys often surface variation by manager, not by company.

What’s the difference between a toxic culture and a high-pressure culture?

High-pressure cultures demand a lot but treat people with respect, communicate honestly, and reward integrity. Toxic cultures combine high pressure with disrespect, exclusion, unethical behavior, or intimidation. Research by Sull and colleagues is clear that pressure alone doesn’t drive attrition. Pressure paired with the five toxic behaviors does.

Is it ever possible to fix toxic culture without changing leadership?

Rarely. If the toxic behaviors live at the top of the organization, lasting change usually requires either a meaningful shift in how those leaders behave (often via executive coaching plus accountability), or a change in who occupies those seats. Mid-level interventions can soften symptoms but seldom address the source.

What’s the single best first step for a leader who wants to improve culture?

Stop trying to “improve the culture.” Instead, identify one specific behavior on your own senior team that doesn’t match what you say you stand for, and address it directly within two weeks. Culture work that starts at the top of the org chart, with one observable behavior, almost always outperforms broad-based initiatives.

Sources

• Sull, D., Sull, C., and Zweig, B. (2022). “Toxic Culture Is Driving the Great Resignation.” MIT Sloan Management Review. https://sloanreview.mit.edu/article/toxic-culture-is-driving-the-great-resignation/
• SHRM (2025). The High Cost of a Toxic Workplace Culture report.
• Great Place to Work (2025). 8 Signs of Toxic Company Culture That Drive Employee Turnover. https://www.greatplacetowork.com/resources/blog/toxic-company-culture
• iHire (2025). Toxic Workplace Trends Report.
• Hill, L. A., Menon, S., et al. (February 2026). “Humanized Leadership.” MIT Sloan Management Review.