Why preventing sexual harassment is good for business

Posted in Sexual Harassment on August 22, 2013

In the wake of the scandal involving San Diego mayor Bob Filner, the issue of workplace sexual harassment is getting some much-deserved attention in the media. A recent article in the Fiscal Times does an especially good job of highlighting both the pervasiveness of sexual harassment and how much it can cost businesses.

These costs include more than just expenses related to fighting a lawsuit. Additionally, not all of the costs are financial. In today’s post, we’ll discuss some reasons why preventing sexual harassment and aggressively responding to complaints are in a company’s best interests. 

Benjamin Franklin once said that an ounce of prevention is worth a pound of cure. This is especially true when it comes to preventing sexual harassment in the workplace. Did you know that California is one of just three states that require employers to give their workers regular sexual harassment training? Perhaps this is why harassment allegations are so frequent nationwide.

In 2011, about 11,300 sexual harassment complaints were filed with the Equal Employment Opportunity Commission. Of these, only about 1,400 were settled by the EEOC, but at a staggering total cost of $52 million. Compared to the legal costs of settling a complaint, it is a much better investment to foot the bill for sexual harassment training that might actually prevent such behavior. 

Similarly, companies should realize that they can’t afford to take complaints of harassment too lightly. Most employees who file complaints don’t want to be involved in a lawsuit. They just want the harassment to stop. But employers to fail to thoroughly investigate and put an end to harassment may soon find themselves facing a lawsuit. By some estimates, companies may lose as much as $100,000 in legal bills even if they win. 

There are also non-economic costs associated with sexual harassment that can nonetheless have a negative effect on a company’s bottom line. Both sexual harassment and a related investigation can decrease workplace morale and lower employee productivity. Companies that fail to respond to complaints also tend to have higher rates of employee turnover, which wastes both time and money. 

Some employers take sexual harassment seriously because it is the right thing to do, but these are the exception and not the rule. Thankfully, other employers can at least understand the simple language of dollars and cents. 

Source: The Fiscal Times, “The High Cost of Sexual Harassment,” Beth Braverman, Aug. 22, 2013