Company culture doesn’t collapse overnight. It erodes gradually through overlooked patterns, communication breakdowns, and unmet employee needs. When left unchecked, these quiet failures lead to tangible consequences such as higher turnover, lower productivity, and widespread disengagement, all of which often stem from cultural issues leaders fail to recognise until it’s too late.
Richard Edwards, founder and CEO of Vibra Media, a U.K.-based digital public relations agency, has seen first-hand how company culture can make or break an organization.
“The signs of a failing culture are rarely dramatic,” he explains. “They’re the small frustrations that accumulate over time, such as the missed acknowledgements, the lack of clarity from leadership, or the sense that work-life balance is just a phrase on the website rather than a reality.”
Below, Edwards outlines the six warning signs that indicate your firm culture may be quietly failing, and what leaders can do to address them before the damage becomes irreversible.
1. Poor or inconsistent internal communication
When employees don’t know what’s happening in their own organization, trust begins to erode. Poor communication manifests in missed updates, inconsistent messaging from different departments, and a general sense that information is being withheld or filtered before it reaches teams.
“Communication breakdowns are often the first visible symptom of a deeper cultural problem,” says Edwards. “When leaders fail to share information clearly and consistently, employees fill the gaps with assumptions that are rarely positive.”
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2. Rising burnout due to disrespect for work-life balance
A firm might claim to value work-life balance, but if employees are regularly expected to answer emails at 10 p.m. or work through weekends, the reality tells a different story. Burnout happens when people have no control over their time.
According to CIPD research, 80% of those who have a formal flexible working arrangement say it has a positive impact on their quality of life. Yet it’s common for organizations to still treat flexibility as a perk rather than a necessity.
“If your team is exhausted and people are working through lunch or staying late every night, that’s not dedication, but a warning sign,” Edwards notes. “A healthy culture respects boundaries. It recognizes that sustainable performance comes from well-rested, engaged employees, not from people running on empty.”
3. Lack of transparency from leadership
When decisions are made behind closed doors without explanation, employees lose faith in their leaders. Transparency doesn’t mean sharing every detail of every decision, but it does mean providing context, rationale, and openness about the direction the company is heading.
“Employees don’t expect leaders to have all the answers, but they do expect honesty,” says Edwards. “If there are challenges, acknowledge them. If there are changes coming, explain why. Secrecy breeds suspicion, and suspicion destroys culture.”
4. Low recognition or reward for employee contributions
Feeling valued at work is about acknowledgement, appreciation, and recognition for the work people do. When employees consistently go above and beyond without so much as a thank you, they stop trying. Research from Perkbox found that 42% of workers feel undervalued, a statistic that speaks to how widespread this issue has become.
“Recognition doesn’t need to be expensive or elaborate,” Edwards explains. “Sometimes it’s as simple as acknowledging someone’s effort in a team meeting or taking the time to say thank you. When people feel invisible, they disengage.”
5. Increased turnover or turnover intent
High turnover is an obvious red flag, but turnover intent (the point where employees mentally check out even if they haven’t yet handed in their notice) is equally damaging. When good people start leaving, or when surveys reveal that a significant portion of your team is looking for other opportunities, it’s time to ask why.
“Exit interviews often reveal patterns that leadership has ignored,” says Edwards. “People don’t leave jobs. They leave managers, cultures where they don’t feel heard, and organizations that don’t align with their values.”
6. Micro-management or lack of trust in employee autonomy
Micro-management signals a fundamental lack of trust. When leaders feel they need to oversee every detail, approve every decision, and monitor every hour, it sends a clear message: we don’t believe you can do your job without constant supervision.
“Autonomy is one of the most underrated aspects of a healthy culture,” Edwards notes. “When you hire talented people and then refuse to let them do their jobs, you’re not just wasting their potential. You’re telling them you don’t trust them.”
How to rebuild a healthy firm culture
Recognizing the signs is only the first step. Rebuilding culture requires deliberate action and sustained commitment from leadership. Edwards shares his practical steps for turning things around:
- Improve work-life balance policies: Make flexibility a standard practice, not an exception. Ensure that leaders model healthy boundaries. If your senior team is sending emails at midnight, your employees will feel pressured to do the same.
- Increase recognition and reward systems: Create regular opportunities to acknowledge contributions, whether through formal programmes or simply making appreciation a daily habit.
- Enhance transparency in decision-making: Provide context and rationale for major decisions. Hold regular town halls or team meetings where employees can ask questions and voice concerns.
- Reduce micro-management: Trust your team to do their jobs. Set clear expectations and outcomes, then step back and let people work autonomously.
- Measure cultural health consistently: Use anonymous surveys, regular one-to-ones, and open forums where employees can share concerns. These provide insight into how your culture is really functioning.
“Company culture isn’t something you fix once and forget about,” says Edwards. “It requires constant attention, honest reflection, and a willingness to change when something isn’t working. The organizations that get this right are the ones where people choose to stay, not because they have to, but because they want to.”
Illustration credit: tommy/iStock
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