6 Warning Signs Your Business Culture Is Turning Toxic

By Tom Hart, Founder of Benton Oakfield

Every business owner wants a productive and positive work environment. But what happens when your company culture quietly shifts into something harmful? Toxic workplaces rarely appear overnight — they grow in the shadows, often unnoticed until it's too late.

Here are six early warning signs your business culture may be turning toxic — and what you can do to stop it.

1. High Employee Turnover

If you're constantly replacing key team members, it's time to look beyond performance. One of the leading causes of employee departure is feeling unappreciated. Employees need to know their work matters and that leadership sees their value. A quick check-in, a sincere thank you, or recognizing their effort in meetings can go a long way.

2. Lack of Communication and Trust

How well do your managers and employees communicate? If most decisions are pushed from the top down with little collaboration, that’s a red flag. Employees thrive when they feel heard. Encourage managers to discuss the "why" behind decisions and invite feedback to build mutual trust.

3. A “Me vs. We” Mindset

If your team is focused on CYA ("cover your own rear") behavior, productivity and innovation suffer. This culture often stems from fear — fear of reprimand or failure. Leaders must foster psychological safety, where mistakes are seen as opportunities to learn rather than grounds for punishment.

4. Frequent and Erratic Changes

Change can be good — when done right. But constant, top-down changes with no input from staff lead to confusion and burnout. The solution? Involve employees in operational decisions. Ask, “How would you improve this process?” This builds shared ownership and makes transitions smoother.

5. Leadership Blind to Diversity Gaps

Many executives believe their workplace is “diverse enough.” But truly inclusive companies never stop striving to improve. Diversity isn’t a checkbox — it’s a culture of continual growth. Consider launching regular training sessions, inviting honest conversations, and reviewing hiring practices through an inclusive lens.

6. Excessive Workplace Gossip

While some level of chatter is natural, excessive gossip signals deeper issues like distrust, miscommunication, or boredom. Address it directly. If you overhear something inappropriate, ask: “Have you talked to that person directly?” Set a firm tone: gossiping undermines the team and won’t be tolerated.

Culture Starts at the Top

Business culture isn’t just posters in the break room or mission statements. It’s how people treat each other when the boss isn’t looking. As leaders, we set the tone. And if we ignore the early signs of toxicity, we risk burning out our best people — and our future success.

At Benton Oakfield, we help companies design benefits strategies that reinforce a strong, inclusive, and healthy workplace culture. Because when employees feel valued and supported, everybody wins.

Want to learn more about building a better workplace? Reach out — we're here to help.