The Cost of Ignoring Harassment in the Workplace

Dec 28, 2020 | Business Insurance

The definition of sexual harassment has expanded in recent years, and the risks to businesses which fail to prevent this behavior are increasing. Small business owners may feel like it is hard enough to keep a company going, much less constantly monitor the personal behavior of all of their employees.

However, the costs of ignoring harassment in the workplace may be very high. Employers risk losing employees, lower productivity, and lawsuits if they do not make a reasonable effort to train and supervise employees to prevent these illegal actions.

In the long run, preventative measures go a long way towards curbing inappropriate activity in the workplace. It is much easier and less expensive to prevent sexual harassment in your business than to deal with it after the fact.

Here are seven reasons why ignoring harassment in your company is a poor business strategy.

1. Negative Impact on Recruitment

Harassment can take many forms. It can be as subtle as referring to females as “chicks” or “babes,” or as pervasive as a chronic failure to promote women.

According to the federal government, it is illegal to harass someone who works for you, someone who works with you, or someone who applies to work for you because of that person’s gender. Making a pass at someone, conditioning advancement upon sexual favors, dirty jokes and groping are all types of harassment.

A culture of sexual harassment can damage existing and potential employees. If it becomes known in the community that male supervisors make passes at female employees, post explicit photos on the break room, or frequently make disparaging or sexual remarks, this can be construed as a hostile workplace.

If potential recruits learn that this is the kind of environment your organization runs, you may have fewer qualified women applying to work there. You may even have fewer applicants in general, because men and women both will be turned off if they hear the workplace is uncomfortable and unproductive.

If you want to attract employees who will be great additions to your team, you need to pay attention to sexual harassment and do what you can to prevent it from poisoning your place of work.

2. Failure to Retain Good Employees

If your workplace fails to discipline people who engage in sexual harassment, it will make other employees uncomfortable. Both the target of the harassment and others may feel unsafe, resentful, and distressed. They are more likely to start looking for other employment.

If you keep training good employees only to see them leave, you are losing money. It takes time and money to hire and train good workers. If someone you employ is harassing others, they are costing you money and depriving you of a productive workplace with efficient and effective employees.

The term ‘sexual harassment’ also applies to situations where someone is obligated to perform sexual favors in order to advance in the workplace. If you run an organization which allows supervisors to pressure underlings in this way, you are losing potential managers who might otherwise move up in your company. Many women and others will leave your workplace if they feel that promotions are only awarded for sexual favors, not merit.

3. Poor Reputation

If you get cited by the state or federal EEOC for discrimination violations, not only will you be liable for fines but you will suffer other damage as well. Your reputation will be hurt if you become known as a non-compliant employer.

Potential partners and customers may prefer not to do business with you. You may encounter obstacles when applying for loans and your insurance may go up. Charitable organizations may be unwilling to assist you if you have a record of discriminatory conduct, making you ineligible for grants and other assistance programs.

Besides hurting your standing in the community, damage to your reputation can really hit you where it hurts: your bottom line. It’s better to maintain good standing by implementing preventative measures so you can avoid this kind of lasting injury to your company.

4. Decreased Morale

Many workers, especially in tough economic times, do not have a choice but to remain in a workplace, even if they are uncomfortable. They may be unwilling to speak up if they’re being harassed because they are afraid to lose their jobs.

However, just because they stay does not mean they are good and efficient workers. In fact, low morale caused by a hostile work environment can cost an employer a lot of money.

A recent study by Harvard Business School found that toxic work environments can cost employers over $10,000 a year. Employees who are unhappy and unmotivated spend more time complaining, calling in sick, and leaving early than workers who feel valued.

When workers see that they are compensated for their efforts, not because of how they look, and when they feel equal to their co-workers and not singled out because of their gender, they work harder. They are more efficient and more productive. They want to do well, and that improves the workplace and your profit margin.

It is up to you to instill a positive, non-discriminatory culture in your workplace. by improving morale, and ensuring that supervisors follow the rules against harassment and discrimination.

Consider implementing training for employees. It will instruct people who work for you about what the line is and how not to cross it. It will also make others feel good that you are taking positive steps to curtail bad behavior in your place of work.

5. Vulnerability to Law Suits

Besides exposing you to problems arising from human resource issues like retention and recruitment, sexual harassment in the workplace is illegal. It exposes you, the employer, to the risk of lawsuits from employees or job applicants who experience harassment. It may also expose you to government action.

If an employee feels like he or she has been subjected to harassment in your workplace, they may have a cause of action to sue you. Getting sued is a messy, expensive process. You may get tied up in court for a long time.

Details about your workplace may leak out that are less than flattering. Lawyers’ bills can be very high. All of the morale and retention problems listed above will get worse.

Even if you settle a sexual harassment claim, it could cost you a lot of money.

In order to manage the risk of getting sued by an employee, it is helpful to have a regular program of harassment training. Even if one of your employees acts inappropriately, you can show that you took measures to educate your staff on sexual harassment. You can show that you made it clear that it would not be tolerated in your workplace.

6. Risk of Government Investigation

Often the state or federal EEOC will get involved in claims of sexual harassment in the workplace. This raises the publicity quotient quite a bit. The US Equal Employment agency and/or its state equivalent may conduct an investigation, issue a report, and eventually demand that you pay compensation to the affected employees or make similar restitution.

If you ignore the actions of your managers or otherwise allow illegal behavior to take place in your place of employment without taking reasonable measures to stop it, your business will suffer in many ways. Being under government investigation usually never ends well.

7. Reduced Profits

If you are involved with an investigation or a suit, your attention will be distracted from your business. You will be less able to run your operation in a way that is profitable, Do you really want to let things get out of hand and endanger a business you may have worked for years to establish?

Protect your profits and your livelihood by taking preventative measures. Manage the risk of liability by disciplining people who do not follow the law. Provide staff-wide training so everyone knows what is and is not allowed during work. Set a strong example by treating all employees with respect, and expect your managers to do the same.

You can protect your business by putting these safeguards in place. Set up an HR office where employees feel safe to bring their concerns. Do not let illegal behavior continue and terminate people who violate your code of conduct.

By creating a safe and happy workplace, you will have a more efficient workforce. You will make more money, your employees will enjoy their jobs more and do better: everybody wins.

Ignoring Harassment in the Workplace: It Can Destroy Everything You Have Worked For

By ignoring harassment in the workplace, you do more than subject employees to illegal actions. You damage your corporate reputation. You deter good employees from going to work for you, and from staying with you for long productive careers.

By not doing anything, you are being more than passive. You are actively endangering your profits and viability.

Don’t fail to act. Be proactive by implementing training and education so everyone knows what is not allowed and what is cause for punishment. Make your employees feel safe, and they are more likely to do a better job for you. They will also be less likely to sue you!

For more information on sexual harassment training for your workplace, contact us.