Assessing the Risk to your Business


by W. Barry Nixon


Over the last two decades, the Department of Labor and National Institute for Occupational Safety and Health (NIOSH) have provided insightful information on workplace violence fatalities and non-fatal incidents. While these statistical reports have provided essential details, in most cases businesses have not been able to translate them into cogent plans to address this ever-present problem. This article will focus on helping those charged with the responsibility for addressing workplace violence to understand the potential business and financial impact of violence on their work environment. 


The impact can be analyzed in four steps:

1.   Assessing the risk to the business

2.   Identifying the business and financial impact of workplace violence

3.   Mitigation approaches to avoid or reduce the risk of incidents occurring

4.   Dealing with the aftermath of an incident


This discussion addresses the first step.  Let’s start out with a definition of workplace violence:


Acts of aggression or violence including assaults, threats, disruptive, aggressive, hostile, verbal or emotionally abusive behaviors that generate fear that occur in, or are related to the workplace and entail a real or perceived risk of physical, emotional and/or psychological harm to individuals, or damage to an organization’s resources or capabilities.”


Starting from this definition, let’s turn our attention to the core focus of this article – the financial impact that violence can have on an organization.


Historical data reveals the daunting costs of workplace violence. 


·        According to the Bureau of Justice Statistics, about 500,000 victims of violent crime in the workplace lose an estimated 1.8 million workdays each year.  This represents a $55 million impact as a result of loss of productivity and increased healthcare expenses.1 

·        Domestic violence costs businesses approximately $6 billion annually in healthcare costs, lost productivity, and missed work time.2

·        The average out-of-court settlement for ‘negligence’ litigation is approximately $500,000 and the average jury award is around $3 million.3 

·        For 6 to 18 weeks after an incident, there is a 50% decrease in productivity and a 20% to 40% turnover in employees.4


Specific cost figures for a specific workplace violence incident are very tough to get because companies are reluctant to reveal proprietary information and potentially expose imperfections in their operations, safety procedures, and employee practices. Most firms that experience a serious incident will move quickly to minimize the negative publicity and the impact on their business.  Their actual costs are likely to be buried in various innocuous-sounding budget entries so that the business can project the image that ‘all is well’ to avoid spooking their customers and shareholders. However, as the historical data indicates, the costs are not small.


A prudent business person will therefore consider carefully how to incorporate this information into the business plan. A full assessment involves three phases:


    identification of possible risk (determining the likelihood of an incident occurring);

    identification of level of vulnerability; and

    identification of the impact of an event on business operations.


The focus should be on developing plans to protect the following five key business assets – people, facilities, technology, information, and networks.


Assessing Your Risk

The initial step is to assess the potential threat of workplace violence based on the nature of your business and on the types of facilities and their locations.  The possible types of workplace violence include the following:


­       violence perpetrated by a stranger (generally robbery is the goal);

­       violence perpetrated by a current or former employee;

­       violence perpetrated by a relative, spouse, ex-spouse or individual with a personal relationship with an employee; and

­       violence perpetrated by a customer, client or contractor.


All organizations have exposure to all four types of violence although to varying degrees.  For example, if you are a retail business that handles lots of cash, the nature of the threat posed and type of potential violence you face will differ from the threat that hangs over a manufacturing plant. Likewise the threat posed to a warehouse located in a high crime area will be different from that posed to an office building in a busy downtown area.


Each type of workplace violence requires a different type of assessment.  Numerous variables will impact these assessments, including the type of business, the type of facilities you operate, the level and nature of security at those facilities, hours of operation, level of staffing, presence of valuables or cash, and location.

Assessing Your Vulnerability

Once the risk has been identified, a vulnerability assessment must be performed. The vulnerability assessment considers the potential impact of loss if an incident occurs as well as the vulnerability of the facility/location to an incident. Impact of loss is the degree to which the mission of the organization is impaired by an incident.


A key component of the vulnerability assessment is properly defining the ratings for impact of loss and vulnerability.  These definitions may vary greatly from facility to facility. For example, the amount of time that mission capability is impaired is an important part of impact of loss. If the facility being assessed is an Air Route Traffic Control Tower, a downtime of a few minutes may be a serious impact of loss, while for a Social Security office a downtime of a few minutes would be minor.


A sample set of definitions for impact of loss is provided below. These definitions are for an organization that generates revenue by serving the public.


·         Devastating: The facility is damaged/contaminated beyond habitable use. Most items/physical assets are lost, destroyed, or damaged beyond repair/restoration. Multiple deaths have occurred. The number of visitors to other facilities in the organization may be reduced by up to 75% for a limited period of time.

An example of a devastating event would be the attack on the
World Trade Center.

