Workplace and Mental Health: Building Effective Leaders by Enhancing Cognitive Behaviour Therapy Breaks the Toxic Work Culture

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By Marcelina Horrillo Husillos, Journalist and Correspondent at The European Business Review

The World Health Organization (WHO) estimates that mood disorders such as anxiety and depression cost the global economy $1 trillion per year due to lost productivity. Also, according to recent research from McKinsey, employee disengagement and burnout could cost a median-size company between $228 million and $355 million a year in lost productivity. Research by MHI and Business showed that, in the UK, the economic value of improved employee well-being could be between £130 billion to £370 billion per year, or from 6% to 17%of the United Kingdom’s GDP. That’s the equivalent of £4,000 to £12,000 per employee.

Toxic workplaces include stressful, unethical, cutthroat, disrespectful, non-inclusive, and bad competitive atmospheres. A toxic workplace can contribute to employee stress and burnout. Some employees may fight burnout by “quiet quitting” and doing the bare minimum in their jobs. Additionally, according to MIT Sloan’s recent study, “Culture is driving the Great Resignation,” a toxic work culture is the number one reason employees cite for leaving their jobs.

Given the research, it’s clear that employees who leave their roles desire a few fundamental elements: respect, safety, and growth. They want to be valued and empowered and are willing to leave if they don’t feel like they are. As Marcus Buckingham of Gallup points out, “People leave managers, not companies.” This raises the question: How can HR managers apply meaningful change if employees are more likely to leave due to inadequate leadership?

Over the past half-century, the efficacy of Cognitive Behavioural Therapy in the workplace has emerged as the preferred evidence-based treatment. For instance, a 2020 review of numerous academic studies by Deloitte found CBT sessions with a therapist to be a cost-effective way to help employees and employers manage issues in the workplace.

Toxic environment versus CBT

According to an MIT Sloan study, toxic culture was one of the main causes of the “Great Resignation,” where millions of employees quit their jobs to find a better work-life balance. This same study also said that toxic culture is 10.4 times more likely to predict a company’s turnover rate rather than compensation.

Toxic work environments can make employees feel undermined, rejected, guilty, defensive, and humiliated. Employees in a toxic work environment may be nervous to speak their minds, raise concerns, or share their thoughts because they are worried about being rejected or undermined. A toxic workplace can also lead to unethical behavior such as racism, lying, or making false promises. Bad management and co-workers often may promote or support a toxic environment.

Some of the symptoms that employees in toxic environments suffer from that have a great toll on their mental health are:

Lack of trust: management may not trust employees and constantly question everything they do. They may start to monitor them even in front of clients. Micromanagement typically makes employees doubt their abilities.

No room for mistakes: when fear of mistakes paralyzes employees, this is a sign of a threatening, often blame-heavy, environment, which causes employees to fear punishment for failures or mistakes.

Toxic competition: bad leaders may feel threatened if an employee shows better knowledge or expertise about a particular domain. The leader will try to dismiss or undermine the employee, which goes against company growth.

Gaslighting: Merriam-Webster’s word of the year for 2022, typical gaslighting tactics include undermining a person in meetings and excluding this person both directly and passive-aggressively. These make the person question their perceptions.

Lack of career prospects: management continuously gives false promises but keeps blocking any opportunity for professional growth, and the employee ends up feeling disconnected from the team.

To create a better employee experience and improve engagement and retention, management must first recognize the signs of a toxic workplace to combat the negativity. Smart employers are gradually addressing the mental health of their employees as a business imperative, and are thus leaning on partnerships with companies that provide workforce mental health programs to support their vision and strategy.

The use of CBT-based mental-health apps by employees of major corporations proves effectiveness outside the therapist’s office. Companies such as KPMG, Uber, Bank of America, Microsoft, and Salesforce all offer online CBT-based tools to their employees. Some organizations, and even national health systems such as the UK’s NHS, are experimenting with AI chatbots to deliver CBT. They are also offering mental-health first-aid training to managers and employees. In the United States, more than 3,100 companies have offered the training, which more than 3 million people have completed, according to the National Council for Mental Wellbeing. Companies that have offered the coursework include Bank of America, Gillette, Starbucks, and Unilever.

“People leave managers, not companies”

Leadership is not simply a hierarchical role, but a skill that can be explored and developed, and the leader’s personal experiences and maturity will influence their management. When employees experience mistrust, lack of psychological safety, anger, frustration, or stress, their amygdala takes over, impacting interpersonal functioning. The managing director’s struggle to regulate their intrapersonal functioning directly affects the team’s interpersonal dynamics. 

Leadership involves respecting your employees, making them feel secure, and considering their work. Just as refining any skill requires effort, intention, and self-reflection, effective leadership also demands a commitment to self-reflect and support your employees’ growth and development.

A study published by the Pew Research Center in March 2022 reports that 63% of employees left their jobs due to a lack of opportunities for advancement, while 57% left due to feeling disrespected at work. Between January 2023 and April 2023, around 3.85 million employees resigned each month, contributing to a steady turnover rate of about 2.5% due to resignations.

Replacing employees is expensive and time-consuming. It costs 33% of a worker’s salary to replace someone. In comparison, 36% of HR leaders don’t have the resources to recruit top talent. Additionally, 44% of companies fail to provide compelling career paths, even though 70% of workers gain a sense of purpose from their work.

CBT therapy utilizes cognitive-behavioral techniques and solution-focused models. Cognitive-behavioral techniques identify thought patterns that influence emotions and behaviors. These can provide employees and leaders with the tools to address these variables and build skills to reduce their impact on individuals, teams, and organizations.

A CBT-based approach can help individuals identify and challenge their negative thoughts and develop alternative, balanced, and often more realistic perspectives. It also equips managers to acknowledge, respond, and help change detrimental patterns towards their employees, which ultimately will result in a safe and positive work environment and company growth.

When current and future leaders have access to leadership development through therapeutic services such as CBT, they engage in self-reflection and can embrace their leadership skills. As Simon Sinkey states, “Leadership is a choice,” a skill we choose to develop and lean into. Leadership begins within the individual, and its benefits permeate the organization through team dynamics.


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