Conciliation service Acas said its helpline has received about 20,000 calls related to bullying and harassment over the past year, adding the problem was costing the economy an estimated £18 billion.
Some callers said the problem was so bad they had considered committing suicide.
Bullying is more likely to affect minority ethnic workers in the public sector, women in male-dominated jobs, disabled people or lesbian, gay and transgender people, said Acas.
Some people seeking help said they dreaded going to work while others reported the problem had affected their home life.
Managers often just move staff around rather than deal with bullies, according to the research.
Victims said they were afraid to complain because they feared that would make matters even worse.
Acas chairman Sir Brendan Barber said: ” Our analysis reveals that bullying is on the rise in Britain and it is more likely to be found in organisations that have poor workplace climates where this type of behaviour can become institutionalised.
“Callers to our helpline have experienced some horrific incidents around bullying that have included humiliation, ostracism, verbal and physical abuse.
“But managers sometimes dismiss accusations around bullying as simply personality or management-style clashes whilst others may recognise the problem but lack the confidence or skills to deal with it.
“Businesses should be taking workplace bullying very seriously as the annual economic impact of bullying-related absences, staff turnover and lost productivity is estimated to be almost £18 billion.”
In a separate report, the TUC said almost a third of people had been bullied at work, with women more likely to be victims.
A survey of 1,700 adults showed that 40 to 59-year-olds were most likely to be bullied, and in most cases the bully is a manager.
More than one in three people leave their job after being bullied, it was found.
TUC general secretary Frances O'Grady said: “There is no place for bullies in the modern workplace.
“Bullying causes stress and anxiety and can have long-term effects on victims' physical and mental health. No-one should have to leave their job because of bullying.
“If bullies are allowed to dominate a workplace, wider office morale and productivity suffers too. Employers must have a zero-tolerance policy.
“Too many are simply ignoring bullying behaviour and failing to support staff.”