Violence against women and its financial consequences for businesses in Peru

Violence against women and

its financial consequences for

businesses in Peru

Executive Summary

Publisher

Faculty of Administrative Sciences

and Human Resources

University of San Martin de Porres

Jr. Las Calandrias 151, Santa Anita,

Lima, Peru

T +51 1 362 0065

F +51 1 362 5474

I www.usmp.edu.pe

Deutsche Gesellschaft für

Internationale Zusammenarbeit (GIZ) GmbH

Regional Program Fighting Violence

against Women in Peru, Ecuador,

Bolivia and Paraguay (ComVoMujer)

BernardoAlcedo150,

EdificioPeruval,Piso4,

SanIsidro,Lima27,Peru

T +51 1 442 1101or442 0736

F +51 1 442 2010

I www.giz.de

With support from the

Sector Program

Promoting Gender Equality

and Women’s Rights

POBox5180

65760Eschborn,Germany

T +49 6196 79 1521

F +49 6196 79 801521

I www.giz.de

Supervisors

Dr. Daniel Valera Loza

Dean

Faculty of Administrative Sciences

and Human Resources

dvaler[email protected]

Christine Brendel

Regional Program Director

Fighting Violence against Women in

Peru, Ecuador, Bolivia and

Paraguay (ComVoMujer)

[email protected]

Sabine Gürtner

Head of the Sector Program

Promoting Gender Equality

and Women’s Rights

[email protected]

Executive Summary based on

‘Los Costos Empresariales de la

Violencia contra las Mujeres en el Perú’

Dr. Aristides Alfredo Vara Horna

FirstEdition,Lima2013

Technical assistance

Karsten Leckebusch, GIZ consultant

Alexandra Bleile, co-worker in the Program

ComVoMujer

Layout

Ira Olaleye, Eschborn, Germany

Cover Picture

ComVoMujer, Ecuador

Printed by

Editorial y Gráfica EBRA E.I.R.L.

English Edition

Lima,March2014

Published by:

Strategic partner:

No part of this text may be reprinted or reproduced without the explicit permission of the publisher. The ideas, opinions and

views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the GIZ.

Table of contents

Preface ............................................................................................................................................... 4

Introduction ....................................................................................................................................... 6

Methodology of study ....................................................................................................................... 8

Consequences of partner violence for businesses .......................................................................... 11

Primary results of study ................................................................................................................... 13

Recommendations for the businesses ............................................................................................. 16

Strategic partner

Preface

Violence against women (VAW) causes suffering around the world. It is possibly as old as humanity itself.

Yet especially today, in the 21st Century, we are witnessing horrible acts of violence that affect the lives

ofmillionsofwomenandtheirfamilies.Itisunimaginablethat30 %ofwomenworldwidesufferfrom

intimate partner violence.

We believe that private businesses can be powerful allies in fighting violence against women. They have

the necessary resources and effective means to prevent and combat gender-based violence. Therefore,

however, it is crucial to catch their interest for the topic. Yet in order for this commitment to be sustain-

able, it is not enough to appeal to philanthropy and good will. Instead, it is indispensable to demonstrate

that violence does not only affect women themselves but also has an impact on a business’ productivity.

Violence has a negative ripple effect on the whole society, and businesses are no exception.

For this reason, the University of San Martin de Porres (USMP), a Peruvian university with a history of

morethan50yearsandamissionstatementencompassingvaluessuchasrespectanddignity,couldnot

ignore this problem. Aggressively tackling taboos, the university researches, among other areas, gender-

based violence with the technical and financial assistance of the Deutsche Gesellschaft für Internationale

Zusammenarbeit (GIZ) GmbH and its program ‘Promoting Gender Equality and Women’s Rights’ and

‘Fighting Violence Against Women in Latin America’ (ComVoMujer). It particularly focuses on the enor-

mous economic impact of violence, as well as developing strategies to combat it.

In2012,togetherwiththeGIZprogram‘PromotingGenderEqualityandWomen’sRights’and

ComVoMujer, we carried out the investigation ‘Violence against women and its financial costs for

private businesses in Peru.’ The result was (not only for the region) a ground-breaking study. Using

concrete numbers, it made the latent but very real costs visible which affect businesses – due to

partner violence suffered by female employees as well as due to violence executed by male employees

(offenders).

