The expensive habits we can't seem to break

This article was first published in the latest edition of People Matters Perspectives.

Companies are still making the same talent and culture mistakes — and the bill is getting bigger every year.

In candid conversations with the most perceptive minds in talent—CHROs from global conglomerates, people leaders at fast-scaling startups, and culture architects who have shaped award-winning organisations—a striking truth emerges. Year after year, the same admission quietly surfaces. It rarely happens in public forums; instead, it’s whispered in private corners, perhaps late in the day when the real stories are told and defences are finally lowered.

“We know exactly where we stumble,” one CHRO told me. “The real challenge isn’t awareness—it’s finding the conviction to change.”

That confession lingers in my mind. It perfectly encapsulates the paradox of people and culture in 2026: We are awash in data, research, frameworks, and technology—never has the science of talent been more advanced. Yet somehow, organisations keep losing great people, undermining their own cultures, and stumbling into the same expensive traps—often while unveiling a shiny new strategy deck to prove the opposite.

Let’s call this what it is: a widening gap between what we know and what we do.

The numbers don't lie

The cost of getting this wrong has never been higher. A 2026 survey by Express Employment Professionals and Harris Poll revealed that the average cost of replacing a single employee has soared to $45,236—an increase of nearly $10,000 in just one year. For large organisations, the consequences are even more severe: 34% of companies with 500 or more employees now report turnover-related losses exceeding $100,000 for each departure. Half of all US hiring managers expect this trend to worsen in 2026—the third straight year of rising expectations.

Despite these staggering costs, Gallup’s State of the Global Workplace 2026 reports that only 20% of employees globally are engaged at work. This is not a statistical anomaly; it’s the lowest figure since 2020, part of a persistent, grinding decline. No number of town halls, pulse surveys, or communication campaigns has managed to reverse it.

The global cost of this disengagement? Gallup estimates it at $8.9 trillion in annual lost productivity. That is not a rounding error. That is a civilisational failure of management.

Mistake One: Treating culture as a communications exercise

The first and perhaps most persistent mistake is the conflation of culture with communication. Organisations invest heavily in articulating their values — the posters, the intranet pages, the onboarding decks — and then wonder why employees don't feel them.

Gartner’s 2025 Workplace Culture Survey underscores the heart of the problem: while a vast majority of employees assert that culture is central to their work experience, there is a pronounced gap between those who value culture and those who feel their organisation’s culture genuinely supports their wellbeing. This gap cannot be bridged by messaging alone; it is a function of delivery. 

Culture is not what is written or said—it is what is consistently lived. It shows up in the everyday moments, especially when challenges arise, and employees observe how their managers respond.

The organisations that truly get this right are not those with the most artful value statements, but those where leaders reliably embody the behaviours and principles they advocate—consistently, transparently, and especially when the pressure is on.

Mistake Two: Underinvesting in the manager layer

If there is one finding from research that should keep every CHRO awake at night, it is this: 42% of employees who voluntarily left their organisation say their manager or organisation could have done something to prevent them from leaving (Gallup, 2025). Not the market. Not a competitor's offer. Their own manager.

And yet, the manager layer remains chronically under-supported. Gallup's 2026 data specifically identifies declining manager engagement as a key driver of the overall drop in global engagement, noting that managers with larger spans of control are particularly at risk of disengagement themselves. We are asking people to lead teams of 15, 20, sometimes 30 individuals, often across time zones and hybrid arrangements, with minimal coaching, inadequate development, and performance metrics that reward output over people stewardship.

The 2026 COE Psychological Safety Study, spanning 47 countries, confirmed that inclusive leadership is the primary driver of psychologically safe environments and that such environments directly improve retention and organisational performance.

Professor Amy Edmondson of Harvard Business School has long argued that psychological safety is not a "nice to have" but the essential underpinning of high-performing teams. The data in 2025 and 2026 continue to validate her position. When senior leaders lack people skills, transformations fail. When managers lack the tools to have honest, developmental conversations, talent walks are needed.

Mistake Three: Confusing flexibility with autonomy

The return-to-office debate has consumed boardrooms and HR functions for the better part of three years. And while the arguments about collaboration, culture, and productivity are legitimate, many organisations have handled the conversation with a bluntness that has cost them dearly.

Gartner's 2025 Return-to-Office and Hybrid Work Trends study found that many employees indicated a mandatory return-to-office would make them consider leaving. Gartner's 2026 Future of Work analysis warns that organisations that fail to embed flexible work options risk losing up to 15% of their critical talent.

The mistake here is not the policy itself. It is the manner of its imposition. Employees are not simply asking to work from home. They are asking to be trusted. They are asking for autonomy over how they deliver results, not just where they sit. The organisations that have navigated this well have done so by co-creating norms with their people rather than dictating them from the top.

Mistake Four: Neglecting career development until it's too late

Employees, particularly those in the first three years of tenure, leave not because they have found a better salary, but because they cannot see a path forward.

Deloitte's 2025 Global Human Capital Trends survey, which polled nearly 10,000 business and HR leaders, found that personalised, modular approaches to development and recognition significantly outperform generic programmes in driving engagement and loyalty. The shift from one-size-fits-all learning to laser-focused skill development — aligned to the specific needs of the individual, the role, and the industry — is not a luxury. It is a retention imperative.

And yet, many organisations still treat L&D as a cost centre to be trimmed when budgets tighten. The irony is that the cost of not developing people, measured in turnover, disengagement, and lost institutional knowledge, far exceeds the investment required to do it well.

Mistake Five: Mistaking silence for satisfaction

Perhaps the most dangerous mistake of all is the one that is hardest to see: the assumption that because people are not complaining, they are content.

McKinsey's 2025 talent risk analysis reports that voluntary turnover has risen to roughly 20% of the global workforce, driven significantly by perceived cultural toxicity, lack of purpose, and weak leadership. Organisations with high-toxicity cultures experience attrition rates two to three times higher than the benchmark. And Deloitte's 2026 Human Capital Trends highlights a surge in "loud quitting" — public resignations and vocal criticism. Research says one in five departing employees is now posting negative workplace narratives on social media, amplifying reputational risk and accelerating further talent loss.

The phenomenon of "quiet cracking" — a persistent state of workplace unhappiness that leads to disengagement and poor performance before an eventual exit — is estimated to cost companies $438 billion in productivity losses annually (Gallup, 2025). These are not employees who have given up overnight. They are employees who gave signals for months, sometimes years, that went unheeded.

What needs to change

The talent leaders I most admire are not the ones with the most sophisticated frameworks. They are the ones who have the courage to act on what they already know.

They invest in their managers — not just through training programmes, but also through reduced spans of control, coaching, and the psychological safety to admit when they are struggling. They treat career development as a strategic priority, not an annual review box-tick. They listen to their people not through annual engagement surveys, but through continuous, honest dialogue. And they understand that culture is not built in the boardroom — it is built in the daily interactions between a manager and their team.

The data is unambiguous. The cost of inaction is quantifiable. The solutions are not mysterious.

The only question that remains is whether organisations have the will to stop doing what they know is wrong and start doing what they know works.