By Samantha Delbick

The topic of sexual harassment has been at the forefront of public discourse since the #MeToo movement burst into the public consciousness during the fall of 2017. With people emboldened and continuing to share their stories, the anti-sexual harassment movement shows no signs of slowing down or fading anytime soon. Just as the Senate Confirmation hearings in 1991 concerning Anita Hill’s claims against then Supreme Court nominee Clarence Thomas ushered in a period of changing attitudes towards women in the workforce,[1] America’s business owners are once again faced with the task of adopting to new norms or risk potential ruin from public criticism. The widespread and pervasive use of social media platforms, such as Twitter and Facebook, has given a public voice to workplace victims. Businesses need to accept this new reality wherein employees are more aware of how they should be treated and are not afraid to speak out when treated improperly.[2] This article demonstrates how business owners that choose to adapt and take a proactive approach to creating a more welcoming and harassment-free workplace environment for their female employees could be rewarded by stronger public relations, higher talent retention rates, and lower costs.

Business owners that choose to adapt and take a proactive approach to creating a more welcoming and harassment-free workplace environment for their female employees could be rewarded by stronger public relations, higher talent retention rates, and lower costs.

Benefit #1: Improving Public Opinion

When Harvey Weinstein was forced out of the film industry following numerous allegations of sexual harassment, his company, the Weinstein Company, filed for bankruptcy sold its assets, and ceased to exist. The public clearly does not limit its contempt to the particular perpetrators of the harassment; the businesses that allowed such behavior inevitably come into the public spotlight as well. A high profile sexual assault case can be catastrophic for a business.[3] However, companies can take preemptive steps to prevent allegations of sexual harassment. Businesses can implement anti-sexual harassment programs, publicize the new programs, and use the positive media coverage to grow their business.

Since the public cascade of accusations against Weinstein, companies have been adding sexual harassment training programs. One such online training company, Traliant, added 95 new clients during the two months following the Weinstein allegations.[4] Following the fallout from its own scandal, Vox announced that all its employees would undergo a new online harassment training program and that there would be additional training for their managers.[5] Such efforts are a step in the right direction, but a bipartisan Equal Employment Opportunity Commission task force released a report in 2016 that criticized sexual harassment training for focusing mostly on protecting a company from lawsuits instead of focusing on creating a “diverse, inclusive, and respectful workplace” that holds harassers accountable for their actions.[6]  Companies that are taking steps to build a more respectful workplace are receiving positive coverage for their advances. For example, the Wall Street Journal mentioned Mastercard’s “commitment to diversity and inclusion” for their efforts to tackle “complicit silence” and create opportunities for workers to “come together and talk candidly about the issue.”[7] Other companies, following the advice of the Equal Employment Opportunity Commission (“EEOC”), believe the solution lies in engaging their workers in “encouraging frank conversations and examining warning signs before bigger problems emerge.”[8] Tech companies, such as Uber, Lyft, and Microsoft, have scrapped mandatory arbitration agreements for harassment claims.[9] While the precise social impact of these new programs is not yet quantifiable, such efforts are certainly attracting positive coverage for the companies willing to initiate and support these types of programs.

Benefit #2: Retaining and Advancing Talented Women

In addition to strengthening their public profile, companies that properly handle accusations of sexual assault and actively work to create a workplace free from sexual harassment will be better positioned to attract and retain the most talented female employees. Women who are harassed at work are 6.5 times more likely to quit their jobs, and many are so traumatized they leave the field they have spent their life working in.[10] As such, programs to limit sexual harassment are key to reducing the turnover of talent.

The challenge in retaining talented female workers does not only stem from overt sexual harassment. Gender-based obstructions to women advancing in the workplace can occur when men are not sure how to act around female employees and co-workers in the era of #MeToo. The lack of clarity about how to behave around female colleagues can result in the denial of networking and mentorship opportunities, which can negatively impact women’s careers. A LeanIn Survey Monkey study recently produced the following findings: Senior level men are 3.5 times more likely to hesitate to have a work dinner with a junior-level woman than with a junior-level man; they are 5 times more likely to hesitate to travel for work with a junior-level woman, and about 30% of male managers are uncomfortable working alone with a woman.[11]

Senior level men are 3.5 times more likely to hesitate to have a work dinner with a junior-level woman than with a junior-level man; they are 5 times more likely to hesitate to travel for work with a junior-level woman, and about 30% of male managers are uncomfortable working alone with a woman.

Denying women such opportunities for outside mentorships, travel, and sought-after work assignments impose additional obstacles in their careers that their male counterparts do not face. A 2018 Pew Research Center study confirms that this issue plagues the American workplace. The Pew study found that 51% of Americans believe that the increased focus on sexual harassment “has made it harder for men to know how to interact with women in the workplace.”[12] Businesses that fail to acknowledge and address this issue are missing out on opportunities to retain and advance qualified women simply because senior men do not treat women the same way as they treat male junior level employees.

