A third of CEOs now describe their own workplace culture as toxic, while 40% of employees say the same, new research reveals. Yet executives in toxic workplaces are also more likely to report strong financial growth, raising questions about whether short-term performance can mask longer-term cultural risks.
Workplace toxicity appears to be rising – and even CEOs are increasingly recognising it within their own organisations. Some 33% of CEOs now describe their workplace culture as toxic, up 25 percentage points year on year, according to Businessolver’s 2026 State of Workplace Empathy research.
Among employees, 40% describe their workplace as toxic, an increase of 18 percentage points. But one of the most striking findings is what is happening alongside that deterioration in workplace culture. C-suite executives who describe their organisations as toxic are twice as likely to report significant financial growth as executives in non-toxic organisations.
That does not mean toxic cultures cause stronger financial performance. The findings are based on reported associations and do not establish causation. But they raise an uncomfortable question for business leaders. Can an organisation appear successful financially while problems with its culture, trust and employee experience build beneath the surface?
TOXIC WORKPLACES & PRODUCTIVITY
Businessolver describes one of the central findings from its 11th annual State of Workplace Empathy research as a workplace paradox. Executives in organisations they describe as toxic are more likely to report significant financial growth.
Yet those same workplaces show signs of serious cultural strain. Among C-suite executives working in toxic cultures, 73% say they feel intimidated by their co-workers. At the same time, 66% of employees say they would leave for a more empathetic workplace, even if that meant accepting up to a 20% pay cut.
Employees in workplaces they consider unempathetic are also more likely to report burnout, anxiety and depression. The findings challenge the assumption that strong financial performance necessarily signals a healthy organisation. Growth, revenue and productivity may tell leaders how a business is performing commercially. They do not necessarily reveal how sustainable that performance feels to the people producing it.
Businessolver itself describes toxic workplaces as potentially “winning – for now”, questioning whether apparent short-term performance could eventually collide with the consequences of poor workplace culture.
WORKPLACE TOXICICTY: A PERSISTANT PROBLEM
The findings add to growing evidence that workplace toxicity remains a persistent problem. Recent research found that nearly seven in 10 US workers have experienced a toxic workplace. That research identified leadership behaviour as the biggest contributor. Among employees who had experienced a toxic workplace, 79.1% blamed unethical, unaccountable or unsupportive leadership, while 72.1% pointed to poor communication from leaders and managers.
Workers also identified unfair treatment, favouritism, discrimination, lack of support, weak recognition and cultures characterised by gossip, fear, blame and poor collaboration. Almost half – 47.6% – said they had quit a job because of a toxic environment. The findings suggest workplace toxicity is more than an employee experience problem. It can become a retention, reputation, leadership and organisational risk.
EMPATHY IS GETTING HARDER FOR CEOs
Businessolver’s research also reveals another striking shift. Some 61% of CEOs now say demonstrating empathy in their day-to-day work is difficult – a 32 percentage-point increase from the previous year. That matters because organisations are asking leaders to navigate an increasingly difficult combination of pressures: growth expectations, restructuring, cost reduction, technological transformation and changing employee expectations.
Empathy can become harder to practise precisely when employees may need it most. That doesn’t mean empathetic leadership requires executives to avoid difficult commercial decisions. Companies sometimes need to restructure, change strategy, cut costs or eliminate roles. The question is how those decisions are made and how people are treated while they are happening.
Previous research found that 86% of employees believe empathetic leadership boosts morale and 87% believe it is essential for an inclusive workplace. But that study also highlighted an important distinction between performing empathy and practising it. More than half of employees surveyed believed their company’s attempts to demonstrate empathy could be dishonest, highlighting the importance of backing empathetic language with action.
WHEN EMPATHY COLLIDES WITH BUSINESS PRESSURE
That distinction becomes particularly relevant in Businessolver’s latest C-suite findings. Among executives prioritising AI-driven headcount reduction, 30% say organisational empathy “gets in the way” of their personal business goals, compared with 19% of other executives.
The finding does not mean most executives believe empathy is an obstacle. Seven in 10 of those prioritising headcount reduction did not give that response. But it exposes a wider tension. What happens to empathy when it comes into conflict with a leader’s immediate commercial objectives?
