Workers are 10 times more likely to quit due to toxic work culture than pay

Yahoo Finance's Rick Newman details the MIT Sloan Management Review survey indicating workers are more likely to resign over toxic work cultures than pay and what factors contribute to employee retention.

Video Transcript

ALEXIS CHRISTOFOROUS: A record 4.5 million Americans quit their jobs in November. But how many of them were really quitting their bosses? Yahoo Finance's Rick Newman decided to take a closer look at the impact bad bosses are having on the tight labor market. I love this story, Rick. And I want to know, what are some of the main gripes of people you interviewed for this story?

RICK NEWMAN: It's interesting. I wrote one story about this in December and I asked people in that story, write in, let me know if this applies to you-- this problem of bad bosses. And of course, I got tons of response and I'm now writing about what some of those people told me. Hardly any of them have said I quit my job because I was underpaid.

The overwhelming majority say terrible managers, you know, everything ranging from family companies rife with nepotism and people who just don't relate to employees to huge companies, some of the biggest in the country, where managers don't seem to have any connection with the workers. So there's actually been a little bit of research on this phenomenon lately.

The MIT Sloan Management Review actually published a story that found that toxic culture is 10 times more likely to drive people out of their jobs than pay. And you know, I've asked a few business bosses about this, and they've said we kind of get that this is a problem. But, look, we've just been trying to survive the pandemic. And maybe it's time we start paying a little more attention to workers and what they want. And workers are saying, yep, it's time you started paying more attention to what we want.

- Rick, you know, we had Mandy Santos on a couple of days ago, and she didn't call them bad bosses. She called them baby bosses because they wouldn't look forward, and let people who were within the company grow, and gain a bigger status where they are. So what should companies and their leaders do to make sure that they're a part of the solution and not a part of the problem?

RICK NEWMAN: Well, let's go back to that MIT Sloan Research. So they found that among companies that seem to be losing the most workers, they do tend to be companies that have bad reputations for corporate culture. And companies that have good reputations for corporate culture, a couple that stood out like Southwest Airlines and Johnson & Johnson, you know, where the companies have kind of indoctrinated helping people get ahead and foster their careers and things like that-- much lower turnover. So that's actually showing up in the numbers these days.

So I think that managers and bosses need to understand that it's not just about pay and it's about benefits. A lot of times, it can be about flexibility, it can be about helping your workers know they have some career development, that there's a next step for them, and, perhaps, a step after that. You know, these things are not easy to indoctrinate at companies.

I mean, you know, there are whole management courses and curricula on how to do this. But of course, if you're a boss or manager, you can do it yourself. Just think more about listening to your employees and asking them what they want. I think sometimes just asking them and making workers feel like they have a voice is part of the battle.

ALEXIS CHRISTOFOROUS: Right. You make it sound so simple-- so easy, Rick. So then how can us workers tell if a company has poor management, poor leadership, you know, hopefully before you actually enter the company? But what are some telltale signs that things are not great?

RICK NEWMAN: That's a great question. I think if you're in a poorly run company, I think you know it. But what about a company you might be considering going to work for? One of the things that people really complain about-- I've heard a lot about this during the last year or two-- is in the hiring process, companies that ghost job applicants.

You know, they act interested in you, but then you never hear back from them. And, listen, it's not that hard these days to send somebody an email saying, hey, thank you for coming in for the interview, we actually went with somebody else. I've been talking with people who say, look, I'm not angry that I didn't get hired. I'm angry that these companies just don't even respond-- even when I reach back out.

"Harvard Business Review" even had a feature last year about corporate ghosting, and you have to wonder if companies are really having such a hard time filling all these open positions, why is it so hard just to send somebody an email who goes in for a job interview and say, thank you for coming in. We ended up going for somebody else-- and at least giving them some closure on that process.

So one person said to me, you know, the way a company treats its potential employees is the way it treats its actual employees. And any company that has a reputation for ghosting, I'm not interested in.

ALEXIS CHRISTOFOROUS: Well said. I'm with you. Respect is a two-way street. Rick Newman, thanks so much. It's going to be a good read when your story hits our site.