Disrespect at Work: The Costs You Can’t See on the Balance Sheet

Part 1

You won’t see it broken out on your financial statements, but your employees feel it every day. And sooner or later, the hidden costs add up.

The Obvious Costs: Turnover and Replacement

When employees leave, companies write off the loss as “just part of business.” But replacing a single employee can cost anywhere from 50% to 200% of their annual salary!

Once you factor in recruiting, training, and the ramp-up time it takes for a new hire to reach full productivity.

Now multiply that by more than one departure... often sparked by the same root cause:

people don’t quit jobs, they quit managers.

The Hidden Costs: Beyond Headcount

The real impact of disrespect is quieter but no less damaging:

• Lost productivity. 

  • Disengaged employees put in the hours but not the energy. Gallup estimates that disengagement costs the global economy $8.8 trillion annually.

• Increased sick days. 

  • A happy employee in a respectful environment might use around 9 sick days per year. In a disrespectful or toxic environment, that number jumps at least 30% higher — to 12 or more sick days. In a mid-sized company, those extra days stack up fast.

• Burnout. 

  • Stress and disrespect drive burnout, which reduces capacity long before employees formally quit.

• Reputation damage. 

  • Word travels quickly in today’s job market. A single Glassdoor review highlighting disrespect can turn away top candidates before you ever see their résumé.

A Client's Story...

As the Director of Land Development, they oversaw several small, tightly-knit teams. One team, under a single manager, was quietly struggling.

Cohesion was critical. Every member relied on one another to deliver projects smoothly, but the manager’s disrespectful approach was creating tension and frustration behind the scenes.

One staff member finally spoke up, raising the issue with the Director. But they hesitated to address it directly.

They worried that confronting the manager would make things worse...

or confirm that the manager was disliked.

So, they chose to wait.

The cost of that inaction was immediate:

• Team morale plummeted. Even minor disagreements became magnified because employees were walking on eggshells.

• Productivity dipped. Tasks that once flowed smoothly began to stall as collaboration broke down.

• Burnout and disengagement rose. Team members were mentally checking out, putting in hours but not effort.

• Turnover became inevitable. High performers began exploring other opportunities, taking institutional knowledge, and the financial investment, with them.

  
  

Ignoring these first warning signs allowed a problem that could have been small to become costly...both financially and culturally.

Disrespect isn’t just a “people problem.”

It’s a business problem — and the cost shows up quickly if left unaddressed.

From Conflict to Collaboration: Reigniting Respect in the Workplace

In Part Two, we’ll explore the steps taken to get the Director's team back on track, turning the office tension into one of a place of professional respect, and showing how small, simple, and early action can save both morale and the bottom line!

A Note from the Author

Megan Roy, BA, CQIA, Prosci

President & Founder: Modern Workspace Consulting

I’ve experienced firsthand how a lack of respect in the workplace creates tension, frustration, and burnout. I’m passionate about igniting respect in the workplace to give leaders and teams relief, reduce stress, and create space for productivity and sustainable performance.

I love high-performing teams because I know the joy and professional achievement that comes from being part of one!

Now, I’m on a mission to help companies remember the value and power of respect by bringing it back to the forefront — starting with addressing the early warning signs that can quietly erode morale and performance, just like we explored in this post.

If this hits home, let’s partner to turn tension into high-performing teams!