This important study is yet another link in the chain of committed cooperation between the USMP and

ComVoMujer:

 In2011,wealreadyjointlypublished‘Fightingviolenceagainstwomenisalsoanissueforbusinesses’,

which formed the conceptual framework for working with the private sector, demonstrating the con-

nection between gender-based violence, and a private business’ productivity.

 At the end of the same year, we developed and published the ‘Criteria for a safe business’, offering

the private sector a perspective to prevent violence against women by adhering to standards of

Corporate Social Responsibility (CSR), legal norms, and international human rights conventions.

 In2012,weconductedtheabove-mentionedresearchproject‘Violenceagainstwomenandits

financial consequences for private businesses in Peru’. Obtaining evidence that businesses lose

almost7billionUSdollarsperyearasaresultofviolenceagainstwomendidnotmakeuscease

our commitment to help combat it. We know that this study is only an initial diagnosis and so

merely a starting point for change.

 Therefore, we have introduced further measures following the published study: As a joint action be-

tween the international cooperation, the state, private businesses, and the university, initiatives were

launched such as the quality seal ‘Business free from violence and discrimination against women’ (un-

der the auspice of the Ministry of Women and Vulnerable Populations); research projects on violence

prevention management for businesses were started; an international competition of scholarships for

business administration students to research the subject matter was advertised; and new data was

collected in order to establish a regional baseline for the current status of prevention strategies. All

these activities were achieved due to the substantial commitment by our university, particularly in

terms of their social responsibility, as well as due to the strategic cooperation with ComVoMujer.

Against this backdrop, I am pleased to present the summary of this study. It encompasses the main

results and summarizes the financial consequences of partner violence against women for private busi-

nessesinPeru–costswhichreachalmost4 %oftheannualgrossdomesticproduct.Onthefollowing

pages you will find impressive evidence of the huge economic losses, not to mention the social and

moral damages, which affect businesses each year.

Dr. Daniel Hernán Valera Loza

Dean of the Faculty of Administrative Sciences and Human Resources

University of San Martin de Porres

Introduction

The study ‘Violence against women and its financial consequences for businesses in Peru’ investigates

the degree to which violence directed against female employees interferes with the actions of private

companies and what their financial losses are accordingly.

Violence against women is a major problem in Latin America. In the traditionally male-dominated soci-

eties, violence – especially against women – occurs frequently and is usually simply regarded as a minor

offense. That men may freely rule over their women is seen, apart from a small, educated group, as a

given.

The current figures on violence against women in Peru clearly demonstrate the importance of examining

the issue: In the past 12 months (calculated from the date of the survey), about a quarter of all female

permanent employees in Peru have been victims of violence at the hand of their partner or ex-partner.

On average, the victim suffered four assaults per year.

Partner violence against women with permanent employment

Cálculos realizados sobre la base de 5 366 mujeres asalariadas mayores de 18 años.

Fuente: ENDES 2011. Análisis: Arísdes Vara.

20.4 % 23.2 %

28.6

25.3

17.6 %

17.3 %

20 %

17.6 %

18.9

22.6

37.8 %

30.1

17.8

%12.2 %

20.3

30.9

17.3 %

31.8 %

26.4 %

23.1 %

32.8

The 12-month prevalence of employed women for

respecve regions. These calculaons are based on

5,366 employed women over 18 years old.

Employed women

• 12-month prevalence USMP-GIZ: 23.1 %

• 12-month prevalence ENDES: 23.24 %

• Sum of vicms per year: 450,286

• Witnesses of violence (not vicms): 216,359

• 4 assaults per year (on average)

Human Resources Managers

• 12-month prevalence of observed violence: 2.37 %

• Sum of observed vicms per year: 45,999

• Witnesses of violence per year: 38 of 100 managers

• Laid oﬀ and rehired: 42,777

• Laid oﬀ and connue to be unemployed: 71,374

Employed men

• 12-month prevalence of violence against women: 25 %

• Sum of oﬀenders: 913,586

• Witnesses of violence (not oﬀenders): 269,159

• 3 assaults per year (on average)

Source: ENDES – 2011

The legal situation in Peru is very clear: Violence against women is indictable. Nevertheless the offence

is often not reported or denounced. Women are ashamed, fear reprisal, or the loss of their economic

security.

