The Toll of Workplace Sexual Harassment

Sexual harassment has hit home. The scandals, lawsuits and damaged careers currently rocking the nation are not limited to Hollywood moguls. Elected officials and members of the business community are suffering the consequences of failing to eradicate behavior that has been illegal since 1964. 

If  ignored, sexual harassment festers like a wound in the workplace. It takes both a human and a monetary toll, which can be measured directly and indirectly.

Direct Costs

Millions of dollars in lawsuits.

Settlements range from high-profile cases like that of Fox News, which paid $13 million to five women associated with the Bill O’Reilly show and $45 million paid by 21st Century Fox in the first quarter of 2017 to settle allegations, to anonymous but still costly cases such as one in California, in which a physician’s assistant was awarded $168 million in a 2012 court case for punitive damages, mental anguish and lost wages.

Huge costs due to lost productivity.

Even as far back as 1988, according to an often-cited study, a typical Fortune 500 company with 23,750 employees loses $6.7 million a year from sexual harassment fallout in the forms of decreased productivity, absenteeism and staff turnover.

Higher Employment Practices Liability Insurance (EPLI) rates. 

According to the Washington Post, “U.S. companies spent an estimated $2.2 billion last year on insurance policies covering the legal fallout from sexual harassment, racial discrimination and unfair-dismissal accusations.” Once a company has been forced to settle a sexual harassment complaint — whether in or out of court — its premiums go up.

Indirect Costs

Severe damage to an institution’s image.

Uber, National Public Radio, The Weinstein Company, even Capitol Hill, have suffered deep hits to their reputations. Sexual harassment can “drive away customers, employees, and investors…Customers may avoid the company’s products...Investors could lose confidence, resulting in lower stock prices, a reduced access to capital, or even bankruptcy.” — Lynn Reaser, Point Loma Nazarene University

Ruined careers and reputations. 

Every day since the Harvey Weinstein scandal broke, at least one high-profile person has been accused of inappropriate sexual behavior. For most, it is proving nearly impossible to regain the trust of the public, employers and clients. And for victims of sexual harassers, fear of retribution can prove dangerous or intimidating, and so careers get derailed. 

An unhappy work environment. 

Last, but certainly not least, sexual harassment creates a hostile work environment in which employees suffer poor morale and a lack of trust in one another and in company leadership. A new study says 38% of women and 13% of men report being sexually harassed at work. Imagine if more than half (51%) of your workforce were chronically late, embezzled money, or had substance abuse problems. Wouldn’t you get to the bottom of why that was happening? Sexual harassment is no different. Like any toxic behavior, it must be understood, prevented, and dealt with swiftly.