Economic impact of sexual harassment in the workplace.
THREE YEARS have passed since Americans sat riveted near television sets and radios, listening to the Senate hearings investigating Anita Hill's allegations of sexual harassment against Supreme Court Justice-designate Clarence Thomas. It was a spectacle that vividly defined the problem of sexual harassment--and created a new source of national angst.The intense post-hearings debate gave rise to a political wave that reached Congress. In 1992, 117 women ran for seats in the House and Senate, breaking the previous record of 77 in 1990. While economic issues dominated, sexual harassment was the subtext in many races.
What about the workaday world? Did the sensational Hill-Thomas hearings serve as a cautionary tale about sexual harassment in the workplace? For many companies, yes; but for many others, the answer is no. It is estimated that 50-85% of American females will experience some form of sexual harassment during their academic or working lives. Yet, just 25% ever tell anyone, and only five percent ever file charges.
The damage it can cause to women's professional careers is well-documented. Not as well quantified, but no less damaging, is the loss of confidence and self-esteem. Clearly, sexual harassment in the workplace continues to be a degrading and career-limiting experience for many women--from neurosurgeons to secretaries and lawyers to construction workers.
While it primarily is a problem for women, men are affected as well. In May, 1992, for instance, a Los Angeles court ordered a manufacturer to pay a man $1,000,000 in damages for sexual harassment by his female supervisor, an officer of the company.
On the broad spectrum of sexual discrimination, sexual harassment is one of the more extreme, more flagrant manifestations. Unlike some forms of sexual discrimination that result unintentionally from neutral policies or practices, such harassment arises out of deeply ingrained attitudes about sexual identities and sexual roles. These attitudes must change.
It is unlikely that sexual harassment can be eradicated in a single generation. Nevertheless, enormous progress can be made if it is viewed as an economic issue.
As the U.S. evolves from an industrial/ manufacturing economy toward an information/services one, human resources people--are becoming the true engine of added value. Skilled, experienced, and committed employees frequently provide a company its competitive edge. Most firms today subscribe to the idea that it makes eminent sense to invest in human capital resources to enhance productivity.
Yet, many companies do not understand the productivity aspect of sexual harassment. While it is well-known that harassment essentially is an abuse of power, few people appreciate the adverse effect it has on employee productivity. Corporations are beginning to realize that investment to minimize sexual harassment in the workplace can yield startling economic returns.
Women constitute 46% of the workforce and their productivity is critical to the nation's economic health. It is imperative that U.S. companies grasp an important fact: Great economic benefits can be derived from establishing and maintaining a harassment-free workplace.
To date, there is only limited research that quantifies the dollar costs of sexual harassment. The data that does exist is compelling, however. In the typical Fortune 500 company with 23,750 employees, sexual harassment costs $6,700,000 per year in absenteeism, low productivity, and employee tumover. This represents $282.53 per employee, according to a 1988 survey conducted by Working Woman. (The first scientific sampling of its kind in the private sector, this 49-question survey was answered by directors of personnel, human resources, and equal-opportunity offices representing 3,300,000 employees at 160 corporations.
This did not include the indirect, hard-to-measure expenses of legal defense, time lost, and tarnished public image. More recent research by the author, Freada Klein, a Cambridge, Mass., analyst, confirmed that the data still are valid. Anecdotal evidence suggests today's costs may be even higher.
The economic impact falls into three main categories. First, sexual harassment can degrade employee performance. At the very least, victims are forced to waste time blocking and parrying unwanted attention. It is distracting (and disturbing) for the victim, and certainly erodes the working relationship, both manager-to-subordinate and peer-to-peer. At the same time, the harassing employee is wasting valuable company time on personal pursuits. Generally, sexual harassment diverts human energy away from achieving business objectives.
Second, harassment can breed resentment and mistrust in the workplace. Camaraderie and cooperation are replaced by a negative tension that can impair the concentration of all employees. A widespread cynicism can suffuse the workplace; productivity suffers; and absenteeism increases. How can an employee work enthusiastically for a company that tolerates hurtful, demeaning behavior? With no recourse (quitting is not often a viable option), employee/victims typically retreat into a passive or even sullen acceptance. Twelve percent of females who face harassment report stress-related health problems, 27% claim undermined self-confidence, and 13% see long-term career damage.
Third, harassment contributes to costly turnover. Women are nine times as likely as men to quit because of it, five times as likely to transfer, and three times as likely to lose jobs. Fully 25% of females who believe they have been harassed have been dismissed or have quit. Every woman who leaves because of harassment represents a large loss of the investment in training her, compounded by the costs of employee replacement.
Solutions
Businesses rapidly are becoming aware of the heavy economic costs of sexual harassment and are searching for solutions. As an attorney who has advised such companies, I have been trained to think first of the legal ramifications and remedies. With sexual harassment, the law first must define and identify it--not always an easy task given the confusing mix of circumstance, perception, and nuance.
The Equal Employment Opportunity Commission defines sexual harassment as unwelcome advances, requests for sexual favors and other verbal or physical contacts that become 1) a condition of employment, 2) the basis for employment decisions, or 3) that interfere with the employee's work performance or create an intimidating, hostile or offensive work environment."
