There is a headline on HR News Canada today that some leaders might be tempted to print out and pin above the desk. Toxic cultures, 70 per cent of them, report significant financial growth. Non-toxic ones manage 36 per cent. Nearly two to one. If you are a CFO staring down tariffs, a volatile currency and a board that wants growth numbers by Friday, that ratio looks less like a warning and more like a permission slip.
I understand the appeal. This is a strange moment to be running anything. Trade policy changes by tweet. Political leaders model exactly the behaviour we tell employees to leave at the door: bullying, contempt, the open flouting of norms because norms are for people who lose. Against that backdrop, a little internal toxicity can start to feel like table stakes, the cost of staying in the game while the ground moves.
Read past the headline number and the study stops looking like a business case and starts looking like a warning label. The executives in toxic cultures who are boasting about growth are the same ones logging 2.6 times more layoffs and 2.2 times more cuts to bonuses than their peers elsewhere. They are also up to 34 percentage points less likely to offer core benefits, even though they report being more aware than anyone of how much their staff need them. Awareness without delivery is not empathy. It is a performance review nobody acts on.
Leaders know something doesn’t smell right
And these leaders know something is off. Seventy-three per cent of them say they feel intimidated by their own coworkers. That is not a stat about employees suffering under a bad boss. That is the boss admitting the building itself has become unsafe. A third of C-suite leaders in toxic cultures say cost savings through headcount reduction is the main reason they are investing in artificial intelligence, a rate 10 points higher than at healthier companies. Put plainly, some of this “growth” is just fewer people left to divide the numbers among.
The self-assessment gap stands out. Every single C-suite boss who calls their own culture toxic still rates themselves as an empathetic leader. Ninety-eight per cent say they are empathetic full stop. Meanwhile 40 per cent of employees say their workplace is toxic, up 18 points in a year, and CEO admissions of toxicity jumped 25 points on their own. Leaders and staff are describing two different companies. One of them is wrong, and it is not the people doing the work.
Here is the part that should actually worry a board most. Employees who see their organization as both toxic and lacking empathy are dramatically less likely to feel connected to their leaders, to belong, or to admit a mistake without fear. They report higher burnout, anxiety and depression than employees anywhere else in the data set. Trust survives toxicity for a while, oddly enough: 80 per cent of staff who call their culture both toxic and empathetic still say they trust leadership. But that trust is not unconditional, and it is not free.
Workers prefer empathy to money
Meanwhile the labour market is quietly pricing all of this in. Sixty-six per cent of employees say they would take a pay cut to work somewhere genuinely empathetic. Among employees already inside toxic cultures, that figure rises to 73 per cent. That is not a soft preference. That is a workforce telling you, in the clearest language an economist could ask for, what it thinks your culture is worth relative to your salary band.
CEOs, for their part, do not seem to have connected the dots. Only 27 per cent believe lower turnover is a benefit of running an empathetic organization, a number that has fallen 30 points since 2019 even as employees themselves rate retention as a benefit at twice that rate. The people signing the paycheques have convinced themselves empathy is a nice-to-have for the annual report, not a retention strategy sitting in plain sight in their own survey data.
None of this means toxic companies are about to collapse. Businessolver’s own numbers say the opposite, for now: cost discipline is being rewarded, not punished, and the market has shown no particular interest in waiting for the human costs to show up on a balance sheet. That is what makes the finding dangerous rather than reassuring. A strategy that works until it doesn’t is not a strategy, it’s a countdown, and nobody running one ever seems to know exactly how much time is left on the clock.
Toxicity and short-term gains get along fine
So take the study for what it is: evidence that toxicity and short-term performance can coexist, not proof that one causes the other, and certainly not a business case. Tariffs and turbulent politics are real pressures, and they will keep tempting leaders to treat their own people as the easiest lever left to pull. The executives who resist that temptation will not show up as heroes in next year’s growth column.
They will simply still have a culture worth measuring.