·         Severe: The facility is partially damaged/contaminated. Examples include partial structure breach as a result of weather/water, smoke, fire, or impact damage to some areas. Some items/ physical assets in the facility are damaged beyond repair, but the facility remains mostly intact. The entire facility may be closed for a period of up to two weeks and a portion of the facility may be closed for an extended period of time (more than one month). Some assets may need to be moved to remote locations to protect them from environmental damage. One or more deaths occur or a serious number of non-fatal injuries (these are injuries that would meet the OSHA reportable event standard). The number of visitors to the facility and others in the organization may be reduced by up to 50% for a limited period of time.

Examples would include the recent attack in Mumbai or the killings at Virginia Tech. An example of a different type, but never-the-less as impactful
[WBN1] was the Systems Engineer that held the City of San Francisco hostage with protected passwords and denying City officials access to their computer systems.

·         Noticeable: The facility is temporarily closed or unable to operate, but can continue without an interruption of more than one day. Note that the decision to close the facility is based on employee relations, community, public relations and/or political factors as oppose the unavailability of the facility. A limited number of assets may be damaged, but the majority of the facility is not affected. Some number of injuries may occur, but not a significant number of them are serious enough to warrant reporting to OSHA. The number of visitors to the facility and others in the organization may be reduced by up to 25% for a limited period of time.

An example would the robbery of a jewelry store in which several jewelry cases are severely damaged, but can be replaced. Employees will likely be highly stressed, afraid and apprehensive, however, the physical facility is capable of opening for business.

·         Minor: The facility experiences no significant impact on operations (downtime is less than four hours) and there is no loss of major assets. There are no reportable injuries.

Examples would include a credible bomb threat, a fight between employees that causes disruption in a single department, or a big scene caused by an intimate partner, which requires police to be called, but no injuries.

Vulnerability is defined to be a combination of the attractiveness of a facility as a target and the level of deterrence and/or defense provided by the existing mitigating measures.


Target attractiveness is a measure of the asset or facility in the eyes of an aggressor and is influenced by the function of the facility. Sample definitions for attractiveness ratings are as follows: highly attractive, moderately attractive, low attractiveness.


Deterrence is measured by the layers of security and other factors that discourage or restrain aggressors by increasing the likelihood of detection; severely hampering the likelihood of success; and impeding the possibility of escape.


The combination of attractiveness plus deterrence results in the following vulnerability ratings:

·         Very High: location of facility is in a high crime area or rural area with a known long police response time; the level of deterrence and/or defense provided by the existing mitigation measures is inadequate (e.g., little or no security, no workplace violence prevention program or measures in place).

·         High: location of facility is in a rural area that has a known long police response time and/or the level of deterrence and/or defense provided by the existing mitigation measures is inadequate.

·         Moderate: location of facility is a moderate distance from law enforcement and expects moderate response time and/or the level of deterrence and/or defense provided by the existing mitigation measures is marginally adequate.

·         Low: location is in close proximity to law enforcement with immediate response time and/or the level of deterrence and/or defense provided by the existing mitigation measures is adequate.

In addition, the type of workplace violence incident has to be considered when attempting to identify the appropriate vulnerability rating. For example, a workplace robbery is driven by the ‘attractiveness’ of acquiring cash or other valuables (like jewelry, precious metals, etc.) whereas a terminated employee, intimate partner or disgruntled client is driven by the desire to get to the ‘target’ of their rage, sense of injustice or other psychological factors. For the robber the higher the level of deterrence (or security and mitigation factors) in place the more the attractiveness of the facility diminishes because their goal is to escape with the valuables. Similarly, for the enraged ex-employee the higher the level of deterrence creating obstacles to reaching the target the more likely they will be forced to seek out the target elsewhere (although since enraged individuals are in a highly charged, emotional state of mind, sometimes the logic of deterrence is minimized).

Level of Attractiveness and Deterrence Matrix





of Deterrence




Police Station




Tiffany’s Jeweler



Government Building

(armed security)







Office Building

(observe & report security)



Liquor Store







                                       Level of Attractiveness ------------------------à


Assessing the Impact

A combination of the impact of loss rating and the vulnerability rating can be used to evaluate the potential risk to the facility from a given threat.


A sample risk matrix is depicted in Table 1. High risks are designated by the darkest cells, moderate risks by the lightest cells, and low risks by the medium cells.


Table 1. Matrix Identifying Levels of Risk



Vulnerability to Threat

Impact of Loss

Very High

























The ratings in the matrix can be interpreted using the explanation shown in Table 2.


Table 2. Interpretation of the Risk Ratings



These risks are high. Counter measures recommended to mitigate these risks should be implemented as soon as possible.


