Silence is Expensive: How Workplace Bullying Drains Your Bottom Line

Kim Williams

Once tolerated as a regrettable side effect of cutthroat ambition, workplace bullying is now a material risk factor affecting companies of all sizes. Buoyed by a system that historically turned a blind eye to unchecked power, these abuses have cast a long shadow, draining morale, productivity, and ultimately, irreplaceable expertise. The cost of silence can now be tabulated through measurable disengagement, mounting sick leave, and high turnover. But more than simply draining talent, toxic cultures are being etched into balance sheets through hefty legal settlements and reputational harm. No longer an abstract HR concern, this tangible threat to profitability is forcing boards and CEOs to reassess their tolerance for toxic cultures.

Workplace abuse already affects nearly 50 million U.S. workers. Left unprotected, bullied employees endure severe emotional distress, and long-term exposure can lead to serious medical conditions. So much so that the American Psychological Association (link) redefined the definition of post-traumatic stress disorder (PTSD) to include illnesses brought on by toxic work environments. Failing to provide a safe haven for employees isn't just a moral failing; it’s an open door to costly legal action.

Juries are increasingly responding to discrimination-laced bullying claims with multi-million dollar awards. A single lawsuit can send shockwaves through a company's bottom line and stock prices into a tailspin. News of a harassment case at a major company can also lead to a market value decline of 1.5% the following day, and up to 6.5% if covered by major news outlets. This, in turn, places the company at risk of shareholder derivative suits, with investors holding boards accountable for failing to safeguard their returns.

But the danger doesn't lurk solely in courtrooms and national headlines. Viral Quittoks can reach millions in a matter of hours, painting brands with the tarnished brush of bullying. This reputational leprosy can attract added lawsuits, inviting more employees to share their stories online and connecting with plaintiff attorneys in the process.

Just beyond the most immediate and visible risks lie rapidly changing laws targeting forced mediation, NDAs, and other instruments that once kept unpleasant behaviors under lock and key. Even in states where employee protections are limited, a company’s failure to follow its own employee handbook, particularly with regards to established investigative processes, can open the door to a breach of contract claim. But the sting goes beyond immediate payouts; it's the human cost, the emotional toll on victims grappling with abuse, and the organizational cost of navigating the minefield of toxic workplaces. Not to mention a talent flight, where top performers unwilling to endure a hostile environment take their expertise elsewhere.

A leading voice in advocating for psychological safety in the workplace, Torin Monet, Principal Director at Accenture Strategy, emphasizes the critical role of this concept in enhancing business performance and employee well-being. Drawing on extensive research and practical experience, Torin promotes strategies that prioritize psychological safety and advocates for workplace cultures that value employee well-being as a key driver of innovation and productivity. This approach not only benefits individuals but also contributes to the overall financial health and sustained competitive advantage of organizations in today's rapidly changing business landscape.

Companies can greatly limit their exposure by implementing robust anti-bullying policies and training, creating a safe and confidential employee reporting system, conducting thorough investigations, and enforcing swift, fair consequences. They can also publicly declare support for new bills like the Workplace Psychological Safety Act in Massachusetts, Rhode Island and New York City. And they can validate their commitments by pledging to take simple steps to protect their people on company websites.

Addressing bullying isn't just the right thing to do; it's a smart financial investment that can lead to increased productivity, higher profits and shareholder satisfaction. Tolerating a toxic culture is akin to gambling with your most valuable asset: your people. The fallout from rampant bullying? Plummeting morale, hemorrhaging talent, and a direct hit to your bottom line. Conversely, cultivating a haven of psychological safety becomes a magnet for top performers, breeding innovation and boosting productivity. It's a simple equation: happy, healthy employees equal a thriving, profitable enterprise. So, the next time you're tempted to turn a blind eye to bullying, remember – silence can be the most expensive echo in the boardroom.

About Kim Williams:

Vice President of People, Culture & Compliance, Kim Williams is a fervent supporter of workplace reform. Her experience and empowering approach are influencing discussions on bullying in the workplace, motivating change, and encouraging responsibility.

About Dr. Allessandria Polizzi:

Former HR executive, Dr. Allessandria Polizzi is CEO of Verdant Consulting, a top 20 workplace wellness provider. Dr. Polizzi is the author of the Workplace Mental Health Strategy Workbook, the global occupational health and safety liaison for ISO, and speaks regularly on how to create a psychologically healthy and safe organization.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. and Nasdaq® is a registered trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED. © 2024. Nasdaq, Inc. All Rights Reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.