Can Your Company Afford $22,500 in Lost Productivity…Per Employee?

Over the weekend, I came across an interesting article in the Harvard Business Review titled, Why We Fail to Report Sexual Harassment. The article addressed the fact that despite employer efforts to train staff and investigate complaints, the majority of employees affected by harassment, whether victims or bystanders, do not report the incidents.  That fact did not surprise me. Nor did the fact that 75% of the women they interviewed stated that they had at some point been sexually harassed at work. What did get my attention was this:

Researchers estimate that sexual harassment costs organizations $22,500 a year in lost productivity for each employee affected.”

Let’s look at an example. In this case, there is a company with corporate headquarters in the front half of the building and manufacturing in the back. At the entrance to a testing section in a back area that is predominantly male, there is a poster of a seductively posed woman, with very little clothing. Managers rarely have a need to enter this small area and have failed to notice or decided that this is not harmful. What they do not realize is that there is a female working in shipping that enters that area daily and she is quite uncomfortable. One day she asked the Lead in the testing area to take it down. He responded by laughing and making a loud comment that “The boys need a reason to come to work, but if you would give us a picture of you to look at, we’ll take the other one down.”

Based on the findings of the study, this employee is likely to experience stress each day when she needs to go into that room, become sick more often and miss work, lose interest in doing her job well in order to progress with the company, and spend additional time each day doing other things to keep her mind off of work. Yes, over a year that could easily amount to $22, 500 in lost productivity.

However, this is not where it stops. If this employee is experiencing that type of harassment, she will likely talk about it with 2-3 other employees who then are likely to feel uncomfortable as well. And then we need to consider the employee from Quality Control that goes into the work are daily. And the fill-in tester that works in the room at least once per week. And the Accounting Clerk that goes into that area to check serial numbers. That’s six additional employees – with a total productivity loss of $155,500 per year. And this does not take into account the cost of replacing these employees when they decide to leave.

When you look at the monetary effect of harassment in the workplace, it becomes very clear that companies need to take a more active role in preventing harassment from happening. Here are a few ideas.

  1. Make sure managers are walking around and interacting with all of their direct and indirect reports on a regular basis.
  2. Establish and communicate clear rules against posting of pictures, sending improper emails, or using unacceptable language in the workplace.
  3. Enforce the rules at all levels.
  4. Investigate – Not just when a complaint arises, but anytime there are signs of harassment in the workplace.

Remember, the law holds employers accountable when they knew, or should have known, that harassment was taking place.

When it’s time to investigate, www.GoInvestiPro.com!

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