This file was prepared for electronic distribution by the inforM staff. Questions or comments should be directed to inform-editor@umail.umd.edu. CHAPTER 5 The Cost of Sexual Harassment A professor of psychology who gives seminars on sexual harassment reports that the biggest problem she encounters initially with managerial groups is getting males to take the subject seriously. "Hoo, hoo, " they josh on entering the room, "I'm glad we're getting a course on this so I can finally figure out how to do it." This psychologist responds by beginning a deadpan recital: "In the latest court settlement of a sexual harassment case in this state, the plaintiff's employer agreed to pay her S100,000. In that instance, the harasser had not laid a finger upon the woman..." End of joshing. -1 Summary of Findings * Sexual harassment cost the Federal Government an estimated $67 million during the study period of May 1985 through May 1987. * These figures represent the costs of replacing employees who left their jobs ($36.7 million); paying sick leave to employees who missed work ($26.1 million); and reduced individual and work group productivity ($204.5 million). Introduction I filed a sexual harassment charge against a coworker approximately 1 year ago. Since then my supervisor has not allowed us to work a shift or weekend alone or unsupervised. This is being done to avoid any unwanted sexual attention. So, the charge has affected my ability to work with others on the job for more than 6 months. A Survey Respondent In light of a staggering Federal deficit and the resultant initiatives to reduce Government spending, the costs incurred by sexual harassment become even more critical to our analysis. As our survey results show, sexual harassment has enormous and far-reaching effects and costs (often relatively hidden) to both victims and the employing organization. One obvious consequence of harassment is the emotional stress suffered by the victim. Other costs include the aftermath of harassment that affects the performance of the victim and the victim's work group: loss of productivity, lowered morale, absence from work, and job turnover. Additionally, there is the potential for relatively high costs to the organization as a consequence of litigation victims may bring. In this chapter, we examine the direct monetary cost to the Government of sexual harassment in the Federal workplace. In 1987 we asked victims whether they had used sick leave after being sexually harassed, since such leave is a direct cost to the Government. The questions repeated from the 1980 survey dealt with whether victims left their johs after being harassed or experienced reduced productivity after the harassment occurred. Additionally, to gain understanding about victims' responses to harassment in 1987, we asked for the first time whether victims had used annual leave or leave without pay after being sexually harassed. We also asked a question similar to one used in 1980 concerning whether victims had sought medical or counseling assistance after being harassed. However, we do not include the results of either of these questions in our overall cost analysis since the leave and assistance we asked about are not direct costs to the Government. At the conclusion of the analysis on costs to the Government, the emotional and monetary costs to victims are discussed. Overall Cost to the Federal Government As mentioned earlier, sexual harassment cost the Federal Government an estimated $267 million during the survey period of May 1985 through May 1987. Table 1 is a listing of those costs. Cost of job turnover. Approximately 36,647 victims left their jobs during the 2-year period as a result of being sexually harassed. -2 Losing an employee usually has an impact on at least three types of measurable costs for management: recruiting and other personnel costs associated with offering the job to a replacement, the cost of a background check on potential employees, and the cost of training a replacement. The Merit Systems Protection Board's 1980 sexual harassment study reported that, based on data from the Office of Personnel Management, it cost approximately $914 to fill a vacancy. To account for inflation, this amount has been raised to a conservative estimate of $1,000. -3 Given this assumption, job turnover resulting from sexual harassment cost the Federal Government a total of $36.7 million--$24 million for women and $12.7 million for men--over the 2-year survey period (see table 1). These cost estimates are conservative in that they assume the first person offered the job accepted it; omit the costs of having a joh vacant (e.g., work not done or overtime for other employees); and omit the costs of payroll adjustments. The projected number of Federal employees who quit because of sexual harassment is also conservative. The survey was administered only to Federal employees--thus excluding individuals who may have left the Government as a result of harassment. Cost of sick leave used To measure the dollar cost of sick leave used because of emotional or physical consequences of sexual harassment, victims were asked how much sick leave, if any, they used as a result of unwanted sexual attention. Responses show that an average of 13 percent of both male and female victims used sick leave after being harassed. Based on the responses, and the average salaries of federally employed men