The economic cost of sexual harassment

20th August 2021

The economic cost of sexual harassment

Conservatively estimated, one in four women will experience sexual harassment in the workplace at some stage during their working lifespan. The personal toll on these women - and those around them who deal with the secondary effects - is immense. The psychological impact of such harassment and victimization cannot be overstated. A recent study has undertaken the mammoth task of calculating the financial cost to women who are victims of sexual harassment in the workplace. The findings are not only shocking but serve as a grim reminder that our quest for gender equality must incorporate actions aimed at eradicating sexual harassment as a main driver of workplace inequality. 

The Institute for Women's Policy Research and Time's Up Foundation published a report (Paying Today and Tomorrow) on charting the financial costs of workplace sexual harassment (July 2021). The research team conducted interviews with survivors of workplace sexual harassment and stakeholder experts, with the aim of understanding the short and long-term financial impact on these employees. The report assists in closing the gap in our knowledge in relation to employee costs, supplementing the various studies already produced into the costs to employers and the impact on individual health and performance. 

The report highlights key areas of financial loss to the employees. It echoes results from a 2017 study that found that victims of workplace sexual harassment are more likely to face financial stress and have their career paths derailed. 

The report serves as a timely wake-up call to all of us, but especially to employers whose workplaces are not adequately dealing with this crisis. Running an awareness campaign once a year as part of Women's Month and placing a policy on workplace harassment on the intranet, is not sufficient in our quest to meaningfully address this issue. 

The cries for clear channels to report harassment echo throughout the report. It should be unacceptable in any workplace for any employee to be uncertain on how, and to whom, to report workplace sexual harassment. Businesses are rightfully spending significant time and energy to ensure compliance with the Protection of Personal Information Act. Wouldn't it be wonderful if we could see the same dedication to ensuring every employee understands who the designated person should be to whom allegations of sexual harassment should be reported? Let's see pop-ups on our computer screens requiring employees to acknowledge that they know that Jane, the Senior Vice President of the Region, is the designated person to whom any such reports should be made. Let's then make sure that Jane is properly trained, empowered and protected to deal with such complaints. And should Jane turn out to be contributing to the lack of action to address reported harassment, or even be complicit in retaliating against employees reporting concerns or incidents, let's replace her with the right person who can assist us in making visible, meaningful progress in this quest. We owe it to ourselves, and every person who has or may become the victim of workplace sexual harassment, to do so today. Tomorrow is just not good enough anymore.  

Written by Johan Botes, Partner and Head of the Employment & Compensation Practice at Baker McKenzie in Johannesburg