What is the cost of bullying in the workplace?
12 December 2022 | 4 mins read
- HR resources
The true cost of bullying in the workplace – what is it?
Bullying in the workplace is a destructive force that can have far-reaching consequences for both individuals and businesses. It may seem like a trivial issue, but workplace bullying can create an environment of fear, distrust, and hostility—ultimately costing companies not only in monetary terms, but also with regards to company morale and productivity.
In this post, we’ll take a look at some of the financial and mental health costs associated with allowing workplace bullying to continue unchecked and discuss strategies that managers and HR professionals can use to prevent it from happening in the first place.
Financial cost of bullying at work
Financial costs include things like settlements and legal fees that may be associated with harassment or discrimination lawsuits, as well as lost wages due to decreased productivity. But the financial cost of workplace bullying is far greater than these direct costs — it can also lead to an increase in employee turnover, which can lead to higher recruitment and training costs for companies.
As of 2022, the average payout for a workplace harassment lawsuit leads to a settlement of around $50,000.
However, each harassment case is different and can cost companies greatly more. The financial cost of bullying in the workplace can be quite high, especially if a case is taken to court and results in large settlement amounts for those affected by bullying. Some of the largest recorded settlements for workplace harassment have been upwards of $3 million.
Other indirect costs include an overall decrease in morale and productivity from the rest of the workforce, which can lead to decreased profits. In addition, workplace bullying can also have an impact on customer satisfaction and trust, as customers may not be confident about working with a company that does not take these issues seriously.
Related read: Think you’re being harassed at work? Here’s how to verify
Mental health effects of workplace bullying
The financial cost of bullying at work is easy to see, as companies often have to pay out hefty settlements due to workplace harassment lawsuits. However, what is not so obvious are the long-term mental health costs and effects on employees who experience bullying in the workplace.
Beyond the financial cost of workplace harassment, there are also many mental health costs associated with bullying. Studies have shown that victims of workplace bullying can suffer from physical and psychological health issues such as anxiety, depression, insomnia, headaches, and even post-traumatic stress disorder.
In addition, those affected by workplace bullying can experience a decrease in their job performance and motivation due to the feeling of powerlessness and insecurity caused by the harassment. Employees experiencing harassment and mistreatment in their place of employment may also develop feelings of worthlessness, causing them to withdraw from their work and duties.
Preventing bullying in the workplace
Bullying in the workplace is a serious problem that can have long-term effects on both individuals and businesses. It is important for employers to take steps to prevent bullying from occurring in the first place, as well as address any issues of harassment promptly when they do arise.
Managers should take time to create an environment of respect and understanding and make sure that employees feel safe to speak up about any issues they may be facing. HR staff and supervisors have an obligation to be proactive in addressing workplace bullying, as well as investigate any complaints of harassment or discrimination.
By creating a workplace culture that encourages open communication and respect, employers can help to prevent bullying and foster an environment of positivity and productivity. Not only will this reduce the financial cost of workplace harassment lawsuits, but it will also help to protect employees’ mental health and overall wellbeing.
Related read: 10 biggest startup mistakes that cause new businesses to fail
It is also important for companies to have a set of clear rules and policies in place which address workplace harassment and provide guidance on how to handle incidents of bullying. Companies should also provide training sessions to their employees so they can learn how to recognize and respond appropriately to workplace bullying. Preventative tools like Konsistent can help employees monitor the words and behaviors of their colleagues in order to identify any potential issues before they become a major problem.
>> Download and try the Konsistent Chrome extension for free
Lastly, businesses should have an open-door policy in place so that employees can come forward with any issues they may be having related to workplace bullying. By taking these steps, companies can prevent the costs of workplace bullying from spiraling out of control and ensure that their employees feel safe, secure, and respected in their workplace.
The true cost of workplace bullying
It is clear that the true cost of workplace bullying goes far beyond the financial cost for companies. The mental health effects and suffering experienced by those affected can be severe, leading to long-term psychological trauma.
Companies have to be aware of the cost of bullying in the workplace—not just financial but also in terms of the lasting effects on employees’ mental health. By taking proactive steps to prevent bullying and create a safe and respectful environment, employers can protect their businesses as well as their employees.
Building a workplace that is free from bullying and harassment is the only way to ensure that everyone can benefit from a positive, safe, and productive work experience.