and women, the approximate cost of sick leave used is $26.1 million. -4 Cost of decline in individual productivity This report defines "decline in individual productivity" to be a loss in the quality or quantity of work performed by an individual. The estimates of the costs of lowered productivity due to sexual harassment are based on victims' responses to questions concerning the degree to which their productivity declined and the duration of any reduction in productivity. -5 Based on average yearly salaries for federally employed women and men, we estimated that reduced individual productivity due to sexual harassmcllt cost the Government $76.3 million over the 2-year survey period. Cost of decline in work group productivity In 1980, victims were asked whether the unwanted sexual attention they received affected the productivity of others in their work group using their responses and average salaries of victims, the Board estimated that the average cost of reduced productivity was $110.89 per female victim and $263.69 per male victim. With the rise in average salaries for men and women and the increase in the number of victims of sexual harassment since l980, it is now estimated that the total cost of decline in work group productivity is $128.2 million. Costs to Victims Constant reminders of one's sex, even in terms of mild teasing, jokes, and stereotyping, can erode a woman's confidence over time and decrease productivity. A Survey Respondent Our purpose in this chapter is to assess costs to the Government. That we do not attempt to quantify or otherwise assess all the many costs to victims does not mean they are less important or less significant. In the following limited analysis, we hope to provide at least a beginning perspective on this important topic. Victims pay all the intangible emotional costs inflicted by anger, humiliation, frustration, withdrawal, dysfunction in family life or other damage that can be sexual harassment's aftermath. Victims of the most severe forms of harassment, including rape, can facc not only severe emotional consequences but even the possibility of a life-threatening disease. Some victims may leave jobs with a hetter career path for one with a poorer career path, to escape the sexual harassment. If victims decide to litigate, they may bear monetary costs, depending on the outcome. Only 2 percent of female victims and 3 percent of male victims whom we surveyed said they had sought medical assistance, emotional counseling, or both as a result of unwanted sexual attention. While these percentages are low, the 12,641 individuals they represent in the total Federal work force faced significant out-of-pocket costs for that portion of treatment not paid for by their health insurance. We note also that in the long run, all employees and the Government bear some of the costs of treatment in the form of premium increases imposed by health plans when use increases. Victims also bear the cost of any leave they take other than sick leave. Our survey found that 12 percent of both female and male victims used annual leave aftel being sexually harassed, and 2 percent of female and 4 percent of male victims used leave without pay.-6 Using average salaries as the base, we found that the annual leave taken as a result of sexual harassment was valued at $25.6 million. The figures are even more telling when we consider that annual leave is a rather cherished benefit that employees normally want to save for vacation time or essential personal business--not for recovery from the trauma or stress of sexual harassment. An even more direct monetary loss to victims is seen in the figures for leave without pay. Using average salary levels and reported use by survey victims, employees who said they took such leave after being sexually harassed lost a tot.al of $9.9 million in salaries. NOTES 1. Walter Kiechel, "The High Cost of Sexual Harassment," Fortune, Sept. 14, 1987. 2. Figures projected from victims who indicated they quit or were fired from their jobs, or were transferred, or were reassigned to a new Federal job because of unwanted sexual attention. 3. While this may seem to be a low inflation estimate, it takes into account some reduction in costs associated with the greater use of automation in Federal personnel offices. 4. Average salaries ($29,926.72 for men and $20,641.86 for women) are based on data derived from "Federal Civilian Workforce Statistics: Occupations of Federal White-Collar and Blue-Collar Workers," published Oct. 31, 1985, by the Office of Personnel Management, Office of Workforce Information. 5. Using the responses of victims to the Board's questionnaire, the average number of days of reduced productivity for victims was reduced relative to 1980 estimates. These averages were used to determine avergae percentages of workyears lost. This figure was multiplied by the projected number of victims for the population (based on the actual number of victims from our survey) to determine the total amount of productivity lost by men and women victims. These totals were then multiplied by average salries for men and women to estimate total costs of decline in productivity. 6. Victims were asked to provide the amount of leave used, in categories ranging from fewer than 8 hours to more than 80 hours. The responses provided more precise estimates than "total percentage of users" could have provided.