HR Is Much More Than Gifts, Rangoli & Birthday Cakes: How HR Can Identify & Combat Toxic Work Culture.

For too long, HR departments have been viewed as the fun organisers of an organisation, managing celebrations, Rangoli competitions, and distributing gifts during festivals. While these activities help in fostering camaraderie, they are just a fraction of what human resources truly entails, the role of HR goes far beyond that.

HR is a critical part of the organisation’s strategy—an ocean in itself—responsible for talent management, leadership development, performance management, employee engagement, training and development, diversity and inclusion, compensation and benefits, compliance and risk management, employee well-being, conflict resolution, workforce planning, succession planning, change management, employee relations, employer branding, HR analytics, onboarding and offboarding, HR technology integration, legal and regulatory compliance, total rewards strategy, and corporate social responsibility (CSR).

However, one of the most pressing challenges for HR today is addressing toxic work cultures. Too often, companies roll out stress management initiatives as a quick fix, ignoring the deeper, more complex issues of toxic work environments. A healthy workplace is about more than stress management; it’s about building a culture that values employees, fosters trust, and encourages open communication.

Unhealthy Work Culture: A Silent Killer

A toxic work culture can have severe impacts on employees' mental health and productivity. Here are nine warning signs that HR professionals should watch for:

1. Lack of Communication and Transparency: When leadership fails to communicate openly, employees feel excluded and undervalued. Transparency is key to building trust.
2. No Recognition or Appreciation: A lack of recognition can make employees feel unseen and demoralised, leading to disengagement.
3. High Turnover Rates: Frequent departures can be a strong signal of toxicity. High turnover creates instability and lowers morale.
4. Constant Negativity and Criticism: Environments that focus on what’s wrong rather than what’s working foster anxiety and erode confidence.
5. Culture of Blame: A workplace where mistakes are punished rather than used as learning opportunities leads to fear and risk aversion.
6. No Work-Life Balance: Organisations that discourage breaks, vacations, or personal time set employees up for burnout.
7. Micromanagement: Lack of trust in employees' abilities creates unnecessary stress and erodes team morale.
8. Discrimination and Harassment: Any form of discrimination or harassment—whether based on gender, race, or sexual orientation—isolates individuals and can lead to severe mental health challenges.
9. Unrealistic Expectations: Setting unattainable goals without proper resources leads to frustration and burnout.

Case Study: The Ernst & Young Incident

Recently, a tragic incident involving a young woman from Ernst & Young (EY) India highlighted the extreme dangers of a toxic work culture. Anna Sebastian Perayil, a chartered accountant from Kochi, joined EY in March 2024. Overwhelmed by an “excessive workload,” Anna’s health quickly deteriorated. Despite her relentless dedication, the unmanageable demands took a toll, and Anna lost her life due to the stress. Her grieving mother penned a heartbreaking letter to the head of EY India, calling out the toxic culture that led to her daughter’s death.

This incident went viral, sparking a nationwide conversation about the pressure cooker environments at global firms. EY India issued a statement expressing condolences and promised to improve workplace conditions, but this incident underscores the urgent need for organisations to prioritise the well-being of their employees. It also emphasises the critical role of HR in identifying and addressing such toxic elements before they lead to tragic outcomes.

The Role of Leadership in Toxic Cultures

Leadership plays a pivotal role in either cultivating a healthy work environment or perpetuating toxicity. A culture of poor leadership, marked by micromanagement, blame-shifting, and unrealistic expectations, can quickly spiral into toxicity. Leaders must be held accountable for their actions. HR should implement leadership development programs focusing on emotional intelligence, communication, and conflict resolution. By promoting responsible leadership, organisations can foster positive, productive environments.

Concrete Strategies to Address Toxic Culture

Addressing toxicity requires more than a few wellness programs. Here are specific strategies HR can employ to identify and combat toxic work culture:

1. Conduct Regular Employee Surveys: Use anonymous surveys to gauge employee satisfaction and identify areas of concern. Make the results actionable.
2. Exit Interviews: These can be invaluable in understanding why employees leave and what systemic issues may exist within the company.
3. Open Communication Channels: Create safe spaces where employees can voice concerns without fear of retaliation.
4. Leadership Accountability: Implement systems where leadership is regularly evaluated based on team morale and retention.

The Impact of Toxic Culture

A toxic work culture doesn’t just affect employee well-being; it directly impacts company performance. Low morale leads to decreased productivity, higher absenteeism, and increased turnover. Studies have shown that companies with toxic cultures are also more likely to face legal challenges, including discrimination lawsuits and penalties related to harassment or unsafe work conditions.

For example, in the case of EY India, the company faced immense public backlash, including thousands of social media posts criticising their lack of empathy and engagement following Anna's death. These incidents can tarnish a company's reputation, making it harder to attract and retain top talent.

Challenges for HR

One of the biggest challenges HR faces in addressing toxic cultures is resistance to change. Employees and even leadership may be resistant to change, especially when it challenges the status quo. To overcome this, HR must gain buy-in by demonstrating the long-term benefits of a healthy work environment.

Another challenge is limited resources. Not every organisation has the budget for extensive wellness programs or leadership training. In these cases, HR can focus on prioritising initiatives that offer the most immediate impact, such as improving communication channels or offering flexible work arrangements to reduce stress.

External Factors Contributing to Toxicity

Industry trends and external pressures, such as economic downturns or rapid technological change, can exacerbate toxic cultures. For example, companies in high-growth industries like tech or finance often push employees to their limits to meet market demands. Additionally, the rise of remote work has introduced new challenges, such as blurred boundaries between personal and professional life, which HR departments must navigate carefully.

There are also legal implications of ignoring toxic work cultures. Companies could face lawsuits related to mental health issues, discrimination, or unfair dismissal. It’s crucial for HR to ensure that policies are in place to protect both the organisation and its employees from legal repercussions.

The Future of HR: Tackling Toxicity

The role of HR is evolving. Today, it’s not just about compliance or managing payroll; HR is becoming a strategic partner in creating positive work cultures. Emerging trends, such as employee experience initiatives and mental health programs, are helping HR departments proactively address toxic environments.

In the future, HR departments will likely focus more on data-driven solutions to monitor and improve workplace culture. Regular surveys, pulse checks, and sentiment analysis can provide actionable insights to address concerns before they escalate. Furthermore, as the conversation around mental health continues to grow, organisations that prioritise well-being will have a competitive edge in retaining top talent.

Conclusion

HR departments must transcend their role as event organisers and become the driving force behind cultural transformation in the workplace. Toxic cultures cannot be fixed with stress management programs alone—they require systemic change, leadership accountability, and open communication. The case of Anna Sebastian Perayil at Ernst & Young is a tragic reminder of the stakes involved. By addressing toxicity head-on, HR can create healthier, more productive environments where employees feel valued and respected.