• Lauren Barker

What is the Cost of Harassment?

Proper harassment prevention training could save your business thousands per year in claims alone

Harassment in the workplace is something of an inevitability, and in many ways, it’s just as important to prepare for when it happens as it is to prevent it. What matters is that organizations need to invest serious resources in preparing for and preventing harassment, and the consequences for lack of preparation can be staggering. When left unaddressed, harassment can also have major financial ramifications.


Today, we’d like to answer the question “What does harassment in the workplace actually cost us?”


Costs to Businesses

Let’s start with the obvious costs here. The biggest financial cost for companies where harassment occurs is legal claims . . . and all the related legal costs that come with them. Settling a harassment claim out of court can cost employers between $75,000 and $125,000 in the process. That number is assuming the employer wins; if the employer loses the case, that total typically ranges from $175,000 to $250,000—but may even surpass $150 million in damages. These damages can include lost wages, vacation and sick pay, medical expenses (including counseling or therapy), and many other costs.


Lost time is another huge cost when it comes to harassment claims. When dealt with internally, these claims can take over nine months to resolve. When taken outside of the company, they can take even longer.


There are also indirect costs that businesses face when these claims arise. These can lead to financial costs that add up quickly and are difficult to calculate. They include:

  • Increased employee turnover

  • Decreased productivity

  • Low morale

  • Brand perception/reputation damage

  • Time lost in manager schedules

Overall, harassment claims are a big deal in terms of company resources that would be better invested in proper harassment prevention training.


Costs to Employees

Employees who experience harassment–aside from the obvious emotional, professional, and interpersonal impact of harassment–face major financial losses as well. These can be things like loss of job or unemployment, demotions, and loss of benefits. In this way instances of harassment and the fallout also contribute to the gender wage gap. Outside of work, these losses can include medical bills from seeking treatment for mental or physical health issues that arise due to harassment. Non-financial costs to employees suffering harassment include emotional pain, suffering, inconvenience, mental anguish, and loss of enjoyment of life.


There are also a number of factors that can prevent employees from seeking proper legal counsel. The biggest examples are: lack of support from their employer or fear of backlash for reporting, immigration status, and lack of funds for lawyers.


What can you do?

The best way to solve this problem for both employers and employees is to implement effective harassment training. Doing this will:

  • Prevent harassment by promoting best practices and outlining company policies

  • Encourage reporting from employees as well as accountability from the organization

  • Arm team members with the confidence they need to intervene when they witness harassment or discrimination

  • Save time & money for everyone involved

  • Help retain your best employees

  • Help you retain customers and good brand image

Harassment does not belong in the workplace. Of course, the prevalence of harassment can only spell financial trouble (and potentially serious brand complications) for any organization, but building a safe and inclusive workplace with serious intentions to prevent harassment is, quite frankly, the right thing to do.

 

Investing in the proper harassment prevention training solution is key to making a real impact for your team. Curious about what makes an excellent compliance program? Check out our recent report on the benchmarks you should be aiming for. And if you’re interested in learning more about how Ethena’s best-in-class training solution could address your harassment issues, follow this link to get in contact with our team.

Stats to prove it.

Latham & Watkins wrote about our unique and effective approach to harassment prevention. It’s less boring than it sounds!

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A company using Ethena could reasonably expect to face fewer enforcement actions and to be less vulnerable to liability for sexual harassment."

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