Deloitte Access Economics was engaged by the Treasury to estimate the economic costs of sexual harassment in the workplace, to inform the Australian Human Rights Commission’s national inquiry into sexual harassment in Australian workplaces.

This report estimates the economic costs of workplace sexual harassment in Australia. Estimating the cost of workplace sexual harassment to the Australian economy is intended to increase awareness of the issue and its impacts by bringing new evidence to light regarding its various costs and who bears them.

Overview:

Workplace sexual harassment imposes a range of costs that impact on individuals – including victims, perpetrators, and bystanders – employers, the government, and society. These costs include lost productivity (that reduce gross domestic product); other costs such as for healthcare, complaints and investigations (that do not reduce gross domestic product); and lost wellbeing of victims.

There has been little prior research into the economic costs of workplace sexual harassment, i.e. the extent to which economic output is lower, and economic resources are allocated sub-optimally, due to workplace sexual harassment. A targeted literature search has not identified any prior studies that have estimated the cost of workplace sexual harassment in Australia. A search of the international literature has identified a small number of studies that have articulated a range of costs.

Results:

In 2018, workplace sexual harassment imposed a number of costs. The costs included in the model were:

• $2.6 billion in lost productivity, or $1,053 on average per victim.
• $0.9 billion in other costs, or $375 on average per victim.

At an average weekly wage of $1,244 across the economy, each case of workplace sexual harassment represents approximately 4 working days of lost output. The largest loss of productivity – staff turnover, 32% of costs – results in lost income to individuals, lost profits to employers, and reduced tax paid to government. Significant losses also result from absenteeism (28% of costs), and manager time (24% of costs). .

Finally, the model estimated lost wellbeing for victims of actual or attempted sexual assault at a total of $249.6 million in lost wellbeing, or $4,989 on average per victim.