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Harassment & Discrimination

The Effects of Sexual Harassment in the Workplace


By Josh Young Dec 01, 2016

sexual harassment touching

Sexual harassment in the workplace may be on the decline, but it is still an ongoing risk to the safety of your employees and your business. A single incident can have a far-reaching impact on your company's bottom line, undermine employee morale, and ruin your organization's reputation among consumers.

What Are the Costs of Workplace Sexual Harassment?

Financial impact

In 2015 alone, the U.S. Equal employment Opportunity Commission (EEOC) received over 6,800 claims of sexual harassment, resulting in 1,829 charges and $46 million in direct settlements. And there are 20 lawsuits that are still in litigation.

A study of 50 sexual harassment cases in Chicago that were settled before magistrate judges resulted in an average $53,000 settlement. However, these costs can increase dramatically if the case goes to trial. A study of 232 sexual harassment cases where the plaintiff won the case recorded an average payout of more than $217,000.

Concerned about the potential damage a sexual harassment claim could cause to your employees and business? Read our e-book: Strategies for Preventing Harassment in the Workplace to help keep that risk from becoming a reality.

Of course, these figures don't reflect any of the associated legal costs. So even those cases that result in no settlement to the plaintiff can still cost your business tens if not hundreds of thousands of dollars.

Employee health

According to research conducted at Cleveland State University, between 90 and 95 percent of women who have been sexually harassed experience debilitating stress reactions, including anxiety, depression, headaches, sleep disorders, lowered self-esteem and nausea. And one study found that the trauma and its fallout could even rise to the level of a diagnosable major depressive disorder (MDD) or posttraumatic stress disorder (PTSD).

Employee productivity

When an employee has experienced an incident of sexual harassment, or worse a steady campaign of harassment, their output will be affected. Research closely associates sexual harassment with job dissatisfaction and disengagement, routinely made visible by tardiness, absenteeism, project neglect and employee distraction.

One study of 262 women who had reported being harassed found that nearly 75 percent of them felt that the effects of the harassment undermined their job performance. In particular, these women cited decreased motivation to work and an inability to concentrate on their work due to the presence of sexual innuendos.

Ripple effects

Research suggests that employees that observe harassment in the workplace were more likely to experience lower psychological and physical well-being. The driving factors of this mental and physical toll were empathy for the victim, concerns about a hostile workplace, and even fears of becoming the next target of harassment.

Staffing problems

Employees are less likely to stay in a toxic environment, and research conducted by Rebecca Merkin and Muhammad Shah suggests that employee turnover is one of the largest costs associated with sexual harassment.

Replacing those leaving staff members can prove equally problematic. A 2008 study found that employees were less likely to work for a company with perceived sexual harassment. And an earlier survey uncovered that 58 percent of respondents who witnessed "unfairness" in the workplace in the last year would "to some degree" discourage potential employees from joining the company.

Market impact

Research shows that when consumers witness or are made aware of "incivility" directed at an employee within the workplace, these potential customers can develop "rapid, negative generalizations" which will make them "less likely to repurchase from the firm." The survey also found that employees that have experienced an "unfair" workplace will even actively discourage potential customers from purchasing products or services from their employer.

What Can You Do?

One of the principal means of combating and preventing workplace harassment is an effective training program. Sexual harassment claims reported to the EEOC peaked in 1997, and the next year, two Supreme Court rulings established a clear precedent that companies could reduce their risk of liability by establishing sexual harassment training and reporting policies. In response, training became much more commonplace, and related claims dropped steadily over the next several years with experts attributing at least some of this decline to the success of training efforts.

Further, this past summer, the EEOC released a study on harassment in the workplace that stated "training is an essential component of an anti-harassment effort." The report also advocated coupling these training efforts with a holistic program that incorporates leadership involvement and accountability.

Conclusion

The risks associated with a sexual harassment claim and associated litigation can present a clear, and present danger to your business. By being proactive, instituting sound policy and offering comprehensive training, you can reduce the likelihood of harassment even occurring.

To learn more about our sexual harassment prevention courses, you can fill out the form on the right to request a demo.

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