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The very real savings connected to dumping those toxic employees

Tim Gould
by Tim Gould
January 7, 2016
  • Accounting
  • Policy and culture
2 minute read
  • SHARE ON

When most people talk about toxic employees, they’re thinking back to that awful worker who lasted a few weeks before the organization just couldn’t take it any longer and cut him loose. But the truth is, toxic employees often stick around for a very long time at the detriment to the company as a whole. 

Toxic employees, or those who commit an egregious policy violation, tend to be a drag on the rest of the company.

The Harvard School of Business has released new research showing a rough monetary benefit of eliminating toxic employees from your team. On average, getting rid of that employee could save you $12,489.

Open-and-shut case? Not so much

You may be thinking this is no surprise. Of course getting rid of (or avoiding hiring) a bad employee will help save your organization money.

But it’s not always so cut-and-dried. Often toxic employees stay on or even thrive at organizations because they are stellar performers. They’re able to do whatever it takes to produce tremendous work results.

That could include breaking rules, alienating co-workers or even disrespecting superiors.

So when it comes time to make decisions on their employment, managers often wonder if they let him or her go if they could ever find a suitably productive replacement.

Hiring smarter

But according to the study, you don’t need to replace a toxic worker with a stellar one in order to see the benefits. Even hiring a worker in the top-25% can have a $10,500 benefit over cutting ties with a toxic employee. If you happen to land a top-1% candidate, the payoff is still less than half of losing a toxic worker.

What that means: Hunting for purple squirrels may be a losing strategy. This is a term for candidates who fit every requirement for the job and excel in each area. But the study shows that landing this candidate doesn’t have as much effect on the bottom line as just avoiding hiring mistakes or not overlooking warning signs.

HR should evaluate job candidates based not only on their raw skills, but also on how they conduct themselves. And it’s important to carefully check references, as this can pinpoint potential problems.

Company leaders need to remember that very few people come into a job ready to hit the ground running. It may take a while to bring them along, but the growth over time could be worth it.

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