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.

Can a Wage Increase Make Employees More Productive?

In California, the upcoming minimum wage boost for fast food workers to $20 starting April 1st has ignited discussions about its potential influence on worker productivity.  Currently, the median hourly wage for fast-food workers in the U.S. is $13.43, while in...

Why Every Leader Needs to Worry About Toxic Work Culture

Employees quit their jobs for different reasons, and a major one is because of a toxic workplace environment. In fact, researchers discovered that between April and September 2021, toxic culture was the main reason why employees decided to leave their jobs. A toxic...

Civility Partners at 15 Years!

2024 marks an incredible milestone for us—our 15th-anniversary celebration! Yes, you read that right—15 years of making a positive impact on over 270 organizations served, thousands of employees, and millions of people worldwide! Thanks to the vision of our founder...

Driving Organizational Success Through Behavior Change

How can you make your workplace more exciting and successful?  Organizational success is not solely dependent on strategies or cutting-edge technologies. Instead, the key driver of success lies within the organization itself—specifically, within the collective...

How Much is Your Culture Costing You?

Creating a positive workplace culture isn't just a nice-to-have; it's a key player in the success of any business. It goes beyond token gestures like wellness days and promotions; it's fundamentally about how you treat your people, the support you extend to your team,...

Are you bamboozled by your company’s culture?

Your first day at a new job is a lot like embarking on an adventure. You step through the doors, eager and optimistic, your mind filled with expectations set by the promises of the company’s values and mission. For some, these principles are more than just words on a...

The Brave Leader’s Edge: Vulnerability in Leadership

How many times have you cried in front of your team? How many times have you admitted to not having all the answers or feeling unsure about the direction ahead? In the traditional realm of leadership, these instances might have been considered taboo or signs of...

3 Organizations that are Combating Technology-Facilitated Abuse

The reach of technology is astonishingly broad. It's awesome how it brings us all closer, but when it's not handled well, it can cause some serious problems too. From monitoring phone conversations to tracking someone's every move through GPS, access to emails, texts,...

Five Essential Tips for Effective Workplace Communication

Effective communication is like the secret sauce that makes a workplace go from good to great. Whether you're a team player or steering the ship as a leader, honing your communication skills is a game-changer. According to Grammarly, poor communication in the...

Craft a Thriving Culture for 2024 and Beyond!

The turn of the year often marks a time for personal resolutions, but what about resolutions for the workplace? According to Gallup, employee engagement in the U.S. saw its first annual decline in a decade -- dropping from 36% of engaged employees in 2020 to 34% in...