The Cost of Workplace Bullying

by Jul 21, 2012

The Orlando Business Journal cited an estimated cost of $180M in lost time and productivity to American businesses each year. The Workplace Bullying Institute estimates between turnover and lost productivity a bully could cost a Fortune 500 company an astounding $24,000,000; add another $1.4 Million for litigation and settlement costs.

Direct income loss is very real when it comes to a workplace bully. Here are some items to consider when calculating the cost of the bully in your organization:

· Distraction from tasks on the part of the victim, bully and witnesses
· Reduced psychological safety and associated climate of fear
· Loss of motivation and energy at work from victims and witnesses
· Stress induced psychological and physical illness
· Possible impaired mental ability
· Prolonged bullying turns victims into bullies
· Absenteeism and turnover (30% of the bullied will quit, and 20% of witnesses will follow)
· Time spent at work looking for different work
· Time spent at work talking about being bullied instead of working
· Time spent at work by others gossiping about the bully and his or her behavior
· Time spent by other employees and management calming and counseling victims
· Time spent by management appeasing, counseling or disciplining bullies
· Time spent soothing victimized customers, suppliers and other key outsiders
· Time spent reorganizing departments and teams
· Time spent interviewing, recruiting, and training replacements for departed victims, witnesses and bullies
· Pertinent information not provided to victims in order to do their job effectively and efficiently
· Lost customers who were victimized the bully and took business elsewhere
· Lost customers who heard about the bully from unhappy former customers and took their business elsewhere
· Management burnout, leading to decreased commitment and increased stress
· Anger management, communication, leadership and other training
· Legal costs for counsel
· Settlement fees and successful litigation by victims
· Settlement fees and successful litigation by bullies (e.g., wrongful termination claims)
· Health insurance and workers compensation costs as a result of stress

(Note: A portion of this list was taken from The No Asshole Rule by Robert Sutton, PhD, professor at Stanford University.)

Here is an example of how to calculate total costs of a bully in your organization.

Figure out time spent by:

· bully’s direct manager counseling bully: 80 hours, $8,000
· victim’s direct manager counseling victim: 150 hours, $15,000
· witnesses counseling victim: 100 hours, $6,000
· HR talking with managers, bully and target: 10 hours, $1,500
· HR talking with Executives about the problem:5 hours, $1,500
· HR recruiting and training replacement of victim employee; $40,000
· team and department members training new employee: 160 hours, $10,000
· actual costs (advertising, temp agency): $1,000

Estimated total cost of bully: $83,000

Do not forget to factor in the potential income loss. It is difficult to calculate specifically how much of your total return is affected by the workplace bully because so many factors are involved, but it is certainly something you want to pay attention to. Here are a few examples.

A study published in the Journal of Organizational Excellence (2006) by Watson Wyatt, a global consulting firm focused on human capital and financial management, indicated that companies who focus on effective internal functioning and communication enjoy a 57% higher total return, 19% higher market premium, are more than 4.5 times more likely to have highly engaged employees, and are 20% more likely to report reduced turnover, when compared to competitors who demonstrate ineffective communication practices.

GreatPlaceJobs, an innovative online job board that only allows award winning companies to post openings, conducted a study that indicated these “great” workplaces earn approximately 30% more revenue and have 10% higher stock prices when compared to competitors who have not won awards for being a great place to work.

Remember, everyone has the right to a safe and healthy workplace.

Do you know how much money chronically bad behavior costs your company? Spoiler alert – it’s a LOT higher than you want it to be. Download our data and worksheet to see how it’s costing your organization and what you can do to fix it.

 

About Catherine Mattice

Catherine Mattice, MA, SPHR, SHRM-SCP is President of consulting and training firm, Civility Partners, and has been successfully providing programs in workplace bullying and building positive workplaces since 2007. Her clients include Fortune 500’s, the military, several universities and hospitals, government agencies, small businesses and nonprofits. She has published in a variety of trade magazines and has appeared several times on NPR, FOX, NBC, and ABC as an expert, as well as in USA Today, Inc Magazine, Huffington Post, Entrepreneur Magazine, and more. Catherine is Past-President of the Association for Talent Development (ATD), San Diego Chapter and teaches at National University. In his book foreword, Ken Blanchard called her book, BACK OFF! Your Kick-Ass Guide to Ending Bullying at Work, “the most comprehensive and valuable handbook on the topic.” She recently released a second book entitled, SEEKING CIVILITY: How Leaders, Managers and HR Can Create a Workplace Free of Bullying.

Free Webinar: Unlock Your Managers’ Leadership Potential

Being good at your job doesn’t make you good at managing people. You know this.  You also know the outcome when an individual contributor moves to a manager role without receiving the right training – a struggling team, unclear expectations, conflict, disengaged...

5 Tools for Pitching Culture Change to Leadership

You already know that a strong culture leads to engaged employees, lower turnover, and a healthier bottom line, but convincing leadership? That’s a different story. It's exhausting pushing for changes that are dismissed as “soft skills” or shot down because they don't...

Why leadership’s ‘Hands-Off’ approach to culture is costing you more than you think

Picture this: you’re actively working to foster a positive workplace culture, but managers and leaders are adopting a 'hands-off' approach. At first, it seems harmless, even convenient—but beneath the surface, it's quietly wreaking havoc. Top talent? They're slipping...

Elections and Leadership: 3 Ways Your Reaction Can Impact Your Team

Election season tends to bring division and tension, and it’s hard to avoid. Even if you’ve reminded your team to steer clear of political conversations at work, it’s likely that the topic will still pop up here and there. The truth is, having employees with different...

You Have It All Wrong: 4 Ways Employers Can Successfully Influence Well-Being

Did you know that the World Health Organization (WHO) classified burnout as an occupational phenomenon? In other words, while leaders and HR tend to classify burnout as a personal failing, as evidenced in the way they tackle it with offerings of gym memberships and...

5 Tips You Haven’t Seen for Engaging Hybrid And Remote Workers

According to Forbes, one in five workers is working remotely and 98% of workers want to work remotely at least some of the time. Yet, despite the flexibility that hybrid and remote work offer, engagement is a major challenge. In fact, the 2023 State of Remote Work...

Measuring Onboarding Effectiveness: Key Metrics for Success

Having an employee orientation program is a great start. It usually involves getting paperwork signed, introducing new hires around the office, and providing some initial training. But are you truly onboarding your employees? Effective onboarding is more than just a...

Measuring Recruiting and Hiring Success: Key Metrics to Track

In the past, recruiting was often a "spray and pray" approach—posting job openings everywhere and hoping the right candidate would find their way to us, even faxing over their resumes. Thankfully, recruiting today is far more strategic, thanks to the internet and...

HR Ninja-ing: 9 ways to impact culture with $0 budget

Workplace culture is an uphill battle when the budget is tight or, worse, nonexistent. You’re expected to create a thriving, engaged workforce, but the reality is harsh: Gallup reports that only 32% of U.S. employees are engaged at work. Meanwhile, disengaged...

It’s Labor Day: Are you celebrating your workers or burning them out?

This last Labor Day should have been a day of rest—a chance for employees to recharge and reflect on the contributions they’ve made to their organizations. But for many workers, the reality was likely far from relaxing. A 2023 Gallup survey shows that only 32% of U.S....