Did you know that workplace discrimination against employees costs businesses an estimated $64 billion annually in the US? According to a report by the Center for American Progress, workplaces discriminating against their employees on the basis of race, gender or sexual orientation incur costs in different ways, which can significantly eat away at their profits. The majority of expenses are created through the turnover of employees, who leave their jobs due to discrimination, which is estimated at about 2 million, according to the report.
What’s more? Litigation related to workplace discrimination puts an immense financial burden on the organization, where the employer ends up paying a huge amount to settle claims, say employment law attorneys & labor lawyers. According to an article published by OFCCP News in 2012, shipping giant FedEx ended up paying a significant $3 million to settle federal charges against the company about a widespread pattern of discriminating against job applicants because of their race or gender at 23 facilities across 15 different states.
So, workplace discrimination not only hurts employees who are discriminated against, but poses serious consequences for the entire organization as well. Let us try to understand how.
Employee Discrimination Leads to High Turnover
According to the experts at Texasdiscriminationattorney.com, leading discrimination attorneys in Austin, when an organization treats an employee unfairly, the employee does not miss the very first chance to leave the company, unless they have some personal reasons to pursue in the mentally traumatizing work environment. In most cases, employees are wise enough to start seeking other job opportunities immediately. However, what becomes a headache for the business is the new hiring, inducting and training of replacements, which are both expensive and time consuming. The financial investment required in the process of recruiting a replacement can significantly strain the budget.
Discrimination can also lead to financial losses, with the business trying to protect itself against potential legal action, as in the case of FedEx. When an employee is discriminated against on the basis of sex, age, race and gender, disabilities, religion and national origin, all prohibited by federal law, they have the right to bring legal action against the company by complaining to the US Equal Employment Opportunity Commission (EEOC), says a discrimination attorney in Austin and Houston Texas (TX).
In case the company is found guilty by the government, they have to pay monetary compensation in the form of wages and re-hiring the employee, if s/he has been wrongfully terminated in the process.
Affects Other Employees & Their Performance
When an employee is fired from their job, the morale of other employees is also affected. This can create the requirement to hire team building experts to encourage and motivate workers, which can put a financial burden on the company. When employees see their employers indulging in discriminatory practices, they might become increasingly angry and distrustful of their employers. There are also times when such negative feelings are vented on clients, since these employees aren’t motivated to work and generate revenues for someone who isn’t fair in dealing with employees. This can lead to serious clients and revenue losses for the company.
Leading employment law attorneys & labor lawyers in the US recommend that companies follow fair practices when dealing with employees to prevent any negative consequences in the future.