How can advisory firms prevent sexual harassment in the workplace and mitigate the impact if it occurs? It’s a hot issue during these times of #MeToo and Time’s Up.
Even before The New York Times broke the story about Harvey Weinstein’s sexual harassment history in early October, the XY Planning Network, a group of fee-only advisors working with Gen X and Gen Y clients, began its annual conference in September with the introduction of a new code of conduct that prohibits discrimination and sexual harassment. Its conference app even included a function to report any inappropriate conduct.
There are many reasons financial advisory firms should take steps to avoid incidents of sexual harassment, key among them the need to attract more female advisors to an industry dominated by men. Women control more than half the wealth in this country, tend to outlive men and more often than not often switch advisors once they are widowed.
Companies should take action to prevent sexual harassment in the workplace because it’s the right thing to do and for business reasons as well, says David Gabor, a partner at the Wagner Law Group, which specializes in employment and business law and issues arising from the employer-employee relationship.
Charges of sexual harassment not only can damage company morale and a firm’s reputation, making it more difficult to attract talent, but can also result in the release of confidential corporate information, bad publicity and millions of dollars in fines. Once a harassment complaint is filed with the federal Equal Employment Opportunity Commission (EEOC) or the equivalent state offices, for example, they cannot be settled with confidentiality provisions even if there is no trial, says Gabor.
The federal EEOC reports that it recovered $164.5 million for workers alleging sexual harassment in 2015, and those costs don’t include “decreased productivity, increased turnover and reputational harm.” They also exclude legal fees.
In addition, under the newly enacted tax law, employers who settle sexual harassment claims can no longer deduct that payment or attorney’s fees related to the settlement if the settlement is subject to a nondisclosure agreement.
Gabor, who recently led a webinar on sexual harassment, has developed a top 10 list for how companies can protect themselves and their employees from incidents of sexual harassment and potential fallout, much of it centered on training and hiring.
1. Training must be relatable to the audience with a clear set of expectations for employees, and preferably live and interactive.
“We have to get people talking,” says Gabor. “Canned, web-based training minimizes the message.” They also appear as if the employer is more interested in limiting its liability rather than creating a safer and proper workplace and shift the burden of addressing sexual harassment from the employer to the employee, says Gabor.
He recommends that if a company can’t have in-person training sessions it includes an introduction by a C-level executive in any web-based training program.
2. Hold forums or town hall-style meetings for employees to talk through issues and possibly outside the office with human resource department reps or other facilitators.
3. When hiring, focus on the people skills of applicants, not just the technical skills needed for the job. Gabor notes that when employees are fired the reasons often relate to “personality” or “cultural fit,” not job skills.
He suggests that companies “change interview techniques” to suss out an applicant’s people skills. “Get the candidate out of interview mode and learn more about the person. Go to lunch, have coffee or cocktails. See how they comport themselves and react to others.”
4. Have top-down support to address sexual harassment. Build a corporate culture that unites employees but strives to always do better. Use training to reinforce such a culture, vision and message.
5. Insure that Human Resources has the power to resolve cases involving sexual harassment. “Many HR people tell me when they a find a problem they can’t do anything about it. They don’t have the authority,” says Gabor. “If HR doesn’t have the authority then the C-suite does.”
It’s also important to treat all alleged harassers the same, whether they’re a rainmaker or midlevel manager, says Gabor.
6. Insure that managers are ready in advance to respond to charges of sexual harassment when they occur. ”Train midlevel managers to know what to do on a day-to-day basis, to know what to look for. They are incredible resources, the eyes and ears. They see what the C-suite and HR don’t see,” says Gabor.
7. Make sure managers respond promptly to complaints, reach out to HR and follow up with employees who have complained about sexual harassment. “Employees often feel they have no power. They fail to complain, lack trust in HR and are afraid to complain. Give employees a voice. A voice equals power. Make them feel valued and respected.”
8. Define “relationship” so that employees and HR know what that means. “Dating will happen in many companies,” says Gabor. “But when does it begin? What if it fizzles? And what if one person is subordinate to the other?” The ambiguity could lead to problems.
9. Consider early resolution programs in response to charges of harassment such as mediation, coaching and mentoring. “Try to solve problems early on.”
10. Assess the firm’s existing corporate culture. Review how any past complaints of sexual harassment were handled. Also review what has happened in the industry and how it responding and is changing.
— Related on ThinkAdvisor:
- Condom Pizza and Breast Milk Shots: True Stories From a Woman on Wall St.
- Sen. Warren Leads Query to SEC, FINRA on Sexual Harassment in Finance
- Morgan Stanley Fires Ex-Rep. Harold Ford Jr. After Accusation by Woman