The Enterprise Perspective of Sexual Harassment

Sexual harassment makes businesses less successful, less adaptable, and less profitable. There is a solid business case for sexual harassment prevention training with or without a state mandate.

Here’s why.

Sexual harassment is prevalent.

Based on a review of statistically random surveys, in 2016 the EEOC reported that if the survey:

  • did not define “sexual harassment,” 25% of women say they experienced it
  • did define the term, 60% say they experienced it

You may not think it occurs in your organization but consider that 90% of those who experienced harassment never reported it.

Direct financial costs of sexual harassment cases are substantial.

EEOC settlements in 2015 included:

  • $125.5 million in pre-litigation processes
  • $39 million in litigation

A 2015 insurance industry report examined 446 small- to medium-sized businesses (with less than 500 employees) that faced claims of various forms of harassment.

  • 19% resulted in defense and settlement costs averaging $125,000
  • Average deductible (for insured companies) for each settlement: $35,000
  • Uninsured companies were liable for entire settlement

Additionally, the 81% of claims which resulted in no payment represented a substantial potential distraction as the average claim required 275 days to resolve.

Although most cases are settled out of court, those that were litigated saw a median judgment of $200,000 in addition to the cost of the defense. In 25% of these cases, the settlement was $500,000 or more.

Failure to prevent harassment greatly increases exposure to these crushing costs.

Indirect costs are substantial.

One study estimated “an average damage of $22,500 per employee in lost productivity and turnover due to sexual harassment.” This impacts corporate performance. Researchers found that publicly traded companies with the worst records for sexual harassment underperformed the U.S. stock market nearly 20% a year with 4.2% lower return on assets, 10.9% lower return on equity, and 7% higher labor cost. The processes that produce these negative outcomes may be invisibly working in your company.

There are many plausible sources of these hidden costs:

  • distraction from productive activities
  • time in meetings and depositions with advocates, attorneys, and investigators
  • adversarial relationships, lack of trust, and reduced employee morale
  • costs associated with turnover, recruiting, and on-boarding
  • premium cost of temporary and replacement employees

Preventing harassment is a requirement for business success.

Building a culture of trust, growing employee engagement and commitment, and providing sound moral leadership is the best way to build a thriving enterprise. But, don’t throw just any training at this problem. Be sure to find effective, engaging, and interactive training designed to build a performance-enhancing culture for the prevention of sexual harassment.

It left a lasting impact and we have already seen a positive change in our workplace culture thanks to this training!


WILL Interactive’s Culture Suite offers an array of research-based training programs that utilize our proprietary Choose Your Own Journey™ methodology. These programs give learners real experiences through playing the role of characters and “learning by doing” in a totally safe, interactive-movie environment.

For More Information, visit the Common Ground Business 2 page by clicking here.