There are two types of sexual harassment: quid pro quo, in which a supervisor or manager seeks to exchange employment benefits for sexual favors; and "hostile environment, " in which an employee's standing in the company or ability to work is affected adversely by such conduct as sexual jokes, suggestive comments, unwanted physical contact, and pornographic displays.
In the case of quid pro quo harassment, the company is liable for damages whether or not it knew about the supervisor's improper conduct. With hostile environment cases, the firm is liable if it knew or should have known of the circumstances and their effect on the employee.
Obviously, each claim must be considered in light of the facts and circumstances surrounding the allegedly harassing conduct. Because of the legal liability, some prudent companies regularly publish descriptions of what constitutes sexual harassment and their prohibition against such behavior. In fact, states such as California require businesses to instruct their workers in the definition of sexual harassment and how to file a complaint. In addition, many firms instruct their employees on how and to whom complaints may be lodged. It is crucial that all workers understand that any such allegations will be investigated promptly, fairly, and discreetly.
The clearest laws and company resolutions can go only so far in preventing sexual harassment, though. The real solution lies in changing individuals' perceptions and attitudes, and here the company can play an influential and decisive role. There are many forward-thinking businesses that are going beyond the minimum legal requirements. These employers are initiating thoughtful, company-wide awareness training programs that help men and women, particularly men, understand the pain and indignity of sexual harassment.
Such initiatives are being implemented not only because they are the "right thing to do," but because they make sense economically. These can be extremely cost-effective. For a small company, the price can be as little as $5,000; for a large one, it can range up to $200,000.
As an example, for that Fortune 500 company facing a $6,700,000 liability, it is 34 times as expensive to ignore the problem as to take steps to eradicate it (assuming a $200,000 program). Looked at another way, a sexual harassment program can be cost-effective if it averts the loss of one key employee or prevents one lawsuit.
It is important to note that these initiatives must be comprehensive if they are to be effective. Partial programs and/or weak implementation actually can exacerbate the situation when companies encourage women to come forward with sexual harassment claims, then provide no substantive response or active measures that properly would redress the wrong.
To reap the benefits of a harassment-free workplace fully, training programs must do more than merely inform managers and supervisors as to what constitutes sexual harassment. They must take the initiative and confront the underlying attitudes that lead to sexual harassment. In my experience, the most effective vehicle for this is training for supervisors and managers.
Such training not only educates these individuals on the legal issues, but permits an open discussion about the emotional consequences of sexual harassment. Having conducted many seminars on the subject, I have found that most managers--male and female--are eager for guidance in this area. Many employers also offer similar programs to non-managerial employees and even may set up interactive groups of employees and managers to discuss the key issues, including the hurt and loss of self-esteem that sexual harassment can inflict on their company's female workers.
Such sessions can help the attendees recognize that men and women have the same competitive aspirations and same deep need for a sense of self-worth. Men can learn about a woman's feelings--that harassment negates her self-esteem and perception of her abilities and value to the company. Also, these sessions often surface the reality that most working women have suffered a number of experiences with sexual harassment, so that even seemingly harmless slights or innuendo can be the final straw" (which, in turn, can lead to charges of "overreaction" on the part of the woman, further undermining her credibility and balance). Moreover, these sessions may help harassers realize that such an act is not just a manager's abuse of authority, but a gratuitous humiliation of a human being.
Awareness training can not erase a lifetime of cultural conditioning, but it can inspire a new empathy that leads to attitudinal and behavioral changes. In order to be truly effective, however, the principles established in the training programs must continue to be reinforced and exemplified by senior company officials.
If a company encourages an open discussion of unwelcome attitudes and positions itself strongly against sexual harassment, it is much more likely to win the loyalty and goodwill of its workers. Productivity inevitably will improve, absenteeism will drop, and it will be easier to recruit and retain good employees. Any firm that makes its workplace more attractive to almost half of the total workforce is going to benefit from having a larger pool of available talent.
Such dedicated workers can give American corporations an essential competitive edge against their toughest international competitors. In Japan, for example, women, for all practical purposes, are barred from the workplace by centuries of institutionalized discrimination. Japan appears unwilling to tap into half of its national brainpower. The costs of these archaic attitudes are incalculable. Indeed, many economists believe that Japan's current economic ascendance will be curtailed sharply at some point by its exclusion of women.
The lesson for the U.S. is an obvious one: Working women could be the nation's trump card in the intensely competitive world market of the 21 st century. Certainly, American corporations should do everything in their power to exploit more fully the skills of half the workforce. Aggressive elimination of sexual harassment, along with all other forms of discrimination in the workplace, will enable more women to be more productive, for longer periods of time.
Companies can treat sexual harassment as a "cost of doing business" or view its elimination as an opportunity to improve the bottom line. Is there really any question as to which path to follow?
Ms. Crawford is a partner in the law firm of Holtzmann, Wise & Shepard, Palo Alto, Calif., specializing in management-labor law, including sexual harassment. Formerly, she was an investigator with the U.S. Equal Employment Opportunity Commission.
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| Author: | Crawford, Susan |
|---|---|
| Publication: | USA Today (Magazine) |
| Date: | Mar 1, 1995 |
| Words: | 2041 |
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