Why The Costs Of Sexual Harassment Are Too High For Any Business To Ignore

The ongoing #MeToo movement against sexual harassment may seem focused on Hollywood celebrities, politicians, Silicon Valley titans and other big names, but a recent survey report demonstrates that the problem exists throughout society. That includes all types of businesses—a situation that can lead not only to legal troubles and ruined reputations, but also to significant monetary losses and decreased workplace efficiency.

No matter how closely one follows sexual harassment issues, the scope of the problem can still seem staggering. For instance, a recent poll from Microsoft-backed MSN, reported in Business Insider, used survey responses and algorithms to arrive at what it calls a “representative sample” of the U.S. population, and found that nearly a third of the U.S. population—31 percent—reports having experienced sexual harassment at work. As academic studies and general experience tend to confirm, women are more likely than men to be negatively affected. MSN reports that 45 percent of women say they have experienced sexual harassment at work, which translates to some 33.6 million women. That compares to 15 percent of men who said they were sexually harassed at work. 
Individuals between ages 30 and 44 were most likely to say they had experienced sexual harassment at work, with 49 percent of women in that age group reporting such problems, compared with 22 percent of men that age. By contrast, 41 percent of women between ages 18 and 20; 47 percent of women between ages 45 and 64; and 40 percent of women 65 and older said they have been sexually harassed at work.

Reporting sexual harassment for an anonymous survey is one thing. Reporting it to proper company and human resources officials is entirely different. Even with significant numbers of workers reporting sexual harassment—basic psychology teaches that people are often braver in crowds, or when they think they are not alone—the MSN survey found that 73 percent of women who have been sexually harassed at work declined to report it. For men, that figure is 81 percent.

The reluctance stems from a fear of damage to one’s reputation, according to Gretchen Carlson, a Fox News anchor who ended up settling her sexual harassment claims against the network for a reported $20 million in 2016. In short, even innocent victims will get dragged through the mud, she says in the MSN/Business Insider report.

“First of all, if you do come forward, you’ll be labeled a ‘troublemaker’ or a ‘bitch.’ More importantly, you won’t be believed. And, some people have even suggested that you do it for money or fame,” Carlson says. Additionally, bringing forth such claims carries significant career risk. “When you know that that’s the culture that we still live in … it’s the most important decision of your life to dig deep for that courage, to know that you might torpedo everything that you’ve worked so hard for.”

Fear is not the only problem in stopping sexual harassment. Workplace culture stands as a prime factor in whether employees will experience unwanted advances and inappropriate comments, coercion to get involved in romantic relationship and potentially illegal forms of touching. For one, the “prevalence of male norms in the male-dominated environment may result in a more hostile workplace for women who are perceived by men as violators of the gender norms,” according to a 2015 study from researchers at Kent State University and the University of Texas at Tyler.

But that’s not it. The pressures of work and the need to keep a paycheck and benefits can lead to the normalization of hostile workplaces, according to researchers and analysts. In fact, the MSN survey report lends more support to that idea, with 33 percent of women respondents saying that their employers have done too little to prevent workplace sexual harassment. Overall, 42 percent of all respondents say their employers have indeed taken a satisfactory approach to preventing sexual harassment—a sign, perhaps, of the different views that men and women have about harassment in the workplace.

No matter what, the consequences of sexual harassment to companies are severe, and can be relatively easy to document via financial reports and court papers. The average cost for a company to fight a sexual harassment case through discovery and into summary judgment can range from $75,000 to $125,000, according to Texas plaintiff-side employment lawyer Chris McKinney. A case that makes it to a jury trial can cost an employer up to $250,000.

According to the Equal Employment Opportunity Commission (EEOC), in the past seven years, U.S. companies paid out more than $295 million in public penalties over sexual harassment claims. That does not take into account other costs companies might face from having a sexual harassment culture, including those related to lost productivity, diminished morale, absenteeism and other factors—costs that can potentially run into the millions of dollars annually, according to various estimates. And the costs of protecting against sexual harassment are also significant. U.S. companies in 2016 paid $2.2 billion in insurance policies that offer protection from the costs of sexual harassment claims, according to MarketStance, an insurance analytics firm.

The #MeToo movement remains in its infancy, and much of Western business culture has yet to undergo a full reckoning with sexual harassment in the workplace. But it seems unlikely that employers will ever again be able to just turn away from sexual harassment problems and hope they simply go away. The costs are far too high, and getting higher.

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