Employers, workers pay the price as workplace misconduct is on the rise

Businesses are paying a steep price for workplace misconduct. Toxic cultures cost companies $223 billion from turnover over the last five years alone, according to the State of Misconduct at Work in 2023 report from Fama Technologies.

“Understanding the extent and nature of workplace misconduct is crucial for building a supportive work environment and fostering scalable business success,” said Ben Mones, CEO and founder of Fama.

Workplace misconduct is behavior that violates company policy or breaks the law and negatively affects an organization. Behaviors range from minor acts such as tardiness to extreme, gross misconduct such as threats and violence. Anyone in or even around the organization can commit misconduct. Research shows that it takes only 1 in 20 workers engaging in toxic misconduct to significantly affect the productivity, engagement and retention of a team.

Victims and survivors of misconduct may experience emotional, mental, physical or financial impacts, depending on the type of misconduct and their proximity to it. Organizations, on the other hand, often feel the consequences to their corporate and employer brand reputation, legal status and ability to remain compliant, and ultimately, the organization’s financial status.

Among the key findings of the report:

• 1 in 10 job candidates was found to have misconduct issues in 2023.
• Content with misconduct increased 40% year over year.
• 8 of 9 industries failed to successfully mitigate misconduct below the 5% threshold.
• Industries with the most misconduct included consumer services, media and entertainment, and education.
• The most common forms of misconduct were harassment, sexual misconduct and intolerance.

Related: Industries with the most misconduct

Harvard Business Review research shows that misconduct is contagious. When people see others engaging in misconduct, they are more likely to engage in it themselves. Visibility into the inner workings and everyday activity of others was limited during the long period of remote work. Now that most workers are working in an office again, however, misconduct may be increasing in some industries compared to others that have embraced work from home or hybrid work environments.

“Our findings this year point to an urgent need for businesses to adopt robust screening practices, especially in light of the dramatic increase in the quantity of misconduct activity,” Mones said. “As shown in our research, preemptively identifying potential misconduct can significantly benefit organizations, echoing Harvard Business School’s findings that removing a toxic employee is twice as valuable as hiring a top performer.”