Convincing CEOs to Make Harassment Prevention a Priority

By Chai R. Feldblum and Sharon P. Masling November 19, 2018
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Editor's Note: SHRM has partnered with Harvard Business Review to bring you relevant articles on key HR topics and strategies.

It has been a year since the #MeToo movement went viral. Since then, the Equal Employment Opportunity Commission (EEOC) has experienced a 13.6% increase in the number of sexual harassment charges it has received. The EEOC's counterpart state agencies have seen even greater increases. While some business leaders have seized this moment to make important changes in how they address harassment in their workplaces, others do not yet see the urgency in addressing the problem. In fact, in a meeting we had last month with a group of senior HR directors, some of the most urgent questions were: "How do I make my CEO pay attention to this issue?" and "How do I convince my CEO that we need to invest sufficient resources in preventing harassment?"

In June 2016, the EEOC issued a first-of-its-kind report on harassment in the workplace. The suggestions and tips in that report still stand, but the past year has shown us just how difficult it is for HR directors, general counsel, compliance officers and D&I directors to make the business case for harassment prevention to their leadership. Many of the people in these roles know—as we do—that stopping and preventing workplace harassment is not only a moral imperative, it is also sound corporate strategy.

In the past fiscal year the filing of sexual harassment cases by the EEOC more than doubled, and monetary damages paid by employers increased from $47 million to $70 million in EEOC cases. These statistics do not include the costs of sexual harassment cases brought by private plaintiff attorneys or other forms of harassment investigated or litigated by the EEOC or private attorneys, such as harassment as a result of race, national origin, religion, disability or age. Adding the costs of these cases further increases the financial liability for companies that fail to prevent harassment.

Damage awards and litigation costs are not the only financial consequences of corporate failure to stop and prevent workplace harassment, though. Employees who are harassed, as well as those who work with harassed employees, suffer adverse physical and mental health consequences, resulting in absenteeism and higher medical costs. Harassment reduces the productivity of both harassed employees and the unit in which the harassment occurs. Harassed employees may leave if they are able to, and employees who witness unchecked harassment may also leave. Because almost 70% of harassment incidents are never reported to the employer, talented and highly-skilled employees may leave without employers knowing that their business has suffered as a result of workplace harassment.

Reputational harm can also be devastating to an employer's business. Companies in which it is known (even without media coverage) that harassment occurs in their workplaces are less likely to attract talented employees and may lose customers and clients. If workplace harassment becomes public, the harm to the company's reputation may be significant and long lasting.

For example, numerous companies — from Wynn Resorts to Fox News to Mike Isabella's restaurant conglomerate to Uber — have seen stock prices, advertising revenue, sales numbers and consumer loyalty fall as a result of negative harassment-related publicity. Boards of directors have faced shareholder derivative suits for failing to investigate and correct allegations of harassment. Some businesses, like Fidelity, have taken critical steps to correct and prevent harassment as soon as they have learned about it. Our hope is that other organizations and companies will begin to take proactive steps, before they find themselves in the press.

Unfortunately, as we heard at the HR meeting, many employers have still failed to implement the best and most effective measures to prevent workplace harassment. Traditional training that is focused on legal definitions and prohibitions of unlawful conduct is necessary but insufficient to prevent large judgments against a company and to prevent future misconduct. Written policies are often overly legalistic, not disseminated effectively and poorly implemented. Typical corporate reporting and investigative policies and procedures lack crucial components that would make them most effective. Harassers, especially "superstars" within an organization, are often protected rather than punished, and individuals who report the misconduct of those employees may suffer unlawful retaliation. As a result, employees may be afraid to come forward and corporate leaders are unaware of the full extent of harassment in their workplaces.

To stop harassment effectively and to prevent its recurrence, employers need to create a culture of respect and inclusivity, where people feel safe when reporting misconduct, and where there are clear and immediate consequences for having engaged in harassment. Managers need to be taught skills regarding how to respond to harassing behavior in its infancy, before it rises to the level of illegal conduct, and how to respond when an employee makes a complaint. Non-supervisory employees need to be told what behavior is unacceptable in the workplace, and they must be taught skills on how to intervene when they observe harassing behavior. Leaders need to clearly and repeatedly set forth their values and expectations and hold people accountable when they contravene those expectations.

In its report, the EEOC issued a roadmap for such a proactive harassment prevention program. Sixteen months — and thousands of sexual harassment claims later — it's clear how desperately such a roadmap is needed. Walking down this road will not just keep employees safe. It will also help businesses avoid the financial and reputational damage that comes with ignoring harassment prevention.

Chai R. Feldblum is a Commissioner at the Equal Employment Opportunity Commission. Sharon P. Masling is Chief of Staff to EEOC Commissioner Chai Feldblum at the Equal Employment Opportunity Commission.

This article is reprinted from Harvard Business Review with permission. ©2018. All rights reserved.

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