Workplace Bullying - Financial Costs To Employers

Financial Costs To Employers

Several studies have attempted to quantify the cost of bullying to an organization.

• According to the National Institute of Occupational Safety Health (NIOSH) mental illness among the workforce leads to a loss in employment amounting to $19 billion and a drop in productivity of $3 billion (Sauter, et al., 1990).
• In a report commissioned by the ILO, Hoel, Sparks, & Cooper did a comprehensive analysis of the costs involved in bullying. They estimated a cost 1.88 Billion Pounds plus the cost of lost productivity.
• Based on replacement cost of those who leave as a result of being bullied or witnessing bullying, Rayner and Keashly (2004) estimated that for an organization of 1,000 people, the cost would be $1.2 million US. This estimate did not include the cost of litigation should victims bring suit against the organization.
• A recent Finnish study of more than 5,000 hospital staff found that those who had been bullied had 26% more certified sickness absence than those who were not bullied, when figures were adjusted for base-line measures one year prior to the survey (Kivimaki et al., 2000). According to the researchers these figures are probably an underestimation as many of the targets are likely to have been bullied already at the time the base-line measures were obtained.

Research by Dr Dan Dana has shown organizations suffer a large financial cost by not accurately managing conflict and bullying type behaviors. He has developed a tool to assist with calculating the cost of conflict. In addition, researcher Tamara Parris discusses how employers need to be more attentive in managing various discordant behaviors in the workplace, such as, bullying, as it not only creates a financial cost to the organization, but also erodes the company's human resources assets.