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The Financial Cost of Bullying and Harassment

Can Your Company Afford the Price of Bullying and Harassment?

The financial cost of bullying and harassment claims can be staggering. I recently came across a White Paper I wrote several years ago titled, “The Not-So Hidden Costs of Disrespect at Work.”

And since bullying and harassment are still to this day, unfortunately, an ever-prevalent topic of discussion, I have decided to rehashthat paper today.

It began with these two paragraphs:

If you are sitting in the comfort of your office reading this article and the sign on your office door reads ‘Human Resources’, you’ll have a firm grasp on the hard numbers involved when you are dealing with a complaint in respectful conduct: a harassment or bullying complaint.

Issues between two employees need to be dealt with effectively.  If not, when that issue eventually walks in through your door as an official complaint, you might want to alert the comptroller, as your budget is about to be hit. And hit hard.

As if the health and wellness of your employees isn’t reason enough to adopt a strong bullying and harassment policy, any hard-nosed business person would get on board when considering the financial implications.

Avoid the Financial Cost of Litigation – Use Prevention Instead

There is implicit importance of being proactive with regards to healthy workplace relationships, before a complaint arrives on your desk.

Let’s stop and consider how that money is lost by reviewing the negative effects bullying and harassment can have on an employee’s productivity:

  •  Work effort is intentionally decreased
  • People are not willing to spend more time at work
  • Intentionally decreased work quality
  • Loss of time worrying about the situation
  • Loss of time avoiding the perpetrator
  • Reduction in work performance
  • A decline in commitment to the organization

Although there are no dollar signs next to each of these effects, I’m sure you can imagine the cumulative amount of financial and emotional damage that these sorts of results will inflict on an organization.

Relevant Research

Since I love research, I found a scholarly article to share with you from the UK titled The Costs of Workplace Bullying.

Although the statistics quoted are from 2007, they are still massively disturbing.

  • According to the most recent UK Office for national Statistics data (2007) the median weekly pay for full-time employees in the UK is £457 ($781 CAD). If the working week is five days, then the dailypay is £91.40 ($156 CAD).

The report’s authors provided figures for the absenteeism, employee turnover and productivity costs of bullying in the UK. The total cost of bullying for organizations in the UK in 2007 can be estimated at approximately:

Absenteeism:                £3.06 billion ($5.23 billion CAD)

Turnover:                       £1.55 billion ($2.65billion CAD)

Productivity:                  £9.14  billion ($15.65 billionCAD)

Total cost:                      £13.75 billion($23.51 billion CAD)

That is a number that will get everyone’s attention.

By the way, none of these numbers include the costs of managing complaints and conducting investigations.

Is Your Company Culture Toxic?

It’s not just the employees involved in the bullying and harassment situation that are affected. The entire company will suffer at the hands of the negative environment that has resulted. After all, we know howcontagious bad vibes are…

Case-in-point, after a recent Respectful Workplace session, a participant shared a story with me about such an environment. He had left an a previous employer because of a culture filled with bullying and harassment, with no appetite to change. This wasn’t what he initially saw when interviewing, but below the surface, it was the norm at the company.

He was clearly upset by the experience, and, unfortunately, his story is not unique.

I have come across many-a-story of someone finding the perfect position at the seemingly perfect organization, only to leave because of the toxicity of the company.

And while it may seem obvious to leave such a place, most people don’t for a number of reasons. Why should anyone feel trapped in such an environment? And more so, how is it that these workplaces continue to exist?

I feel that a major reason is a lack of accountability.

We Work in the Community We Create

As I’ve mentioned in a previous post, I ask participants in our Respectful Workplace workshops to look at their offices as if they are a ‘community’they live in. In that community, I invite them to implement a neighborhood“Block Watch Program,” with the idea to look out for their fellow “neighbor” and report anything that looks out of place or suspicious.

Creating a workplace that feels just as safe and welcoming as your home, will help stave off bullying and harassment. When your colleague is respectful to you and looks out for the greater good of the “community,” a positive energy will spread, the sun will shine, and a double rainbow will envelop the office!

Okay, maybe I got a little carried away, but to experience a work environment free of toxicity is a welcome site for anyone. And, you’ll find that those negative effects mentioned earlier will be reversed—commitment, creativity, and performance will all increase.

But if you happen to live in one of those “bad neighborhoods,” especially if you’re in sight position, I want to share a news story that comes to mind:

Nova Scotia Health Authority

Dr.Gabrielle Horne was awarded 1.4 million dollars as aresult of the workplace bullying, she suffered at the hands of her senior colleagues within the Nova Scotia Health Authority.

That’s not just money lost here and there from a lack of productivity…and (keeping with my “Block Watch” analogy), it can happen in your neighborhood.

I realize that getting your workplace on board with such an accountability program won’t happen overnight. It will take a lot of effort and a good amount of time.

But I’d take hard work over the possible costly alternative any day.

2018-12-12T08:11:06+00:00

About the Author:

Phil Eastwood is a former London Bobby who brings a thirty-five year career in policing to his role as Senior Partner of Fiore Group Training, a recognized leader in training top North American organizations. Phil is lead author of workplace training courses in respectful workplace training, workplace violence employee training, and leadership training seminars.