How is workplace bullying and harassment affecting your profitability?

It’s been suggested that workplace bullying could produce a decline in productivity of up to 40% - a huge hit for businesses looking to grow and evolve. Employers that are not looking at how to identify and deal with workplace bullying are putting their employees mental health at risk, as well as their profits.

So what's the overall cost of workplace bullying? What are the legal implications? What solutions are available for businesses to prevent bullying and also rehabilitate both bullies and victims? 

Costs for employers

Bullying has significant and proven psychological consequences, including stress, anxiety, doubt, and depression, to name a few. Understandably, employees who are being bullied are less likely to perform at work.

Think about it like this, assume we can all contribute 100% of our energy to work, if we're expending some of that energy in survival mode; worrying about passive aggressive comments, direct name calling, avoiding bullies, this slowly reduces our capacity to contribute positively to our work. 

This behaviour leads to an increase in absence and job turnover, which has been estimated to cost the UK 18.9 million lost working days each year. According to the Royal & Sun Alliance, this costs the UK economy around £18 billion annually.

Overcomebullying.org states 70% of bullied employees will leave the organisation. So what do we know about the costs of bullying for an employer?

  • Workplace bullying represents a distinct financial impact on a business, with implications for productivity, collaboration and turnover rate.
  • Similarly, there are high costs associated with training new employees, alongside the costs of arbitration and the potential of anti-bullying solutions, such as therapy, anger management courses or direct training. 
  • Management may find the company culture of a business is marred by workplace bullying, creating a poor working experience even for those who aren’t victims of bullying. 
  • Workplace bullying will contribute to poor client relations and create a negative view of the company, impacting future revenue opportunities.

Not only will employers experience these negative effects of workplace bullying, but there will also be direct impacts on employees as well. 

Costs for employees

The most serious impact for employees who suffer from corporate or workplace bullying is their mental health. Victims are more likely to suffer from depression and there are also highly physical outcomes to bullying. In one report, it was found that:

  • 76% of victims experienced anxiety and stress
  • 71% experienced disrupted sleep
  • 55% experienced stress headaches
  • 71% suffered from loss of concentration
  • 52% began to obsess over details at work

Victims will be less likely to focus, more stressed and, therefore, more likely to make mistakes. There will be blows to a person’s confidence, self-esteem and self-image. Each of these has a detrimental effect on the individual, their identity and their ability to be successful. 

In the worst-case scenarios, it's the victim who's punished for their declining productivity rather than the person doing the bullying. To rectify this, leaders need to take time to consider the causes of motivation declines rather than instantly penalising employees who begin to modify their performance. 

This will help employers deal with bullying directly, rather than focusing on the problems that occur as a result of bullying and poor workplace cultures.  

The best management teams will encourage those experiencing bullying to disclose what's going on. They will also implement anti-harassment policies in the workplace, policies that can accurately and effectively prevent bullying before it happens and reprimand those responsible.

Legal implications

If bullying carries on unabated, there’s the possibility of legal action. Under the Equality Act 2010, workplace bullying may count as harassment, which means employees can take legal action. Harassment may consist of:

  • Verbal abuse
  • Rude physical gestures
  • Offensive comments
  • Physical or sexual assault

An environment of harassment is one that's:

  • Hostile
  • Degrading
  • Offensive
  • Humiliating
  • Intimidating

Workplace bullying may also count as a type of discrimination, of which there are three related harassment types; harassment related to a protected characteristic such as race or sex, harassment related to unwanted conduct of a sexual nature, harassment related to ‘being treated less favourably’.

‘Being treated less favourably’ is where an employee is treated worse because they have rejected unwanted sexual behaviour or behaviour related to sex or gender reassignment. 

There is a lot of worthwhile information on the Citizen’s Advice page on discrimination at work for anybody looking to explore this more

Employees subject to bullying or harassment can take legal action at an employment tribunal, but this is usually reserved for severe offences that either haven’t or can’t be solved by internal processes. This will cause direct impacts to profitability as legal fees are paid and work is left undone. 

Digital solutions for employee wellbeing

Available for business today are solutions specifically designed to identify and prevent harassment and bullying in the workplace. Now, this does represent a cost, like any good digital solution, but will work to offset the cost of payouts if legal action is taken. 

Similarly, with a digital solution’s ability to provide insight regarding workplace bullying and take proactive steps to tackle these behaviours, there will be less chance of productivity loss. 

For example, did you know the average sum awarded to a discrimination claim is £26,000? This is a much larger sum than the cost of a digital solution. Cost aside, what can platforms such as these do?

  • Reporting: Increase incident reports, leading to more visibility over employee experience, safety and satisfaction.
  • Support: Employees suffering from workplace bullying or harassment can be adequately supported by meaningful and helpful content. 
  • Case management: Individual cases can be tracked with audit trails, status updates, triage handling and team management.
  • Real-time data: Trends can be spotted more rapidly so preventative measures can be taken in good time. 
  • Training: New strategies for addressing and preventing incidents can be developed as staff are trained.

Today, identifying the actual cost of bullying and harassment is difficult, but not impossible. Calculating risk and the ROI of preventative solutions is a real and worthwhile measure to take to begin improving the working environment within a business.

So, where do you begin?

For more information on the common challenges faced by organisations today, challenges caused by bullying, harassment and their effects on the day-to-day running of your business, speak to one of our passionate and experienced specialists.

How much could workplace bullying cost you?

Our free financial risk calculator is designed to calculate the risk your business could be facing from workplace bullying and other forms of negative company culture. Try it today. If you'd like to understand how to reduce the risk to your business, contact our team.

Calculate your risk

Keep in touch

Sign up to our newsletter to receive monthly insights and resources.