17 December 2019

The hidden costs of workplace violence

The full extent of the costs associated with workplace violence and active shooter events are notoriously difficult to calculate, much less anticipate or prevent. Each incident springs from the unique conditions of an individual workplace.

“There’s a solid business case for taking workplace violence seriously and enacting policies for prevention and response.”

Here is a look at some of the most common hidden costs we’ve identified from our experience helping companies manage the risks of workplace violence.

Lost productivity
The US Department of Labor estimates that workplace violence costs 500,000 employees 1.2 million lost workdays every year. And that’s just one part of the lost productivity.

There are many ways a violent incident can disrupt cash flow and productivity in the workplace:

  • An argument turns into a shooting at a manufacturer and forces a six-hour shutdown while police investigate.
  • A violent fight with injuries on the normally quiet law firm pulls supervisors and employees out of important meetings, hampering productivity for days.
  • An angry ex-husband tries to exact revenge at the hospital where his former spouse works, shutting down operations and interrupting the admitting and treatment of patients.

There’s a solid business case for taking workplace violence seriously and enacting policies for prevention and response.

Employee retention
Revisiting the scene of a traumatic event can trigger powerful emotional reactions that make it impossible for people to concentrate on their work. That, in turn, can motivate employees to find a new job.

The Society for Human Resource Management (SHRM) estimates the average cost of hiring an employee at about $4,000, but the number varies widely, depending on the industry and the type of job. On average it takes 42 days to fill an open position, according to SHRM.

Piling extra work on co-workers for 42 working days—more than eight weeks—can’t but hurt productivity. It forces companies to cut corners in ways that undermine trust with customers and clients.

Morale and job satisfaction
A single toxic employee who bullies or intimidates can ruin the work experience of multiple colleagues, threatening their ability to thrive in their work and succeed in their careers.

Many employees feel reluctant to rock the boat. Others are afraid to do anything about threats of violence they see every day. Beyond the moral component of allowing violence to persist in the workplace, there’s a practical reality: the most talented employees with the most in-demand skills have no reason to put up with an atmosphere of violence or threats.

Extra security
Whether it is hiring extra guards or installing a 24-hour surveillance system with high-definition cameras, the cost of security can add up. A thorough workplace violence programme requires systems to investigate incidents, document warning signs of troubling behaviour, train staff on violence reduction and response, and empower co-workers to report on risks without fear of retaliation—all of which take time away from core business tasks, adding more hidden costs.

Psychological trauma
Survivors of violence can develop post-traumatic stress syndrome (PTSD), much like those who live through combat or grow up in dysfunctional households. That can mean months, years, or even decades of therapy, depending on the individual.

Employers may count themselves fortunate to be responsible only for the therapy costs of a violent incident. If they are found negligent and ordered to pay pain-and-suffering damages after a lawsuit, the expenses could explode.

The moral costs of trauma, however, transcend monetary concerns. People care about their co-workers and naturally want to protect each other from harm. Conscientious employers, therefore, give serious thought to addressing workplace violence risks.

Property damage and business interruption
While a lone attacker with a knife or gun might cause trivial damage to property, an attacker could drive a truck through a building, start a fire or use explosive devices. The costs of such events could run into the millions of dollars.

Prevention costs far less than response
An argument gets noisy; a colleague at the next desk hangs up the phone in tears. Everyday incidents involving spouses, family members, and workers who are facing conflict often signal deep-seated animosities that can culminate in violence.

Formulating a programme to flag these threats and respond before things get out of hand is worth every penny. The cost of doing so will be minimal compared to those associated with an outbreak of violence.

Companies should take time with their agent to make sure they understand any exclusions in their coverage. This ensures they are not confronted with any nasty surprises in the middle of a crisis.

Unfortunately, prevention isn’t always enough. For those times, McGowan Program Administrators has developed Active Shooter/Workplace Violence Insurance coverage that can defray the monetary costs of these risks.

Paul Marshall is managing director of active shooter and workplace violence at McGowan Program Administrators. He can be contacted at:  pmarshall@mcgowanprograms.com