It is relatively easy for an organisation to describe empathy as a corporate value when business conditions are favourable. Its real test may come when leaders have to make difficult decisions about jobs, workloads, costs and organisational change.
WELLBEING AT WORK
That tension is visible in other recent workplace research. As Fair Play Talks reported earlier this year, 72% of employees believe their employer prioritises productivity over wellbeing, up from 61% in 2025. Only 33% strongly agreed their employer values their mental health, down from 41% the previous year.
Half of employees avoided taking mental health days because they feared being judged, while 65% said they had hidden mental health struggles to avoid appearing weak. Those findings illustrate why workplace empathy cannot be judged solely by policies, benefits or leadership statements. Employees experience culture through what happens when they actually need support.
TOXIC CULTURES CAN SILENCE EMPLOYEES
One of the longer-term dangers of unhealthy workplace cultures is that employees can stop telling organisations what is going wrong. Recent US research found that one-third of employees fear retaliation for reporting workplace misconduct.
More than one in five said they had witnessed unethical or illegal behaviour, while 21% had felt pressure to compromise their own ethical standards. The implications extend beyond employee wellbeing.
Organisations depend on people speaking up about misconduct, mistakes, operational risks, poor decisions and emerging problems. A culture that discourages challenge can therefore prevent leaders from seeing risks until they become much more serious.
As Fair Play Talks recently highlighted during National Inclusion Week, workplace trust cannot be built through campaigns alone. When employees do not believe they can raise concerns safely, silence can easily be mistaken for satisfaction.
TOXIC MANAGEMENT REMAINS PART OF THE PROBLEM
The problem is not confined to US workplaces. Previous UK research found that one-third of UK employees had suffered under a toxic manager during the previous five years. More than four in 10 had left a job because they were dissatisfied with management.
Meanwhile, nearly seven in 10 HR leaders acknowledged that bad managers were a problem within their organisations. Yet only 54% of HR professionals believed their leaders had the skills required to build effective high-performing teams.
The research also found that employees increasingly valued empathy and emotional intelligence alongside more traditional management skills. The message across the studies is remarkably consistent: workplace culture is shaped less by what an organisation says than by what managers and leaders do every day.
THE HUMAN COST OF TOXIC CULTURES
Toxicity can also affect groups of employees differently. Previous research found that women were 41% more likely than men to experience toxic corporate cultures.
Among people in C-suite roles, women were 53% more likely than men to report experiencing toxicity. The research identified favouritism, disrespect, non-inclusive behaviour, cut-throat competition and abusive behaviour among the issues contributing to women’s experiences.
That makes workplace culture an inclusion issue as well as a leadership issue. A culture can appear broadly functional while particular groups experience something very different.
AI IS BECOMING ANOTHER TEST OF WORKPLACE CULTURE
Although Businessolver’s wider empathy research extends well beyond artificial intelligence, AI provides a timely example of how organisational culture affects employees’ experience of change. Among employees who describe their organisation as empathetic, 87% report receiving adequate AI training.
Among employees who describe their workplace culture as toxic, that falls to 33%, compared with 51% across employees overall. Workers in toxic cultures are also more likely to say:
- 51% worry they are falling behind in their ability to use AI, compared with 31% overall
- 54% say AI has slowed or disrupted their career progression, compared with 35%
- 51% worry about their future with their organisation because of AI, compared with 39%
- 50% say AI creates additional checking, clean-up or administrative work, compared with 38%
The research does not prove that an empathetic culture causes better AI outcomes. But the association raises an important question for employers: Could workplace culture itself be part of AI readiness?
Technology may be the tool, but whether employees feel supported, trained, confident enough to ask questions and safe enough to challenge problems depends heavily on organisational culture. That echoes previous analysis examining why AI transparency depends on psychological safety.
TOXIC CULTURE CAN COEXIST WITH HIGH PERFORMANCE
Perhaps the most uncomfortable lesson from Businessolver’s findings is that unhealthy cultures do not necessarily cause organisations to fail immediately. A business can hit financial targets while employees burn out. It can grow while trust declines.nIt can recruit new people while others leave. And leaders can believe their organisation is empathetic while employees experience something very different.
