Bullying in the workplace is a large and costly problem for businesses. According to a new report prepared by consulting firm Executive Confidante, bullying in the workplace is costing organizations worldwide millions of dollars in turnover, absenteeism, decreased productivity, retaliation, and more. The report, Bullying Bosses: A Full Cost Accounting, provides an extensive summary of the available research, helping organizations see the true costs of turning a blind eye to this pervasive problem.
“Many companies have no idea of the full financial impact of abrasive leaders,” says author Kalli Matsuhashi, owner of Executive Confidante. “Often, these leaders are strong performers, and organizations are highly resistant to confronting these behaviors for fear that the individual will leave. The truth is, the hidden costs likely outweigh the financial benefit to a company’s bottom line.”
The report examines the prevalence of workplace bullying, and details the wide range of its negative impacts. The report also quantifies to the greatest extent possible the costs of turnover, reduced productivity, decreased morale, increased stress, absenteeism, collateral costs to management, etc.
Bullying in the Workplace
According to the Workplace Bullying Institute’s 2010 survey of workplace bullying in the United States, 50% of employees have either experienced directly or been a witness to workplace bullying. Despite the pervasiveness of the problem, very little is typically done within organizations to address the issue. In part, the report says, this is due to the fact that there is no legal imperative to address the issue. Workplace bullying or harassment is not illegal as of 2014–at least not in the United States. The report notes that several countries around the world have adopted laws allowing litigants to sue for harassment that causes physical or emotional harm, and similar legislation is being considered by more than a dozen states in the U.S.
Key findings of the report: Bullying in the Workplace
Turnover costs: The cost of replacing employees who leave because of bullying for a company with 10,000 employees and annual revenue of $500 million is $36.1 million dollars. This conservative estimate results in a cost that is just over 7% of annual revenue.
Disruptive behaviors in healthcare: In a 2008 study by the Veterans Health Administration West Coast, 77% of the nurses and physicians surveyed reported they had witnessed disruptive behaviors in physicians, and 65% had witnessed disruptive behavior in nurses. Two-thirds agreed these disruptive behaviors were linked with “adverse events,” including medical errors. Twenty-seven percent agreed these behaviors were linked with patient deaths.
Reduced employee engagement and productivity: Companies with highly engaged employees outperform similar companies in their industries by almost 2.5 to 1. Workplace bullying reduces engagement and therefore productivity, contributing to these wide gaps in performance.
Stress and related negative health outcomes: Days off of work due to anxiety, stress, and related disorders is more than four times the number of days off due to injury and other kinds of illness. Workplace bullying results in anxiety, increased pessimism and cynicism, depression, and other negative outcomes, and is a large contributor to the huge cost of absenteeism–which can run into the several millions of dollars for larger companies.
The report also explores the costs of workplace bullying related to retaliation by targets, management time spent intervening in employee disputes, homicide, and suicide.
Bullying Bosses: A Full Cost Accounting presents research from a variety of academic, government, and public resources to provide managers and administrators with the data they need to fully grasp the wide range of costs attributable to workplace bullying. “These costs simply aren’t being seen in organizations, even though they are being incurred right beneath their very noses,” says Matsuhashi. “Looking to improve the bottom line? Address the issue of workplace bullying,” she advises.
Download a copy of the report Bullying Bosses: A Full Cost Accounting by visiting ExecConf.com.