The fact that violence against women is not only a physical and psychological problem ought to be evi-

dent. International studies clearly demonstrate that violence against women also causes high financial

costs. It charges, among others, the health care system and causes major economic loss, not only for the

women and their families, but also for the businesses at which the women are employed.

While there are studies that attempt to quantify the costs for businesses, they primarily estimate the

effects of partner violence in North America and Australia. Therefore, results are not directly applicable

to Peru. The labor market structure in Peru is fundamentally different from those in North America or

Australia. Additionally, violence against women is – in a very male-centered society like Peru’s – very

widespread and barely ostracized by the community. A further shortcoming of these studies is that they

examine solely partial aspects of the consequences of violence for private businesses. As far as is known,

no study has until now investigated the problem of ‘Consequences of Violence for businesses’ in its

entirety.

Still, one thing that has been brought to light by every single one of the analyses: Violence against

women causes enormously high costs for businesses, reaching billions in all countries. The International

LabourOrganization(ILO)estimatestheannualcostfortheUnitedStatestobeupto67billionUSdol-

lars.

This problematic situation was the catalyst for the implementation of the present study in Peru. Its

ambitious goal was to calculate the total costs for Peruvian businesses, including all of the cost-causing

effects of violence against women. In this sense, the study appears to be entering uncharted territory.

Moreover, it was focused exclusively on the acts of violence committed by partners and ex-partners,

so-called intimate partner violence.

Methodology

Based on the four different impacts of violence (absenteeism, presenteeism (meaning being physically

at work but being absent-minded), fluctuation of personnel, and organization costs – see the follow-

ing chapter for more detail), which economically affect businesses, the study developed a model for

calculating the total costs of partner violence. The study drew upon two different sources of data for

thecalculations.Forone,datafromahouseholdsurveyconductedin2011(ENDES-2011)wasusedasa

secondarysource,whichinterviewed5,366womenabouttheirexperienceswithviolenceoverthepast

12 months.

Psychological Violence

 Your husband/partner has humiliated you in front of others.

 He has threatened to leave you, to take the children with him or to stop financial support.

 He has threatened to hurt you.

 He has threatened you with a knife/gun or another type of weapon.

Physical Violence

 He has pushed or shaken you or has thrown an object after you.

 He has slapped you.

 He has hit you with his fist or another hard object.

 He has kicked or dragged you.

Sexual Violence

 He has forced you to have unwanted sex.

 He has used physical violence to force you to have sex against your will.

Photo: © Thomas J. Müller/SPDA

The primary data was obtained from an extended survey of 211 businesses in five economically impor-

tant towns in Peru.

Investigated businesses and employees in interviews and questionnaires

Towns Businesses Interviews

with the

management

level (%)

Total

(women and

men)

Total female

employees

Interviewed

female

employees

(%)

Interviewed

male

employees

(%)

Lima 80 80(38.5 %) 26,299 10,741 618(47.2 %) 662(35.2 %)

Cusco 43 41(19.7 %) 4,315 1,605 336(25.7 %) 260(13.8 %)

Lambayeque 32 31(14.9 %) 6,654 1,347 163(12.5 %) 577(30.7 %)

Juliaca 30 30(14.4 %) 1,449 205 63(4.8 %) 121(6.4 %)

Iquitos 26 26(12.5 %) 2,775 549 129(9.9 %) 261(13.9 %)

Total 211 208 (100 %) 41,492 14,474 1,309

(100 %)

1,881

(100 %)

Source: Field work. Calculations: Dr. Aristides Vara

Due to the well-balanced geographic distribution (coast, highlands, lowlands) and – especially in com-

parison to other studies – a high sample number, the survey is regarded as representative. The surveyed

companies were for the most part from the service and industrial sector. Especially large- and medium-

sized businesses were considered, as these offered much more reliable responses about absenteeism,

dismissals, and observed violence than smaller companies.

For the interviews with the business management level, the head of human resources was selected. In

companies without a human resources department, the interview was carried out with the management

or other persons responsible for personnel issues. The questions contained the following aspects:

1. General information about the business size, sector, number of male and female employees, etc.

2. Cases of partner violence in the business: Is the company aware of any cases of violence within the

business? If so, how many cases have been reported? Did the victim report the case herself? Has

there been violence on the company’s premises?

