A new workforce study from Businessolver finds continued tension playing out inside today’s organizations: CXOs in toxic cultures are delivering significant financial growth results at nearly 2 times the rate of C-suite peers in non-toxic cultures.
The 2026 State of Workplace Empathy study uncovers a growing gap between business performance and employee experience—one that may take time to surface in retention, employer brand reputation, and long-term financial outcomes.
Businessolver, through research partner Edelman Data & Intelligence, surveyed 300 CXOs (including CEOs, CHROs, CTOs, and CFOs) and 1,000 employees across 6 industries. Now in its 11th consecutive year, the workplace survey on empathy has connected with over 26,000 total employees since 2005.
This year’s report suggests companies are performing well at the demise of company culture. Some of these highlights include:
- 70% of CXOs in toxic cultures report significant financial growth, compared to 36% in non-toxic organizations—nearly 2 times the rate of growth in past 12 months
- 40% of employees say their workplace is toxic, rising 18 percentage points year over year (YOY) alongside 33% of CEOs, up 25 points YOY
- 33% of employees and 34% of CXOs report coworker intimidation
- 73% of CXOs in toxic cultures report coworker intimidation
Despite these dire trends, trust hasn’t broken down, yet. Overall, 66% of employees convey trust in their leaders, but ironically trust rises to 80% in organizations employees describe as empathetic yet also toxic. That combination—strong performance, high trust, and worsening culture — suggests risk may be building quietly beneath the surface.
“When nearly three-fourths of CXOs in toxic organizations report significant growth, the short-term math starts to feel justified, sadly,” said Jon Shanahan, President and CEO of Businessolver. “But our data suggests intimidation is rising, psychological safety is eroding, and two-thirds of employees would take a pay cut to work somewhere more empathetic. What concerns me is a looming crisis around employee retention, employer brand reputation, and eventually declining financial performance. This should be a wake-up call for companies who care about the long-term health of their organizations and people.”
While most leaders believe in empathy—and rate themselves highly—they are failing to act on it. How executives responded:
- 90% of CXOs say empathy improves financial performance and reduces reputational risk
- 98% of CXOs say they’re empathetic leaders, rising to 100% among CXOs in toxic cultures
- CXOs in toxic cultures are up to 1.7 times more aware of employees’ growing need for support outside of work (such as food, housing, and transportation)
Still, that belief in empathy isn’t showing up in how organizations operate today. CXOs in toxic cultures are 2.6 times more likely to report layoffs and 2 times more likely to report cuts to employee benefits, demonstrating aggressive cost control behaviors—all decisions that directly impact employee experience. Businessolver describes this gap as the “empathy paradox:” Leaders see themselves as empathetic, while making decisions that deprioritize and push empathy aside.
The new data also reveals how leadership is reshaping their decisions in the face of pressure to grow the bottom line, particularly as organizations invest in AI and drive efficiency: Nearly 30% of CEOs say their primary motivation for AI investment is cost savings through headcount reduction.
Businessolver’s State of Workplace Empathy report also identifies key risks to putting performance first and dealing with consequences later. Data that supports this:
- 66% of employees say they would accept lower pay for a more empathetic workplace, rising to 73% of employees in toxic cultures
- Coworker intimidation could be a culprit behind toxicity with employees in toxic cultures 3.6 times more likely to feel intimidated by coworkers versus employees in non-toxic organizations
“These are slow-moving risks with potentially long-term business consequences for organizations employees perceive as toxic,” Shanahan said. “They show up in people before they show up in profits.”
The full 2026 State of Workplace Empathy study is available here: www.businessolver.com/workplace-empathy
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