Given the pervasiveness of the #MeToo Movment this fear on the part of men is not entirely unwarranted. Rather, companies should appreciate that the #MeToo Movement has brought these concerns into the spotlight. Businesses should take a proactive response to the survey findings and do more to retain and advance women. Businesses can follow in the model of KPMG, which has received praise for its commitment to diversity, and in 2015, became the first big four accounting firm to have a female CEO.[13] KPMG recommendations include employee training in unconscious bias, commitment to mentoring and sponsorship, and commitment from top leadership regardless of gender.[14] Companies should seek out the programs that work best for them to be able to promote diversity and retain talented female employees.

Benefit #3: Lowering Business Costs

Finally, sexual harassment claims are expensive. In 2016, the EEOC reported that they had recovered over $164 million for plaintiffs alleging sexual harassment the previous year – with the huge caveat being that complaints were likely vastly underreported.[15] This number will only increase as more people are confident enough to come forward and make public claims as a result of #MeToo. But increased legal costs are not the only loss companies can incur by protecting predators on their payroll. The cost due to employee turnover and the value of ideas that could have been generated if people did not leave their fields must also be considered.

While the exact costs are unknown, previous estimates are jarring. A 1988 study conducted by the World Economic Forum found that each Fortune 500 company lost nearly $7 million every year due to turnover and productivity losses related to sexual harassment.[16] A 1994 US Merit Systems Protection Board study estimated that sexual harassment cost the Federal Government $325 million over a two year period,[17] long before the #MeToo Movement empowered an avalanche of women and men to speak up. More recent data could be available soon, as Senators are calling on the Government Accountability Office to quantify the economic losses companies incur due to sexual harassment.[18]

Conclusion

Businesses cannot afford to continue to tolerate sexual harassment. Businesses that do will lose significant female talent to rivals that do not tolerate such behavior, and the market will punish them accordingly. The costs of creating a harassment free workplace are “trivial” in comparison to the lost talent, cost of turnover, and monetary loss from sexual harassment claims, and the rewards to companies that successfully do will be large.[19]

[1] See Sarah Pruitt, How Anita Hill’s Testimony Made America Cringe—And Change, History (Sept. 26, 2018), https://www.history.com/news/anita-hill-confirmation-hearings-impact.

[2] Elizabeth C. Tippett, Adapting To The New Risk Landscape, Harvard Business Review (Feb. 1, 2018), https://hbr.org/2018/02/adapting-to-the-new-risk-landscape.

[3] Id.

[4] Sue Shellenbarger, Sexual—Harassment Training Gets a Revamp, The Wall Street Journal (Dec. 19, 2017),  https://www.wsj.com/articles/sexual-harassment-training-gets-a-revamp-1513696545.

[5] Sexual—Harassment Training Gets a Revamp, supra note.

[6] U.S. Equal Employment Opportunity Commission, Select Task force on the Study of Harassment in the Workplace: Report of Co-Chairs Chai R. Feldblum & Victoria A. Lipnic (June 2016).

[7] Id.

[8] Vanessa Fuhrmans, What #MeToo Has to Do With the Workplace Gender Gap, The Wall Street Journal (Oct. 23, 2018),  https://www.wsj.com/articles/what-metoo-has-to-do-with-the-workplace-gender-gap-1540267680.

[9] Id.

[10] Joan C. Williams and Suzanne Lebsock, NOW WHAT? Social media has created a remarkable moment for women, but is this really the end of the harassment culture?, Harvard Business Review (2018), https://hbr.org/cover-story/2018/01/now-what.

[11] #MentorHer—Key Findings, LeanIn, (2018), https://leanin.org/sexual-harassment-backlash-survey-results#key-finding-1.

[12] Prudy Gourguechon, How One Company Responded Proactively To The #MeToo Backlash, Forbes (July 29, 2018), https://www.forbes.com/sites/prudygourguechon/2018/07/29/one-companys-proactive-response-to-the-metoo-backlash-and-yes-thats-a-real-thing/#2b0a10ce508b.

[13] Id.

[14] Id.

[15] U.S. Equal Employment Opportunity Commission, supra note 5

[16] Li Zhou, No One Knows The Economic Cost Of Sexual Harassment. These Senators Want To Find Out, Vox (June 29, 2018),  https://www.vox.com/2018/6/9/17441614/sexual-harassment-cost-me-too-gillibrand-murray.

[17] Id.

[18] Joe Davidson, #Metoo, #Nomore, Now #Howmuch? What Is The Cost Of Sexual Harassment?, The Washington Post (June 8, 2018),  https://www.washingtonpost.com/news/powerpost/wp/2018/06/08/senators-continue-search-for-sexual-harassment-economic-data-after-labor-dept-refuses-to-help/?utm_term=.f121d34b13e0.

[19] The Capitalist Case Against Sexual Harassment, The Economist (Oct. 21, 2017), https://www.economist.com/leaders/2017/10/21/the-capitalist-case-against-sexual-harassment