3. Consequences of violence: To what extent has violence impacted the productivity of the business

(due to tardiness, absenteeism, lack of concentration, dismissal)?

4. Absenteeism: What is the number of women who have missed at least one day of work within the

last four weeks?

5. Staff turnover: How many women have resigned over the past 12 months or were laid off? What is

the estimated cost for hiring new staff, etc.?

6. Direct investments due to violence: Does the company support staff members who have

experienced partner violence? Does the company know how to respond appropriately?

The staff received a standardized questionnaire on partner violence. All female employees in the

surveyed businesses replied to the following questions:

1. General and professional information: Age, civil status, position in the business, work experience.

2. Wage: Based on the information on the average monthly salary, the average hourly wage was

determined.

3. Experiences with violence: It was determined whether and to what extent women have had

experienceswithpartnerviolence.Thetypeofviolencewasmeasuredonascaleof1to6,and

thefrequencywasinquiredonanotherscaleof1to7.

4. Workplace violence: Has the partner used violence at the workplace? If so, what kind of violence,

and how frequently?

5. Consequences of violence: What are the consequences of partner violence on the female employee?

Possible replies ranged from ‘arrive late to work’ to ‘was dismissed’. Again, frequency was deter-

mined.

6. Cost of absenteeism: How many days was the female employee absent in order to recover from

injuries, to go to the doctor, etc.?

7. Costs of tardiness: How often did the female employee arrive late for work due to partner violence?

How great was the delay?

8. Costs of presenteeism: Was there, over the past four weeks, a time during work hours at which the

employee was present but not productive? Were these phases due to partner violence?

9. Witnesses of violence: Has anyone directly observed violence being perpetrated? Did you hear

about cases from colleagues? What effect did this have on the productivity of the people directly

or indirectly involved?

10. Investments of the business: Does the company know about the abuse of its female employees?

What is the company doing about it? Does it respond appropriately? Is there a standardized

procedure?

Men received a similar questionnaire which addressed their role as potential perpetrators as well as

inquiring about the number of missed working hours due to presenteeism and absenteeism and the

frequency and type of violence committed.

Finally, the data collected on absenteeism within the survey of 211 businesses was extrapolated to the

total number of employees in Peru. The result was divided by the legal daily working hours (eight hours)

and the annual number of working days in full-time employment (288 days) and then multiplied by the

averageannualproductivityofaworkerinPeru(72,000PeruvianNuevoSolesforcompaniesinthe

manufacturingsectorand77,000PeruvianNuevoSolesfortheservicesector).

Consequences of partner violence

for private businesses

Although there is a general causal correlation between violence against women and labor productivity

in businesses (see above), we still need to differentiate between the factors. The resulting losses are

specific to the type of violence consequence. Generally, a four-part scheme of the various consequences

of violence with their different economic impacts on businesses can be created:

Consequences of partner violence for businesses

Negative

consequences for

the organization

Internal:

Employees being

witnesses of violence

against women

External:

Loss of prestige

Absenteeism

Tardiness

Unexcused absence

Sudden request to take

days off

Change of shift

Presenteeism

Reduced performance

Zero-productivity

Work accidents

Reduced quality

Staff turnover

Layoff

New hire

Unproductive days

Training costs

Created by: Dr. Aristides Vara

Absenteeism is measured in the absence of the victim of violence at work. Sick leave, absent days, and

tardiness directly lead to economic losses. The higher the hierarchical position of the victim, the greater

the cost for the company. Studies conducted in the United States show that victims of violence account

foranestimatedaverageofjustunder34missedworkingdaysperyear.

Staff turnover causes costs when victims of violence get dismissed and need to be replaced. New hires

in turn produce loss of productivity, as newly hired personnel have to be incorporated or trained. Ad-

ditionally, the recruitment of new staff is not free either. All this causes costs for the business.

Presenteeism is a consequence of violence against women that has to date been rarely investigated. The

term refers to attendance at the workplace while showing reduced performance/labor productivity (the

victim of violence may carry out her tasks with a significantly lower quality or speed due to the physical

or mental consequences of violence). Even fellow female and male colleagues are affected by the vio-

lence. They also have to, directly or indirectly, deal with the acts of the offender and the consequences

for the victim. This affects the labor productivity of everyone involved since very intense emotions may

be present. This brings us to the next point:

Damage to the organization also arises internally from atmospheric disturbances or externally due to

the company’s loss in reputation. The first phenomenon occurs due to a kind of collateral depression on

the part of all employees (male and female) involved with the violence exercised against their female

co-worker. The second damage arises when incidents of violence become known to the customer of the

company.