These risks are moderate. Countermeasure implementation should be planned in the near future.


These risks are low. Countermeasure implementation will enhance security, but is of less urgency than the above risks.



What Action Is Required?


Did you know that statistically speaking you are more likely to get struck by lightning than to be a victim of workplace homicide?  Now before you jump to the conclusion that the risk is negligible – consider the following:


·        The Bureau of Labor Statistics reported that during the 90s, on average, 19 people were murdered at work each week or close to 1,000 people on an annual basis.5

·        Likewise they reported that so far in the 21st century workplace homicides have averaged 603 annually; a 13% increase in incidents occurred from 2006 to 2007.6

·        NIOSH reports the estimated cost for a workplace homicide is $850,000 per incident.7


The clear point that should be extrapolated from the above data is that, while workplace violence homicides are statistically rare, the reality is they are still occurring and we actually saw a 13% increase in workplace homicides from 2006 to 2007.  Non-fatal incidents have held steady between 1.5 and 1.8 million incidents annually.8


Due to the low statistical risk of the occurrence of workplace homicide a critical issue that is frequently overlooked when assessing the risk of workplace violence is the impact of an incident if it does occur. Once a homicide occurs in your workplace it brings the entire enterprise into the spotlight because it is newsworthy and will likely result in front page coverage by national newspapers and evening news. Senior executives will need to meet with the press and community leaders. This increased scrutiny and negative press coverage could impact the performance of the company’s stock and the market’s perception of its performance. Remember the horrific killings [WBN2] at Virginia Tech? Despite this being an outstanding university, its name now invokes images not of academic excellence but of the worst school shooting incident in U.S. history. I am sure this is not the imagery you would wish for people to have when they think of your company.


To further illuminate this point, a study released by Oxford University and the Sedgwick Group analyzed the impact of catastrophes on shareholder value.


The study compared fifteen companies that experienced a serious man made disaster and followed the stock value and trading volume with somewhat surprising results. The study showed that after a sharp initial negative decline of almost 8% of shareholder value, there is a full recovery in an average of just over 50 trading days. The results of the study also indicated an initial spike of more than four times the normal trading volumes in the days immediately following the incident.  However, trading volume returned to normal in an average of just twenty days. Although shares initially recovered after only fifty days, the final outcome of the companies were not always as positive. A year after the event some stock prices had actually increased while other companies lost millions or went out of business entirely.


The study reports that there are two elements to the catastrophic impact, “the first is the immediate estimate of the associated economic loss. The second hinges on management’s ability to deal with the aftermath.” Crisis has a tendency to magnify your strengths and your weaknesses. However, do not despair, because a vulnerability assessment can help you develop a plan to mitigate risk from occurring so that you do not end up as a negative example in a similar study in the future. Risk can be managed.9


Consequently, once you start to recognize the potential impact of such an event, you come to understand that it is not wise to assume it is not worth investing company resources in prevention because of the low statistical probability. Just think about how much fun it will be explaining to your company President or CEO why you chose to ignore the possibility of workplace violence when the company is under siege by the news media, government agencies, attorneys, community and family members of the victim(s) because you dismissed it as a low risk.


Additionally, you should also be aware that workplace homicides are only the tip of the iceberg: a much larger risk is non-fatal workplace violence incidents. Between 1.5 and 2 million incidents are reported annually and many suspect this is under reported by more than 50%.10 These numbers include simple and aggravated assaults, robberies, thefts, rapes, and sexual assaults. These often less-than-sensational incidents may never be reported in the media, but they present a high financial risk to your organization. (Assume each non-fatal incident has a total cost of $2,500 and you have 10 of them: this is a $25,000 impact on your bottom line.)


Once you complete this assessment you will be ready to develop a framework for identifying the potential cost to your business of an actual incident and juxtapose this against the cost of implementing a model prevention plan.





1.      Bureau of Labor Statistics,

2.      National Center for Injury Prevention and Control. Costs of Intimate Partner Violence Against Women in the United States. Atlanta (GA): Centers for Disease Control and Prevention; 2003.

3.      Smith, Mable H., ‘Legal considerations of workplace violence in healthcare environments,’ Nursing Forum. Volume 36, Issue 1, Philadelphia, Jan-Mar 2001.

4.       Violence at Work: The Experience of UK Doctors. Health Policy and Economic Research Unit, October 2003. (BMA the voice of doctors,

5.       Bureau of Labor Statistics,

6.       U.S. Department of Labor, Bureau of Labor Statistics, Census of Fatal Occupational Injuries, 2000-2007.

7.       National Institute for Occupational Safety and Health,

8.       Data from 2001 excludes fatalities resulting from the September 11 terrorist attacks.

7.       National Institute of Safety and Health,

8.       Colling, Russell L., MS, CHPA, CPP, Security - Keeping the Health Care Environment Safe, Joint Commission on Accreditation of Healthcare Organizations, 1996.

