Huge Cost Of Workplace Bullying And Harassment Estimated In Groundbreaking Report

Te Kahui Tika Tāngata Human Rights Commission has today jointly released with KPMG, ‘Counting the Cost: Estimating the economic cost of workplace bullying and harassment on New Zealand employers’.

The report estimates the cost of bullying and harassment to New Zealand employers is around $1.5 billion a year, which is considered conservative as not all potential costs are included.

“Ending bullying and harassment in the workplace is vital because it harms us as people, and stands in the way of all of us living healthy lives and contributing to our workplaces in the ways we aspire to,” says Kaihautū Ōritenga Mahi | Equal Employment Opportunities Commissioner Saunoamaali’i Karanina Sumeo.

“This is a milestone-setting report that should wake employers up to the need to provide safe and supportive workplaces.

“Failing to do so prevents people from progressing in the workplace, impacts productivity, and places a huge financial burden on workplaces, workers, their households, and the country,” says Dr Sumeo.

“Being safe at work is a human right for all of us, and under Te Tiriti o Waitangi the dignity and mana of Māori must be upheld at all times including in the workplace.”

The report highlights that proactively addressing workplace bullying and harassment will boost worker productivity, bring economic benefits to employers, and make Aotearoa a better place in which to work and live.

It uses data from the Commission’s 2022 report ‘Experiences of Workplace Bullying and Harassment in Aotearoa New Zealand’ which surveyed 2500 workers across Aotearoa.

The KPMG study, released on Pink Shirt Day, looks at the costs of impact on workplaces from increased leave, decreased work performance, higher turnover and time spent on addressing internal complaints.

It estimates that the 2021-22 costs to workplaces was $1.34 billion, and that it could be $1.5 billion in 2023 due to increases in nominal wages and working population.

The report finds that 58% of this total cost of ($780m) in 2021-22 arises from impacts on female workers, showing that women are disproportionately affected.

The 2022 report showed a higher proportion of Māori respondents experienced bullying or harassment compared with other respondents.

“In understanding the economic impact on employers, we must not forget the effect it has on those directly experiencing bullying and harassment and their dependents, including on their income security, mental health, careers, and household wellbeing,” says Dr Sumeo.

Dr Sumeo says there is more work to be done in understanding the economic costs of that harm to workers experiencing bullying and harassment, the wider work environment, the strain it puts on loved ones and relationships, and the wider costs to society.

“We already know that we will all be better off if employers act now to prevent workplace bullying and harassment, and to create safer supportive workplaces.”

Bullying, sexual harassment, and racial harassment in the workplace are wrong and unlawful in Aotearoa New Zealand. These represent barriers to equal opportunities and are unacceptable and incompatible with the right to decent work and working conditions.

“Fairness, the right to work, and the right to equal employment opportunities are non-controversial foundations of positive employment relations. However, we are not all equal, and to act as if we are, despite significant hardship and wealth gaps between diverse communities and between genders neglects our responsibilities as a nation.”

The Commission’s 2022 report was based on research into the prevalence of sexual harassment, bullying, and racial harassment in the workplace.

Due to small sample sizes, the KPMG report has not been able to reliably estimate the cost of bullying and harassment on groups of workers that the Commission identified in 2022 as experiencing higher rates of bullying and harassment. For example, the 2022 report highlighted a disproportionate prevalence for Tangata Whenua, Pacific Peoples, Asian workers, new migrants, disabled workers, and bisexual workers.

The report demonstrated a concerning prevalence of these behaviours and differences in experiences between people of different age groups, genders, across industries, and different personal characteristics.

The report made headlines because the prevalence statistics and the accompanying narratives were so ugly.

“What the report did not tell us was the cost to individuals directly concerned or to employers, and this was a gap in our advocacy toolbox,” says Dr Sumeo.

Dr Sumeo says this new information adds to the urgency for New Zealand to ratify the International Labour Organisation - Violence and Harassment Convention (ILO 190).

“With perseverance, courage, leadership, rights-respecting laws, and good evidence and knowledge such as that contained in this report, we can eliminate violence in the workplace. Equality, equity, and fairness belong to all.”

Counting the Cost - Key findings

• $1.34 billion – the overall cost to New Zealand employers over a 12-month period from June 2021 - June 2022.
• $1.5 billion – an estimate of the total cost for 2023, which is likely around 15% higher due to inflation, increase in nominal wages and the working population.
• $1,618 – the average cost to employers for every worker impacted by bullying and harassment.

Notes

In 2023, the Commission was approached by KPMG (New Zealand), who generously offered their services on a pro-bono basis. Our two agencies had a pre-existing relationship, as both were affiliated with the Women’s Empowerment Principles work in Aotearoa to promote workplace gender equality.

The Commission accepted the offer by KPMG, which led to this report on the costs of bullying and harassment to employers in Aotearoa.

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