However, these four cost-generating complexes are not only victim-specific. Depending on the category,

there are also offender-specific costs to the same or higher degree since considerable costs are caused

by perpetrators. Absenteeism also occurs if a man has to take his wife to the doctor for treatment, if he

appears before a court, or if he must present himself at a police station. The productivity of the offender

is equally affected when he is mentally tied up with his acts during working hours or when he uses his

working hours to control his wife. Moreover, costs occur when he utilizes the company’s means such as

telephone or email in order to control his partner.

Photo: © ComVoMujer

Primary results of the study

From the following it will be blatantly clear what a high cost partner violence against women creates for

businesses and in which way the labor productivity of victims, offenders, and colleagues is impacted.

The relevance of this issue for companies is – considering the following statements and numbers – be-

yond all questioning. Almost a quarter of all women in Peru were, according to the questionnaire given

to female employees, exposed to violence by their partners at least once in the past year (these figures

aresimilartothosestatedinthe2011reportoftheNationalInstituteofStatisticsandInformatics).A

quarter of male employees reported to have exercised violence against their partner. Extrapolating these

resultstotheentirecountry,thisrendersanestimated450,000victimsand910,000offendersoverthe

pastyear.Moreover,anadditional15 %offemaleemployeesreportedthatwhiletheyhadnotbeen

victims of violence by their partners in the past year, they had been so in previous years.

Costs for businesses due to a reduction in labor productivity as a result of violence

against women (annual cost in million US dollars)

3.4

4.1

3.6

9.1

17.3

17.7

32.1

9.5

14.9

11.4

23.9

1.8

2.2

1.9

4.4

4.5

7.3

5.4

10.7

1.8

4.1

2.6

9.6

Partner (past 12 months) Ex-partner (past 12 months) Total (past 12 months) 

6.0 (8.9)

5.9 (8.6)

3.1 (5.3)

4.3 (7.1)

3.7 (7.0)

3.9 (7.1)

Prevalence

1 %

1 %

4.21 (6.5)













Incidence





Source: Interviews with the female employees. Analysis: Dr. Aristides Vara

Based on this representative data, the study determined that violence against women in Peru generates

an annual loss of more than 6.7 billion US dollarsdueto70millionmissedworkingdays.Thisremark-

able number is equivalent to a loss of 3.7 % of the gross domestic product.

Costs for businesses due to a reduction in labor productivity

as a result of violence against women (annual costs in million US dollars)

Cost categories Women (victims) Men (perpetrators) Total

Tardiness Not significant 44.8 44.8

Absenteeism 404.0 764.2 1,168.2

Presenteeism 613.9 2,291.9 2,905.8

Presenteeism

(witnesses, not victims or perpetrators)

357.0 237.1 594.1

Staff turnover 54.6 Not considered 54.6

Laid off and still unemployed 1,976.5 Not considered 1,976.5

Total in US dollars 3,406.0 3,338.0 6,744.0

Source: Calculations. Dr. Arístides Vara.

The mentioned values mainly reflect the reduction in productivity of the businesses. As already indi-

cated above, it is notable that the cost of intimate partner violence is not solely caused by the victims,

butalsotothesameextent(3.34billionUSdollars)bytheperpetrators.

Duetotardiness,absenteeism,andpresenteeism,thefemalevictimsofviolencemissedalmost24work-

ing days per year, which is essentially a full working month. Considering all the permanently employed

womeninthesurveyedsectorsalloverthecountry(about450,000)andextrapolatingthistoayear,it

resultsinabout10.5millionworkingdaysduringwhichwomenwerenotworkingasaresultofpartner

violence. About two-thirds are caused by presenteeism and one third by absenteeism of the victims of

violence.

For(violent)men,thesituationissimilar.Theviolenceperpetratedbythemcauses35missedworking

days per year, a much stronger impact than created by women. Three-quarter of this time is missed be-

cause of presenteeism, while pure absenteeism accounts for a quarter. Therefore, in Peru overall, more

than32millionworkingdaysaremissed.

