Last year here at FTL Consulting, we launched a comprehensive product and program of Workplace Harassment for organizations, without knowing the James Finlay Kenya case would come up. This program involves a number of activities that helps organizations unearth the deep-seated workplace harassment issues that ordinarily would not surface for management and leadership to have attention and take action. Unfortunately, a lot of organizations continue to assume that they cannot experience this problem in their midst, completely ignoring the stigma, difficulty, cost, and embarrassment that comes with it, that discourages open confession by victims.
In a story article covered by Vitalis Kimutai of the Daily Nation, of Sunday, March 05, 2023, the first real story of workplace harassment came to light in Kenya and Africa. Much to the public shock and prior to what came to the limelight, it was discovered that James Finlay Kenya had actually registered 1,527 cases of sexual harassment and drug and substance abuse, among its employees over the last five years. However, according to Finlay’s management, 92.7 percent of these cases had been dealt with legally through the courts and concluded. Were these the tell tell signs that were ignored?
So, what then was the real cost of these workplace harassment to James Finlay Kenya business? The following immediately happened once the story was highlighted by BBC documentary expose’ to the international audience.
First, there is what we call loss of brand equity and reputation. Under normal circumstances, it takes an organization decades to build its brand equity and reputation. The brand equity and reputation, over time, translates into a value that is costed to form part of the organization’s going concern value. It is therefore a big deal to an organization. So, when you have a franchise of a major multinational brand involved in such a muddy affair, the result is the brand value and equity is affected both locally and internationally, like a crashing stock exchange value. That is why when this story went out, it prompted a series of immediate action to try and localize and contain the crisis as much as possible.
The second cost to business is the rejection of your products and services from service stores, supermarkets, and customers in general. This leads to a major dip in sales and lose of revenue of unprecedented proportion. It is actually reported that James Finlay’s products were pulled out of International supermarket chains of Tesco and Sainsbury’s, who in addition condemned the incidents that happened in Kenya. To add insult to injury, another big brand, Starbucks suspended purchasing tea from James Finlay in Kenya as a result of the BBC documentary expose’.
Thirdly, workplace harassment that comes to light puts an organization on a spotlight and opens it up for investigation and litigation. Now the cost for these to the business can be unforgiving especially in today’s open world which is highly legislated, with improved human rights, an informed and empowered employee. Depending on the number of victims that are likely to show up in this case for litigation to seek compensation, I wonder how much value James Finlay will provide for it as liability cost in its books.
The fourth thing that happens is that normal company business is widely disrupted. As in the case of James Finlay, when the issue came to the public domain and investigations started, there was widespread fear among victims who felt they were being monitored if they would present their cases. Meanwhile, the managers who were perpetrating the sexual vices went underground for fear of being called out. In fact, it was widely reported in Kenya’s mainstream media on March 25, 2023, that Godfrey Onyango, the activist involved in representing the current and former workers who were sexually exploited was found dead in his home in Lanet, Nakuru. This adds more fear to employees of the organization. Even more so, the victims fear getting on the spotlight, dismissed, or stigmatized if they come out to report their cases. In this kind of work environment, productivity disappears completely. With a lack of productivity in the workplace, the organization’s profitability can drop by up to four times.
The other cost of workplace harassment to the organization’s business is what I would refer to as psycho-social. Remember, when a lot of the victims told their stories, they talked of how spouses were deliberately separated so that the managers and supervisors can prey on the targeted female workers. In many cases, the husbands knew about these and this strained relationships of married couples resulting in separation and divorce, thereby breaking family units. There is then the mental wellness issues that follow with such family disruptions, which could result in some of the affected victims who felt helpless, committing suicide. Others were forced to resign from their jobs and have never recovered mentally from the psychological torture they went through. Now the psycho-social impact and effect is so far reaching that there is no predicting how far it will go in ruining the lives of employees, their families, and surrounding communities. How on earth does an organization recover from this.
The sixth impact that workplace harassment has on your employees, is in damaging the organization’s employer brand image. The most affected employees normally are of the female gender who lose faith and a sense of protection, safety, freedom, and empowerment in such an organization. Already in the case of Finlay, it is reported that since these issues came to light, the number of female managers has dropped from 33 percent to 26 percent. In direct correlation, we also expect the number of female employees to drop drastically over time because of lack of psychological safety.
Workplace harassment causes both loss of career and what I want to refer to as ‘Career Ruin’. The negative publicity, cancellation of franchise agreements and contract rights due to workplace harassment issues result in the loss of business and by extension loss of jobs and incomes for many innocent employees. On the other hand, frequent harassment and psychological torture on sexual harassment victims ends up ruining their careers either by them resigning or forced to leave by prevailing circumstances. This is what I call ‘Career Ruin’, meaning their careers were ruined in an untimely manner by being forced into a situation that forced them to abandon their jobs.
The organization stands the risk to lose international contracts, agreements, and franchise rights, which could essentially bring a business to a halt. James Finlay Kenya franchise also lost international contracts for its overseas business, and this directly affected its business operations and profitability in Kenya. Indeed, this was one of the major blows dealt to Finlay.
Last but not least, another cost of workplace harassment to your organization is high turnover and low rate of talent retention. In general, any organization that is plagued by this kind of crisis will find it harder to retain top talent, who will definitely want to build their career elsewhere. Consequently, there will be high turnover of employees over time which will be very costly for the organization to replace.
- In conclusion therefore, the real cost of workplace harassment to your business and organization, is humongous, unquantifiable and unending. As a business leader, take time to reflect about the cost of workplace harassment to your business and organization. Thereafter, if you still think it is costly to invest in a workplace harassment program to safeguard your employees, their work environment and organization in general, then think twice.
