A hostile working environment makes no business sense

When people think about bullying, an image of playgrounds and classrooms instantly comes to mind. While many of us believe that bullying is resigned to schools, the truth is that it continues to pursue many of us in our professional career also.

a-hostile-working-environment-makes-no-business-sense

In 2012, a study by CareerBuilder found that 35 percent of employees reported feeling bullied at work, an 8 percent increase in the previous year. Some point towards this being evidence of an increase in workplace bullying.

Simultaneously, there has been an increase in the number of high profile cases where employers have been stung by claims from employees over workplace bullying. This tends to suggest that workplace bullying isn’t so much on the increase as it is being brought into focus with victims feeling more empowered to come forward.

One such case involved damages of £3.1 million being awarded to Svetlana Lokhova, nicknamed “Crazy Miss Cokehead” and “Miss Bonkers” by bullying male colleagues at the London branch of Sberbank CIB.

But the real cost of ignoring workplace bullying isn’t from the settlements arising from court cases, or even in the sizeable legal costs defending them, it is to the damage done to the workplace environment, the office culture, on brand reputation, how it creates demotivated and despondent staff and the impacts that all of this has on productivity and revenue.

Dr Christine Porath, a Georgetown University professor who studies workplace incivility says that it isn’t easy to convince business owners to pay attention to workplace bullying. But showing them the detrimental toll it takes on productivity and how it hurts the bottom line, might just be the key to harvesting a sea change in mentality.

The True Costs of Workplace Bullying

How can workplace bullying hurt your business? According to Patricia Barnes, a workplace bullying author, judge and attorney, workplace bullying is likely the “single most preventable and needless expense on a company’s register”.

Workplace bullying can include verbal abuse, intimidation, humiliation, taking credit for another person’s work, deliberate exclusion from meetings or work-based social events, or setting unfair workloads or tasks that cannot realistically be met.

Far from being isolated incidents, these mistreatments are often campaigns that stretch over long periods of time causing the victim to suffer mental health and wellbeing issues.

The impacts workplace bullying can have on your business are surprisingly far-reaching.

Work Rate and Performance

Bullies prevent work from getting done, causing chaos, confusion and a loss of focus. If workplace bullying isn’t dealt with swiftly and correctly, it can have an adverse effect on performance and creativity while causing team spirit to deteriorate.

A disengaged, disenfranchised, or disgruntled workforce will not produce for your business. According to one report, less than a third of American employees say they’re engaged at work while another survey concluded that a paltry nine percent of people say they’re happy at work.

Loyalty and Productivity

Targets of bullying who feel victimised, marginalised, alienated or angry sometimes punish the organisation by intentionally decreasing work effort and quality, reducing their work commitment, or taking their frustrations out on customers. This form of backlash impacts loyalty and acts as a form of sabotage.

Similarly, bullied workers who feel anxious or demotivated are also likely to avoid putting in any extra effort. Robert Sutton, Professor at Stanford University, suggests productivity could decline by up to 40 percent when workers are distracted by bullying.

Human Resources

Numerous studies have produced indisputable evidence of an empirical link between workplace bullying and sick leave/disability claims. The stress and health impacts caused by bullying have an adverse effect on profits when your top talent takes time off work. It also requires the engagement of HR personnel to manage each situation individually.

Rampant absenteeism results in increased healthcare costs, as well as a huge demand placed upon your recruitment processes if workplace bullying leads to a high staff turnover – hiring, inducting, training and settling in new staff all take their toll on your costs, especially if the members of staff you’ve just invested heavily in welcoming to your company leave shortly thereafter.

A report released by noworkplacebullies.com suggests that up to 30 percent of bullied employees will resign from their jobs, and 20 percent of those who witness bullying will also leave the organisation. That’s half of your workforce who simply won’t tolerate an environment where bullying is prevalent. More worryingly, of that 50 percent it is the most confident and skilled staff who will seek the exit door. Those who feel they are less qualified to walk into fresh employment are the ones most likely to hang around.

Legal Costs

As alluded to earlier, employment or discrimination cases brought by victimised employees can result in painful settlements. But it’s not just the payout you have to worry about, the time spent managing risk and preparing a defence can quickly wrack up some weighty lawyers’ bills as well.

Moreover, courts and employment tribunals are becoming increasingly familiar with workplace bullying and are, quite rightly, sympathetic towards the victims of it. Just one well-founded claim can cause millions in losses before it even sees a courtroom.

Wrongful and constructive dismissal, where a supervisor has wrongfully terminated the employment of a bullied employee, can also take their toll.

Lost Time

Individuals involved in high-stress situations go to great lengths to avoid those situations. They may call in sick when they’re not, or go on extended stress-related absences. Some bosses believe that bullying absent staff over their absence is a way to get them back in the office when, paradoxically, it’s the bullying that’s keeping them away in the first place.

Research in the United Kingdom suggests that as much as 18.9 million working days are lost each year through absenteeism fuelled by workplace bullying. The largest commercial insurance firm in the United Kingdom, Royal & Sun Alliance, calculated the resulting losses of its own absenteeism to be approximately £18 billion per annum, between 8-10 percent of the company’s overall profits.

Brand Reputation

A toxic workplace cannot be contained and perceptions of a toxic workplace environment can damage your brand in terms of retaining and acquiring new customers, in terms of potential mergers and partnerships and in recruiting skilled staff.

People are less likely to do business with a company that has a reputation for having a bullying culture. Disrespectful behaviour makes people uncomfortable, and they’re quick to cease business relations with an organisation that permits bullying.

Similarly, no self-respecting talented, skilled or experienced professional would even consider a post at a company that had a poor public perception of cultivating a corporate bullying culture, regardless of what remuneration or benefits package was dangled in front of them.

People unhappy in your business will gossip or complain to anyone that will listen, word of mouth negativity might only have a limited impact but it’s certainly not good either way. If the business is in the public eye and the media pick up on poor working conditions or bullying, the damage to the brand can wipe billions off of its share value. Think of recent exposés on Sports Direct or Amazon for example.

Profits and Share Value

This is where senior executives and shareholders start to take a real interest. If they’re able to comfortably wave away everything that has come before, anything that hurts profit and share value will surely make them sit up and take notice.

Returning to the example set by Amazon, poor publicity surrounding the working conditions for their warehouse staff caused their share price value to drop from $535.22 per share to $463.37 in just one week following the story going viral in August 2015.

The figures are clear and irrefutable – workplace bullying costs businesses billions of dollars every year and could be enough to destroy some companies who refuse to deal with it. Luckily, there is an alternative.

Harvesting a positive corporate culture where workplace bullying will not be tolerated and is swiftly identified, tackled and stamped out is the first step towards creating a happy, inspired, and loyal workforce instead. This will result in increased productivity and improved communication that reinvigorates your business with a renewed spirit of collaboration, and greater employee engagement delivering a vastly improved customer service experience.

Happier customers. Happier management. Happier shareholders. Happier business owners. It’s a no-brainer.

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