That makes culture difficult to assess through traditional business metrics alone. Indeed, Businessolver found that C-suite executives in toxic organisations not only report stronger financial growth; they also rate themselves and their companies more highly on empathy than executives in non-toxic organisations.
That disconnect may be as important as the toxicity finding itself. If leaders believe they are creating an empathetic culture while employees experience fear, intimidation or distrust, the organisation may struggle to recognise the problem – let alone address it.
FROM WORKPLACE CULTURE TO BUSINESS RISK
The longer a toxic culture persists, the more likely its consequences are to move beyond HR. Employees can leave. Recruitment can become harder. Institutional knowledge can disappear. Mental health and absence can deteriorate. Employees may stop speaking up. Managers can burn out.
And organisations may become less able to adapt when major transformation requires people to learn, collaborate and challenge decisions. Businessolver estimates that 66% of employees would move to a more empathetic workplace even if doing so required accepting up to a 20% pay cut.
Whether employees actually make those decisions will depend on individual circumstances and labour-market conditions. But the finding indicates how strongly workers say they value culture and empathy.
Culture therefore deserves to be treated not simply as an HR issue but as part of business resilience and organisational risk.
WHAT EMPLOYERS & BUSINESS LEADERS SHOULD DO NEXT
Don’t confuse financial performance with occupational health
Revenue and growth are essential business measures, but they cannot tell leaders everything about the health of an organisation. Businesses should assess retention, burnout, trust, psychological safety, employee voice, management quality and workforce wellbeing alongside financial performance.
Look beyond leadership perceptions
If executives rate their culture highly while employees report very different experiences, leaders need mechanisms that surface those differences. Employee listening should include confidential surveys, qualitative feedback, exit data, grievance trends and opportunities for people to speak openly without fear of retaliation.
Hold managers accountable for culture
Poor management repeatedly emerges as a major driver of toxic workplace experiences. Organisations should make respectful behaviour, communication, inclusion, people development and accountability part of how they assess management performance – not optional leadership attributes.
Make empathy practical
Empathy should be visible in decisions, not confined to corporate language. That means listening before acting where possible, explaining difficult decisions honestly, considering their human impact and providing meaningful support through change.
Build pscychological safety
Employees need to know they can challenge decisions, report mistakes and raise concerns without damaging their careers. Leaders should pay particular attention to whether people remain silent because they believe speaking up will achieve nothing.
Examine who experiences culture differently
Headline engagement scores can hide significant disparities. Organisations should examine employee experience by gender, seniority, disability, ethnicity, age, work type and other relevant groups where appropriate and lawful.
Treat culture as part of transformation readiness
Whether organisations are introducing AI, restructuring or changing operating models, transformation depends on people. Trust, communication, training and employee voice should therefore form part of transformation planning from the outset.
WHY THIS MATTERS FOR RESPONSIBLE BUSINESS
Businessolver’s findings challenge a comfortable assumption about workplace culture: that toxic organisations will inevitably perform badly and healthy organisations will automatically outperform them.
The reality may be more complicated. An organisation can apparently perform well financially while employees experience intimidation, burnout or distrust. That does not make toxicity an effective business strategy. It means the consequences may not appear immediately in conventional performance measures.
The more important question is what happens over time. Can an organisation continue to attract and retain people if employees no longer trust its leaders? Could it innovate if people are afraid to challenge decisions? Can it transform successfully if employees do not feel supported through change? And can leaders genuinely understand organisational risk if employees have stopped telling them what is wrong?
Empathy isn’t the absence of difficult business decisions. It is reflected in how leaders make those decisions, how they communicate them and how they treat the people affected by them.
Financial performance tells us whether a business is delivering results today. But culture may tell us something equally important – whether people can continue delivering them tomorrow.
ABOUT THE RESEARCH
Businessolver’s 2026 State of Workplace Empathy Report is the company’s 11th annual study examining workplace empathy and employee experience. The research draws on insights from more than 1,300 employees and executives and was developed in partnership with Edelman Data & Intelligence.
Download the full survey here.
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