The Impact of Workplace Harassment on Company Culture and Productivity

Workplace harassment can have detrimental effects on employee health, severe productivity consequences, and financial ramifications that negatively affect your business. All employers should understand the impact of workplace harassment on company culture and productivity to gain a comprehensive view of why preventative measures are so necessary. In this article, the legal team from Kent Pincin Law discusses workplace harassment’s effects on employees and the company as a whole. 

Effects on Employee Health

Workplace harassment and misconduct can contribute to mental health disorders, including anxiety and depression. Such mental health concerns can lead to severe crises. Employers must provide workers with safe environments and a healthy work-life balance to prevent concerns like turnover. 

When work interferes with an employee’s mental health, their motivation levels can drop, they may experience burnout, and they could decide to quit. All of these outcomes can immediately affect the company’s productivity. 

Poor Motivation and Collaboration Impacting Company Performance 

Harassment and employee morale can have a direct relationship. When toxicity arises within your team, employees will not only experience the negative effects of the harm they’re going through but may also feel afraid to speak for fear of further retaliation. The effects of workplace harassment on team dynamics can lead to dangerous, powerful cycles, causing employees to lose motivation and self-confidence. 

When your company experiences a negative cultural shift due to harassment, your team won’t be able to collaborate, and your employees will not fulfill their typical roles, leading to a decline in performance rates. From lower sales figures to friction during meetings, the company culture impact could be substantial. 

Absenteeism and Burnout 

When employees experience workplace harassment, they may be more inclined to miss days of work to avoid an unsafe environment. Research shows that employees suffering from poor mental health have four times more unplanned absences than those with good mental health. Whether an individual experiences mental health declines, burnout, or fear from their workplace harassment incidents, they could have an increased chance of missing days of work. 

When employees don’t show up for work, your company loses valuable team members for the day, reducing productivity and overall morale. If this trend continues, other employees may see the opportunity to call out of work, reflecting poorly on your company culture. 

Increased Employee Churn Rates

When analyzing the impact of workplace harassment on company culture and productivity, you should not overlook the individuals who are no longer with the team. When someone experiences workplace harassment and feels afraid or uncomfortable about reporting their concern (or the harassment continues despite reporting it), they may choose to leave their position. 

Increased employee churn rates impact your business in numerous ways. To start, you lose a valuable team member who already understood their job role and how to perform well. After losing this employee, you must hire someone new, which comes at a high cost. 

SHRM estimates that companies spend an average of $4,700 to hire every new employee. If you’re losing employees to workplace harassment, you’re also losing thousands in hiring costs to fill their roles. At the same time, the new team members you’re gaining may not be as well equipped, well trained, or experienced to handle the position. 

Potential Legal Consequences

When not addressed properly, workplace harassment can have severe legal consequences for your business. Since harassment is illegal on various state and federal levels, you are required to retaliate against perpetrators and not allow the harassment to continue. If harassment occurs in your workplace and you allow it to progress, your company could face various legal consequences.  

A workplace harassment or discrimination lawsuit may have severe financial consequences. Because of the potential liabilities, you must prioritize maintaining a harassment-free workplace to protect your employees while keeping your company productive. 

Reputational Damage to the Brand

When harassment occurs in your workplace, word can quickly spread. For example, an employee could post a review online explaining what occurred to them, or they may spread the word on social media. If someone sues your business, the lawsuit would become public knowledge.

Regardless of how your reputation suffers, your brand is susceptible to severe damage if it allows workplace harassment. Recovering your public image after such an event may be expensive or, in some cases, impossible. Bad news can spread quickly, creating long-term consequences that impact a business’s success. 

Are You Experiencing Workplace Harassment?

Now that we’ve covered the impact of workplace harassment on company culture and productivity, let’s discuss the next steps. If you’re experiencing workplace harassment, you should speak with a supervisor, report the issue to HR, and contact a legal advisor if you cannot de-escalate the concern. Call Kent Pincin Law today at 310-376-0922 to speak with a workplace harassment attorney.