How Much Does Your Employees Bad Behaviour Cost?

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How Much Does Your Employees Bad Behaviour Cost?

The effect of bad behaviour at work is called bullying and discrimination. Workplace bullying is the injury created by that bad behaviour. Some causes for bullying include getting away with being nasty because it gets you what you want; using threats to get better staff performance without following through because it’s wasn’t appropriate; or retaliation for being bullied first. Some serious negative effects of bullying include psychological injury which can lead to death with an increasing chance of fines and criminal penalties; task failure resulting from stifled creativity due to pressured silence; and additional recruiting or Work Health and Safety (WHS) compliance costs when effected staff leave or claim compensation. For the business, you are risking fines, loss of profit and additional costs. Like any other WHS problems, you can stop the loss by actively taking steps to stop the injury before it happens.

The WHS Act can fine corporations as much as $3,000,000 for each workplace injury offence. Brodie’s Law commenced in Victoria in June 2011 and made serious bullying causing death a crime punishable by up to 10 years in jail for business owners and instigators. There are also calls to have similar laws across the rest of Australia.

The additional operational and compliance costs due to bullying injury include sick leave, increased workers compensation premiums resulting from injury claims, anti-bullying actions, adverse action claims for unfair treatment, unfair dismissal claims and discrimination claims. Safe Work Australia’s 2015 Australian Workplace Barometer Project identified sick leave due to psychological injury is costing employers approximately $4,796 per annum per victim. The Commonwealth House of Representatives Standing Committee on Education and Employment report titled ‘Workplace Bullying – We just want it to stop’ in 2012 identified the cost of Workplace bullying to employers as up to $24,000 per case on average.

The additional recruiting costs to replace good staff leaving because of bullying can be up to $5,000 on average. Meanwhile the bad staff causing the resignations remain in place to target their next victims. This can create a bad recruitment reputation for your organisation, frightening good potential new employees away. It is not long before the reputation as a bad employer and attracting lower quality staff, negatively impacts upon your brand recognition, reputation in the market and profitability.

Drifting into failure and stifled creativity through silence can be caused by supervisor encouragement intended to provide stability in the face of uncertainty in a constantly changing environment and staff’s fear of being held responsible when speaking up in case a creative idea fails. Conflict management has been a popular management tool to motivate however if mismanaged it can easily degrade to bullying. Very few managers are properly trained in conflict de-escalation or the emotional awareness to properly defuse personal issues. When staff are afraid to speak up it can lead to Group think, where innovation is stifled, and old ways are repeated because they worked last time. But the old way may not work every time and staff may be afraid to tell supervisors that they are wrong this time. Although all these losses are hard to quantify, the Australian Productivity Commission estimated that workplace bullying was costing the Australian economy up to $36 billion every year in 2010.

The best way to stop this economic loss to any organisation is to stop bullying injury before it happens under your existing WHS duty of care obligations. It is more cost effective to stop the bullying in an organisation proactively than to pay the additional costs for staff members unreasonable negative behaviour reactively. It is more profitable to have a creative and successful workforce than an organisation stifled by fear and silence.

Kevin Gilmore-Burrell LLB MBA

© Empathyse ™ Anti-bullying Consulting 2018