Based on the secondary data of the ENDES-study and the surveys in the businesses, other productivity-

reducing consequences of violence can also be calculated fairly precisely. If all the missed working days

are added up – a) due to (as calculated above) absenteeism/tardiness/presenteeism, b) including the

indisposition of witnesses of violence, and c) because of staff turnover – together, the businesses in Peru

losenearly70millionworkingdaysperyearasaresultofpartnerviolence.

Total annual loss of working days, labor productivity (number of people)

and added value (incurred costs) in the business

Women (victims) Men (perpetrators) Total

Tardiness

Missed working days Not significant 465,929 465,929

Productivity loss (people) 1,618 1,618

Costs in US dollars (incurred costs) 44,800,865 44,800,865

Absenteeism

Missed working days 4,201,168 7,948,198 12,149,367

Productivity loss (people) 14,587 27,598 42,185

Cost in US dollars (incurred costs) 403,958,498 764,249,827 1,168,208,325

Presenteeism

Missed working days 6,385,055 23,835,459 30,220,514

Productivity loss (people) 22,170 82,762 104,932

Costs in US dollars (incurred costs) 613,947,642 2,291,871,033 2,905,818,675

Witnesses

(not victims or perpetrators)

Missed working days 3,712,320 2,465,826 6,177,860

Productivity loss (in people) 12,891 8,562 21,451

Costs in US dollars (incurred costs) 356,992,308 237,098,673 594,090,981

Staff turnover

Missed working days 377,007 Not considered 377007

Productivity loss (people) 1,309 1,309

Cost in US dollars (incurred costs) 36,250,642 36,250,642

Costofnewhiringof42,000women,

in US dollars

18,389,484 18,389,484

Laid off and still unemployed

Missed working days 20,569,266 Not considered 20,569,266

Productivity loss (in people) 1,976,503,846 1,976,503,846

Cost in US dollars (incurred costs) 71,374 71,374

Total

Missed working days 35,245,217 34,715,412 69,960,269

Productivity loss (people) 122,332 120,540 242,872

Cost in US dollars (incurred costs) 3,406,049,343 3,338,020,398 6,744,069,741

Note: Productivity per person per year: 288 days; labor productivity (lowest level, manufactur-

ing) = 72,000 Peruvian Nuevo Soles per person per year; exchange rate = 2.6 US dollars

Recommendations for businesses

These figures call on companies to act. For them, violence against women highly damages their yield

return.Whilealmost70 %ofthebusinessesassertedthattheircompanywouldgivevictimsofvio-

lence appropriate support, employees of only one out of five businesses stated that the company had

respondedwelltocasesofviolence.Accordingtoself-reports,only12.7 %ofallbusinesses,meaning

about one in ten, offered a standardized procedure to adequately respond to violence against women.

Behavior of the business in terms of dealing with violence against their female

employees, according to self-reports from men (n = 1,423) and women (n = 1,309)

Source: Arísdes Vara

12.6 %

27.9 %

20.8 %

21.2 %

19.8 %

10.4 %

11.3 %

22 %

18.1 %

15 %

11.5 %

11.3 %

The business knows when

female employees are

abused by their partners

The business supports

female employees who have

been vicms of violence

The managers know how to

support female employees who

have been vicms of violence

he business has

responded to cases of

violence appropriately

The business has a policy/

instrucons/program to

deal with cases of violence

The business has laid oﬀ

a female employee due to

problems related to violence

Women

Men

Percentages indicate the proporon

of respondents who aﬃrmed the

statement.

Source: Calculations: Dr. Arístides Vara

The above graph impressively depicts the need for action by businesses as well as the discrepancy

between the self-perception of the managers and the employees’ perspective of the company (also

noteworthy are the differences in gender-specific perceptions).

An active corporate policy, which works against partner violence in the business, has many benefits. Any

investment in the reduction of violence against women within the business renders significant product-

ivity gains, which certainly by far outweighs the costs. Irrespective of the moral commitment of a re-

sponsible business to create a corporate culture that is workforce-oriented, solely the financial incen-

tives of a company’s policy which commits itself to prevent violence against women ought to be reason

enough to motivate other companies to introduce these policies into their own framework as soon as

possible.

Strategic partner:

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