As the world marks Anti-Bullying Day on 28 February, businesses must confront the growing toll of toxic work environments and prioritise psychological safety.
A study published by Remchannel in October 2024 revealed that permanent staff turnover in South Africa was 15.5% across all sectors, with 47% of this being due to resignations. Alarmingly, 27% of those that resigned cited relationship conflicts with their line manager including bullying or harassment, as their primary reason for leaving. “Nobody can bring their best selves if they are not treated well,” says Blessing Utete, Managing Executive at Old Mutual Corporate Consultants and host of the ‘Big Business Insights’ podcast, a platform for business leaders and decision-makers.
As businesses face increasing pressure to retain top talent, psychological safety is proving to be a critical differentiator.
The Link Between Toxic Leadership and Workplace Culture
“The impact of a dysfunctional workplace extends far beyond just unhappy employees—it directly affects a company’s bottom line,” says Utete.
At the core of workplace toxicity is often a bullying direct line manager—someone who uses fear, intimidation, or manipulation to maintain control. These leaders create an environment where employees feel undervalued, afraid to speak up, and ultimately disengaged from their work. When employees don’t feel safe, innovation stalls, productivity drops, and customer satisfaction suffers.
A bully is someone who undermines, belittles, or exerts excessive control over employees, often through humiliation, exclusion, or unrealistic demands. “Leaders set the tone for workplace culture, and when they foster fear instead of trust, the entire organisation suffers,” Utete adds.
The solution is to cultivate leadership that prioritises respect, fairness, and open communication.
The High Cost of Employee Turnover
Beyond its cultural damage, workplace toxicity has significant financial implications. “The financial impact of turnover is substantial,” says Lindiwe Sebesho, Managing Director at Remchannel. “Studies have shown that the cost of directly replacing an employee can be as high as 30–60% of their annual salary, with total turnover costs reaching 90–200% when you factor in recruitment, onboarding, training, lost productivity, reduced morale, and impact on organisational performance. Companies that fail to address toxic leadership will continue to lose talent at an unsustainable rate.”
Toxic Workplaces Hurt Recruitment and Reputation
Toxic workplaces don’t just impact current employees—they damage a company’s reputation, making it harder and even more expensive to attract new talent. “In today’s digital age, employer reviews, social media, and word-of-mouth quickly expose toxic cultures, deterring skilled professionals from joining organisations known for poor leadership and high turnover,” says Sebesho.
“Businesses that fail to address workplace toxicity risk becoming employers of last resort, driving up recruitment costs and struggling to compete for the best talent in an increasingly competitive job market.”
The Business Case for Psychological Safety
Research presented by Samad Masood from the Infosys Knowledge Institute at the Old Mutual Thought Leadership Forum in August 2024 revealed that while many companies rely on remote work or hybrid options to retain staff, it is broader support for mental health, wellness, and career growth that truly strengthens employee engagement and loyalty. “Our research in the South African market confirms this trend. Today’s employees need more than just a salary—they require authentic support for their well-being and a sustainable work-life balance,” says Sebesho.
At the centre of this is an environment where employees feel respected and valued for their contributions.
Utete and his guests on a recent episode of the Big Business Insights podcast, titled ‘Leadership: How to Balance Authority and Empathy,’ discussed the measurable benefits of fostering a culture of psychological safety:
- Higher engagement: Employees feel motivated, valued, and go beyond expectations.
- Increased collaboration: Teams function more effectively when they understand their role in the bigger picture.
- Improved customer satisfaction: A positive work environment translates to better service and customer experiences.
- More innovation: Employees are more likely to speak up, share concerns, and contribute new ideas—helping businesses avoid costly mistakes.
To help leaders identify and eliminate workplace bullying, Utete and his guests suggest asking the following key questions about your organisation:
- What does bullying look like in our organisation? What behaviours will we not tolerate?
- Do we have processes in place that allow employees to speak up?
- How do we ensure these processes are reliable and trustworthy?
- How can we address behaviours that do not align with our company culture?
“Toxic workplaces don’t just harm employees—they weaken entire organisations,” concludes Utete.
Leaders who prioritise psychological safety and foster trust will retain top talent, boost innovation, and build stronger, more successful businesses.