9.       Knight, Rory F. and Deborah J. Pretty. ‘The Impact of Catastrophes on Shareholders Value.’ 1996. A research report sponsored by Sedgwick Group, from the Oxford Executive Research Briefings series from Oxford University.

10.   Colling, Russell L.. Security - Keeping the Health Care Environment Safe.


Other reference:

Vulnerability Assessment and Risk Analysis model and ratings based on Federal Security Risk Management model.




About the Author:


W. Barry Nixon is the Executive Director of the National Institute for Prevention of Workplace Violence, Inc., a company focused on assisting organizations to effectively implement programs to prevent workplace violence. With over 20 years’ experience in Human Resources and Organization Development in Fortune 500 companies, Mr. Nixon is well grounded in the real issues companies face and develops practical solutions based on his real life experiences.


Prior to founding the Institute, Mr. Nixon studied general management in the Executive Management Program, University of Hawaii.  He earned a Master’s degree in Human Resource Development from the New School University, and a Bachelor’s degree in Business Management from Northeastern University.  Mr. Nixon has also completed the Advanced Human Resource Management program of Babson College, as well as the certification programs in Organization Development from National Training Laboratories, Systems Thinking from MIT, and the highly acclaimed "Creating Competitive Advantage through Human Resources," program from the University of Michigan's School of Industrial Relations. He is a certified Senior Professional in Human Resources (SPHR), a trained Mediator, certified Anger Management Facilitator, Security Specialist, Trauma Response Specialist and has earned a certificate in Background Investigations from the Public Safety Institute, Santa Rosa College. In addition, he is a member of ASIS International’s Crisis Management Council and served on ASIS International’s Workplace Violence Prevention Guidelines Committee. He is also a member of the Security Executive Council Advising Editors for Security Magazine, the past National President of the American Association for Anger Management Providers and is currently Chair, International Committee, NAPBS, leading their effort to establish an international network of professional background screening firms.


As a specialist in workplace violence prevention he has gained a reputation for developing comprehensive programs that are practical in nature and that fit the needs of the client.  His workplace violence prevention programs cover the full realm of this troubling issue helping companies to assess their vulnerability, implement readiness programs, establish crisis management teams, train employees and managers, address physical security, and revise or add new policies to effectively address this critical issue.  In essence, he helps organizations implement an effective program to minimize the likeliness of a major workplace violence incident occurring and to be ready in the event one should actually occur. 


He served as the workplace violence prevention consultant for the State of California for over nine years, providing consulting and training to managers and employees. Some of his other clients include Gillette, Canon, Beckman-Coulter, CA Department of Transportation, Southern California Edison, Orange County Sanitation, National Transit Institute, City of Pasadena, Blue Shield Foundation, Macy’s, Peterson Brothers Construction, District of Columbia Water & Sanitation Authority, etc.  He also teaches human resource management courses at several universities.


In addition, Mr. Nixon is a frequently requested speaker both in the U.S. and internationally on the subject of workplace violence and background screening. Most recently he presented at the World HR Congress held in Singapore and the Annual India’s Preemployment Conference in Bangalore. He has written three books on workplace violence and a new book Background Screening and Investigations: Managing Risk in the Hiring Process from the HR and Security Perspective. He has appeared  on CBS, CNN, MSNBC, Wall Street Journal Radio, United Kingdom – National Talk Radio, hosted the popular radio talk show - 'Workplace Violence Today," and authored the ‘Ask the Expert’ column in Workplace Violence Reporter.



About the Company:


The National Institute for the Prevention of Workplace Violence, Inc. is a professional consulting firm providing training, consulting, publications and services to assist public and private organizations to create violence free workplaces, establish programs that prevent workplace violence and how to address incidents should one occur.  Our services include the award- winning web site that is widely recognized as the most comprehensive source of information on workplace violence on the Internet. We also created, a comprehensive online directory of background screening firms, which is the most comprehensive listing of background screening companies on the Internet designed to makes it easy for employers to find employment screening firms. We also offer numerous booklets on workplace violence -related issues and the Ultimate Workplace Violence Prevention Policy Maker Software, which allows a firm to create a comprehensive workplace violence prevention policy in about an hour.





Based on the severity of these killings and the reality that this is the worst shooting incident at a school in our history I believe this warrants more emphasis than another ‘killing.’


MC:  Barry, I am trying to get away from repeating the same language -- “shooting incident” is used two lines below.  Does the change here sound better to you?