How Workplace Harassment Claims Affect Your Business Saleability

Workplace harassment harms both the affected individual and the business itself—and is socially and legally unacceptable. Luckily, people and other human rights organizations are rightfully speaking up more about and against it.

Harassment is a form of bullying. After all, employees are human beings as well and deserve to be treated as such. No human being deserves to be mistreated by another on any ground.

Why Workplace Harassment Can Affect Your Business

The emotional effects of harassment on an individual can be very serious and may carry irreversible consequences. Given the ease with which information can be disseminated nowadays, news can spread like wildfire. Bear in mind that human beings gravitate towards negative stories.

In light of this, you wouldn’t want to be caught on the wrong side of the spectrum of justice. If word goes out that your company tolerates any form of behavior that manifests as harassment, it will not fare well for your business. It’s safe to say that stories are somewhat indelible because the internet does not forget. This is why managers nowadays are very wary of the dangers of negligence when it comes to workplace harassment.

Thus, the following text will highlight how workplace harassment claims can affect your businesses’ saleability.

1. Damages Your Reputation

Companies generally pride themselves on their brands and brand building is no small feat. It can take a lot of years to build a brand that works, a brand that people want to associate themselves with, and a brand that delivers quality consistently.

If your company comes under attack due to workplace harassment claims or allegations, the negative public relations (PR) that ensue could impair your reputation. Such claims can distort or change people's perceptions about your brand and what it stands for. Generally, people don't want to be associated with negativity and neither do they want to be associated with brands that don't stand for what's right.

Moreover, the damage from a negative PR can take a while to wear off. The road to recovery is usually difficult. Correcting mistakes of the same gravity is often impossible when dealing with the public, who are stakeholders of your business. This is why it's better to avoid getting into the mess in the first place. Also, the bigger the company, the greater its social responsibility and the more it can lose in a harassment claim. As a result, the more customers you lose, the less you’ll sell and the fewer profits you’ll make.

Furthermore, this could have a knock-on effect on a business's operation. The extent to which it will be affected may vary, but there's a very high likelihood that when a harassment claim is publicized enough, your business may be on the receiving end of harsh criticism. When people start developing a negative attitude towards your brand, they may stop buying your products and services. This might result in possibly decreased profits.

2. Creates Mistrust

Harassment claims can cause a cloud of mistrust to hover around your organization. When the trust between you and the customer is broken, things may not end well for the business. Trust is an essential component in any relationship. When people don't trust your brand and start questioning your values, you’re in trouble. People won’t want to buy your brand because they don’t trust it and that will likewise adversely affect your business’ profits.

Also, if mistrust spreads throughout the entire organization, it may be hard to fix the problem at hand as a result of a harassment claim. If employees operate in fear that their managers or superiors will demand compliance and undue favors from them to succeed in their roles, mistrust is inevitable. Employees might not be able to work when they don’t trust their co-workers. They might not work effectively together if they’re suspicious of each other.

If an atmosphere of mistrust has penetrated your organization, there’s likely going to be a lack of coordination among your employees. There’ll also likely be a lack of transparency in the organization that can have a negative effect on your bottom line. Like a machine, if a part malfunctions, the whole system fails.

Loss in efficiency translates to lost profits. For example, from a lack of trust, the finance manager may delay or even deny the release of funds to your marketing manager because perhaps they don’t see the usefulness of marketing efforts or proposals in propelling your business. They might not even give proper reasons as to why they are unwilling to release the funds.

3. Causes High Turnover Rates

When employees feel unsafe and they feel like the company culture no longer aligns with their values, your company may likely start experiencing high turnover rates. High turnover rates are a red flag. They also aren’t good for business because the costs of turnover, hiring, and training new employees tend to be quite high. High turnovers also lead to disruption in business flow and can lead to systematic delays and service delivery inefficiency.

Moreover, talent acquisition is a very important part of human resources in contemporary business. Ideally, you want to attract the best talent and keep it. The world is very competitive nowadays and companies are competing left and right to get the best talent. If you have the best individuals on your team, you give yourself a better chance at outcompeting others.

With the way businesses have become so competitive due to globalization, it makes sense why organizations fight for the best talent. But having harassment claims associated with your business name will not help you achieve this goal. On the other hand, what it does is to deter talent from coming to your business. It also prompts the talent that you already have to leave your business.

Therefore, as a small business owner, you wouldn't want any harassment claims to be associated with your business as they can have far-reaching effects. Usually, no investor wants to work with a business that does not uphold high standards of ethics and does not promote human rights.

As such, you need to ensure your company has a workplace harassment policy in place to address these issues. Also, prevention is better than cure. So, you’d want to put rules in place to give accountability to those who engage in workplace harassment and pay a heavy price for their misdeeds.

4. Affects Productivity

The instability that workplace harassment claims can cause in a business may also affect its productivity. Fearful and unmotivated people are unlikely to be efficient and productive. Conversely, this is what companies demand from their employees. It's difficult for employees to muster the strength to have a good attitude on a job they dislike or feel unsafe in. This will affect their productivity. You must also bear in mind how financial rewards aren’t the only thing that motivates people.

Generally, your most productive personnel have other options because their skills are in demand. They can easily find employment elsewhere at your business’ expense. It’s hard to account for lost productivity. Therefore, you ought to put measures in place to make them feel safe.

People are at their most productive when they feel motivated. But when a slump in productivity occurs, it could translate to unmet deadlines, a decline in work quality, and poor performance.

Moreover, it won't be shocking to notice a slump in productivity due to the dissatisfaction that may arise from a workplace harassment claim. Dissatisfied workers are not as productive as happy workers. Unproductive workers won’t produce as many high-quality products or services. This will adversely affect your profits and profit-making potential in the long run.

For example, in industries like information and technology where innovation is important, you wouldn’t want your employees to be unproductive because it will affect your business’ profitability. Productive employees will produce products and services that can compete on an industry level while boosting business profits. In such industries, if you don't innovate, you evaporate quickly.

5. Brings Lawsuits

A harassment claim could boil up to the point where legal procedures have to be initiated. When a victim brings you to court, you won't have a choice but to face the fire. Harassment is a sensitive topic and deep down, everyone knows that any form of harassment is not good.

Once a lawsuit has been lodged against your company, there's no turning back. This will impact your business. especially if the court case doesn’t work in your favor. Your brand will be spoiled to whatever degree the penalty warrants. A good example is when the Japanese car manufacturer had to pay an excess of $34 million as a result of workplace sexual harassment claims. The workplace environment was reportedly anything but normal and women were treated improperly at the auto plant. They had to pay it and there was no escaping.

Lawsuits reflect badly on a company’s reputation. This consequently affects your business’ bottom line and saleability.


Workplace harassment claims can do a huge disservice against a company’s name. The moment a harassment claim becomes public and official, your name could be tarnished easily. There’s a chance your business might not return to the way it was after such a catastrophe. Also, your businesses’ saleability is connected to the integrity of your brand since selling is a game of perception.

Selling highly depends on how people perceive you and the value you’ve given them through your products or services. So, it’s wise to have workplace conduct rules or some form of harassment policy in place to ensure that if something bad happens, offenders can be held accountable as they should. Moreover, one employees’ misdeed can be the downfall of your company.

Peter Winnfield is a lifestyle blogger and has been writing for more than 8 years. He enjoys research and loves to share his discoveries through writing. During his free time, Peter loves cycling, canyoning, and traveling. He also enjoys Mexican cuisine.

Published by ExitAdviser


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