Paying the price for problematic behaviour in the workplace

In today’s world businesses are faced with paying a huge price if they let problematic behaviour in the workplace go unreported and unresolved. This is not only costing them financially, in literally billions of pounds, but also in potentially irreparable reputational damage.

If you’re a HR leader in a business that doesn’t get complaints of problematic behaviour then you might think this sounds far-fetched. But, our research report “Protecting your people” from October 2021 revealed some shocking figures from different sectors that showed worrying trends across them all in regards to problematic behaviour. Employees’ mental health, relationships with co-workers, absenteeism and presenteeism are all affected by bullying, discrimination, harassment and other workplace misconducts they have experienced or witnessed.

Sadly, for some businesses, it is not until they realise this is affecting staff turnover and profits as well as their public image, that they start taking notice and vowing to do better.

For example, BrewDog has been under fire in the past year as reports of bullying, harassment and other forms of misconduct against CEO James Watt and other senior employees were brought to light by a group of current and former employees calling themselves Punks with Purpose. 

And it has already caused some unrest among investors who worry about the future of their investments in the business if the toxic workplace allegations correlate to a dip in profits and some feel uneasy upon hearing about its toxic workplace culture. The Scottish government has also been urged to cut their funding to this fast-growing company.

Our research has shown that 86% of investors say if they had invested in a company that was then embroiled in a workplace bullying and harassment case, they would look to distance themselves as quickly as possible. Figures were also unsurprisingly high for those asked if they would invest in a company with a problematic workplace culture, involved in a public scandal, had a poor reputation or numerous NDAs with former employees.

James Watt has issued an apology to those who signed the letter and anyone else who was made to feel the same way. It was met with mixed reaction from Punks With Purpose. BrewDog has reportedly put measures in place to address the allegations and concerns since then, including conducting an independent review, asking staff to complete an anonymous survey, creating an Employee Representative Group and investing in mental health initiatives. 

However, a BBC Disclosure documentary entitled “The Truth about BrewDog” exposed more allegations by some staff members that contributed to its toxic workplace culture. These were dismissed by Watt as false rumours based on misinformation. He is also accused of trying to intimidate staff who took part in the documentary - especially those who contributed anonymously - and is said to be looking to launch legal action against the BBC.

Sadly, the drama surrounding BrewDog does not look like it is likely to subside anytime soon. Hopefully actions they have since taken to rectify some of the identified problems will be reflected in a more positive workplace culture in the future. But for a company that has experienced rapid growth since its inception in 2007, these bumps in the road to global craft beer domination haven’t helped their reputation, and they’re now pretty well known for having a toxic workplace environment.

It is still rare that a company is known to have suffered big losses in revenue or even faced collapse due to a damaged reputation but as the old saying goes, a company’s reputation can take a lifetime to build and seconds to destroy.

The once popular lingerie retail company Victoria’s Secret went into liquidation in July 2021 after being in administration since June 2020. While this was mainly due to the effects of the COVID-19 pandemic, allegations of misconduct throughout the business and other scandals surrounding the company’s history and marketing dogged them too. They have since had a major overhaul, including rebranding their marketing strategy, hiring a new CEO and have committed to spending $90 million on new DEI (diversity, equality and inclusion) policies.

The above tales of caution demonstrate that no company should risk not acting on problematic behaviour. Problems that are ‘swept under the carpet’ can easily come to light, and when they do the price businesses pay is higher than ever. In fact, in our survey of 1000 employees, the average payout given to employees who faced problematic behaviour at work was £381,350. 

The highest payout for disability discrimination and thought to be one of the biggest tribunal settlements in the UK was £4.7 million in April 2020. The claimant - a former employee at NatWest - suffered severe depression and psychosis after years of being bullied due to a disability which occured on the worker’s first day in a new job. Then in May 2021, a former employee at Kellogg Brown & Root was awarded more than £2.5 million in damages for disability discrimination and unfair dismissal. This was the second largest ever disability discrimination award.

NatWest are also once again at risk of more reputational damage as they’re currently facing huge reparations for a former employee who lost her job while going through cancer treatment - she is currently anticipated to win more than £2 million in compensation.

But while financial settlements are a positive, 65% of people who receive compensation say it does not make up for the emotional distress they suffered. And on average, respondents had to pay £1,629 out of their own pocket for counselling, therapy and legal fees. Our research showed that a staggering 55% of people we asked confirmed the emotional distress lasted one to two years and 34% of them said three to four years. 61% have had to take a long-term leave of absence due to workplace bullying or harassment and 64% say it has negatively impacted their mental health.

As our research proved, employees who have experienced toxic workplace culture often become less productive and less engaged at work. Those who take time off work, experience mental health problems or decide to leave their job due to problematic behaviour in the workplace can cost companies more time and money to cover absences, pay for therapy or employee workshops, or hire and train new employees than it does to make sure these problems do not happen in the first place.

Absenteeism reportedly equates to 18.9 million lost working days a year and the Royal & Sun Alliance believes job turnover costs the UK economy £18 billion annually. Meanwhile, mental health charity Mind say the UK’s presenteeism problem costs employers between £26 billion and £29 billion annually through lost productivity.

You can read more about our tips for preventing employees from leaving their job due to problematic behaviour in our LinkedIn article here .

Advice we recommend that can help prevent workplace bullying, discrimination and harassment before the problems rack up costs and cause damage to your company’s reputation and public image are:

  • Make sure policies about misconduct are thorough and ensure the disciplinary procedures against those who are alleged to have breached them are carried out, either internally or externally if necessary. Ensure all employees know the consequences of breaching the policies and that no-one will be exempt from disciplinary action
  • Have an anonymous reporting system in place that employees can use to report workplace misconduct. Employ or delegate specific people within the company or the HR team to deal with the incidents and collect data so you can understand the issues your employees face should be paramount
  • Reviewing and shaking up HR teams is a recommendation when statistics from Cezanne HR show 47% of employees aren’t sure or wouldn’t trust HR to help them manage conflict with another member of staff and less than 50% of respondents trust HR to act impartially
  • Having DEI and other ESG-related roles within companies fulfilled by people who are passionate about changing workplace culture can really help employees who are unhappy at work or feel their voices, especially if part of a minority group, are not listened to or valued
  • Regular employee satisfaction and wellbeing surveys can help uncover any problems or potential solutions to creating or maintaining a happy and productive workforce and a safe and inclusive workplace. However small the percentage of your employees who aren’t satisfied is, investigate further on why that is the case
  • Carry out periodic workshops and training sessions on different issues and protected characteristics that are the root of many problems between employees in the workplace. From race equality to LGBT+ inclusion, from gender-based violence to disability awareness, and from cultural education to mental health initiatives, these can benefit everyone and empower those who are often the minority in workplaces
  • Admitting wrongdoing on your company or employees’ behalf when your public image and reputation is damaged is sensible and should be an opportunity to show your commitment and willingness to improve

To see how Culture Shift’s award-winning reporting system can help your company improve your employees’ trust in you, increase their satisfaction and your workplace culture, as well as reduce absenteeism and presenteeism, book a free demo with us now.

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