From incivility to integrity: Addressing the hidden costs of workplace bullying

This was made abundantly clear at the recent Leaders Integrity Forum, chaired by Saunoamaali’i Dr Karanina Sumeo, Equal Employment Opportunities Commissioner. At this session, public sector leaders gathered to discuss the significant impacts of these behaviours on individuals and on organisations.

The conversation revealed two key insights:

• the importance of early intervention in preventing a toxic work environment; and
• the substantial economic costs associated with unchecked bullying and harassment.

The hidden costs of bullying and harassment

The first speaker, Gemma Livingston, Director Human Rights and Social Impact at KPMG, focused on the economic costs of bullying and harassment. Her analysis served as a powerful reminder that the long-term success of an organisation is closely tied to the well-being of its employees.

Gemma drew attention to the May 2024 report Counting the Cost: Estimating the economic cost of workplace bullying and harassment on NZ employers, which notes that workplace bullying and harassment could be costing New Zealand employers as much as $1.34 billion annually. These costs arise from various sources, including lost productivity, increased turnover, and the health impacts on affected workers.

Gemma highlighted that these financial impacts are far-reaching, touching every sector of the workforce. However, she pointed out that certain groups – Māori, Pacific peoples, disabled workers, and bisexual workers – experience disproportionately higher rates of bullying and harassment, leading to even greater economic costs for these groups. This underscores the necessity for targeted approaches that address the unique challenges faced by these communities within the workplace.

One of the most striking points from Gemma’s presentation was the discussion on how poor workplace culture can lead to higher turnover rates. Employees who feel unsupported or subjected to toxic behaviour are much more likely to leave, resulting in significant recruitment and training costs for the organisation. These costs can quickly accumulate, particularly when compounded by the loss of institutional knowledge and the disruption of team dynamics.

The Counting the Cost report highlights the interconnected nature of psychosocial hazards in the workplace. While bullying and harassment are often discussed in isolation, Gemma pointed out that they are inextricably linked with other workplace stressors, such as excessive workloads or poor leadership. These factors collectively contribute to a negative work environment that exacerbates the economic toll on organisations.

Gemma also discussed the concept of psychosocial safety and its role in mitigating these costs. She noted that fostering a work culture that prioritises psychosocial safety not only improves employee well-being but also has a positive economic effect on the organisation. The report suggests that organisations investing in creating a supportive and inclusive culture are likely to see a return on investment through lower turnover rates, increased employee engagement, and higher overall productivity.

The Counting the Cost report aims to bring these hidden costs to light, demonstrating that investing in a positive workplace culture is not just ethically sound but also financially prudent.

The power of early intervention

The second speaker, Lance Goodall, Government Health & Safety Lead at the Ministry for Primary Industries, presented a complementary perspective, focusing on the power of early intervention. He reinforced the idea that early intervention is not just about preventing individual instances of bullying and harassment but about addressing the root causes of these behaviours.

Lance discussed the often-overlooked moments of incivility in the workplace – small acts of rudeness or disrespect – that, if left unaddressed, can evolve into more serious issues like bullying and harassment.

Lance stressed the critical role that leaders play in setting the tone for their organisations. He argued that by addressing problematic behaviour at the earliest signs – whether it’s an off-colour joke, a dismissive comment, or subtle exclusionary practices – leaders can prevent these behaviours from escalating. This proactive approach not only curbs the development of a toxic work environment but also sends a clear message that such behaviours will not be tolerated.

Lance’s presentation also explored the systemic nature of bullying and harassment. These issues often stem from deeper organisational problems, such as communication breakdowns, unclear expectations, or poorly designed job roles. He highlighted the need for organisations to provide safe and accessible reporting channels, noting that employees often hesitate to report issues due to fears of retaliation or concerns that their complaints will not be taken seriously.

One of the key points Lance made was the importance of creating an environment where employees feel genuinely supported. He suggested that organisations should offer multiple, informal avenues for reporting concerns, ensuring that these channels are clearly communicated and visibly endorsed by leadership. By doing so, organisations can create a culture of openness and trust, where employees feel empowered to speak up without fear.

Lance also touched on the role of organisational culture in addressing these issues, arguing that it’s not enough to have policies in place. Employees need to see that their leaders are serious about tackling incivility and creating a safe workplace for everyone. This visible commitment from leadership can set a positive tone for the entire organisation, fostering a culture where respect and inclusion are the norms.

The cost of inaction

The key takeaway from the forum was clear: the cost of inaction is too high. Ignoring workplace bullying and harassment erodes organisational integrity and can have severe consequences, both human and economic.

The forum discussions highlighted that effectively addressing workplace bullying and harassment requires more than just implementing policies. Both Gemma and Lance stressed the importance of fostering a culture where these policies are actively practiced and supported every day. This includes integrating psychosocial safety into organisational risk management systems, ensuring leaders are equipped to intervene early, and creating an environment where people feel safe and valued.

For smaller organisations, where resources may be more limited, the discussion suggested involving employees in the process and tailoring solutions to meet the specific needs of the workplace. Flexibility and responsiveness to unique challenges are key to ensuring that these efforts are effective.

Public sector leaders have a responsibility to create workplaces where every employee feels safe, supported, and valued. By addressing incivility early and fostering a culture of integrity, respect, and inclusion, we can protect our people and our organisations from the harmful impacts of bullying and harassment.

Join the conversation

The Leaders Integrity Forum is organised by Transparency International New Zealand and hosted at the Office of the Auditor-General.

The forum provides a space for senior public leaders to discuss key issues affecting integrity in the public sector. It offers a unique opportunity for free and frank sharing about challenges, solutions, and good practice.

If you are a senior public leader interested in attending, please contact Anne Gilbert at [email protected].