New Study Proves You Shouldn’t Hire Jerks

New study of 60,000 terminations suggests that toxic coworkers can bring down the entire team—and cost the company thousands of dollars

(Illustration: Diana Quach/Vocativ)
Dec 07, 2015 at 7:28 PM ET

Toxic coworkers don’t just make for a miserable workplace, they’re actively bad for business, according to a new study from Harvard Business School. Researchers found that dishonest and downright dangerous employees can cost their companies thousands of dollars. They concluded that, from a purely financial perspective, one bad egg often costs significantly more than even several top tier hires can be expected to contribute to the company’s bottom line.

When it comes to toxic coworkers, “literally, the worst thing to do is to not do anything, which happens a lot, unfortunately,” Dylan Minor, an economics professor at Harvard and coauthor on the paper, told the Harvard Gazette.

For the study, Minor compiled data from a company that supplies job-testing software to help employers make hiring decisions. When companies use the software, which includes psychological testing, they agree to inform the testing company whenever an employee is fired. Because of this arrangement, Minor was able to see the specific circumstances, as well as the psychological profiles, of 600,000 workers who were recently terminated from 11 different companies.

Minor and his colleagues chose to focus on “toxic workers”, defined as people who were, “harmful to an organization, either by damaging the property of the company—theft, stealing, fraud—or other people within the company through bullying, workplace violence or sexual harassment,” Minor said.

Based on company records, Minor and his team calculated the average financial gain when a company hires a “superstar” worker—one that is so good at his or her job that he or she is able to complete the work of more than one “average” worker. Because the company would have to hire additional workers if not for the talents of their top performers, they actually “save” money. Then the scientists compared that to the estimated costs incurred by having to replace toxic workers and the people who leave the company because of their coworker’s rotten attitudes and antics.

The study suggests that superstar workers in the top 1 percent of the company are worth an additional $5,303, while one toxic coworker costs the company at least $12,489—and probably even more than that. From the paper:

The total estimated cost is $12,489 and does not include other potential costs, such as litigation, regulatory penalty, and reduced employee morale. Also not included are the secondary costs of turnover that come from a new worker’s learning curve: a time of lower productivity precedes a return to higher productivity. Thus, this estimate is likely a lower bound on the average cost of a toxic worker, at least for this empirical setting

Based on the psychological evaluations, Minor and his team also found that toxic coworkers are likely to be very selfish, overconfident and, surprisingly, emphatic about following the rules. One question posed on the tests required job candidates to choose between: “I believe that rules are made to be followed” and “Sometimes it is necessary to break the rules to accomplish something.” Employees later fired (and labeled “toxic”) were significantly more likely to believe that rules should be followed at all costs.

The notion that strict rule-following is not necessarily a good quality is nothing new. In fact, a manual on sabotage in the workplace issued by U.S. intelligence in 1944 told aspiring saboteurs to, “apply all regulations to the last letter” when working for employers sympathetic to the Axis. Because there’s almost nothing more toxic in the workplace than someone who insists on following every rule, always.

The study also revealed that toxic coworkers are, paradoxically, some of the most productive members of the workforce. However, the numbers are clear: a productive, but toxic coworker simply isn’t worth the cost.

“A natural question I get from people is ‘Why would anyone have a toxic worker? That’s crazy!'” Minor told the Harvard Gazette. “But then you realize they’re incredibly productive. And so, it makes sense then that maybe managers would look the other way because they’re really hitting all their productivity numbers.”