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Too many founders have learned the hard way that the actions of weak people can put their employees at risk, their company at costly legal risks, and leave a permanent stain on their reputation.
Today’s employees seek value-driven companies and come to them with a deeper understanding of their rights. If your HR department doesn’t culturally screen candidates and speak candidly to you about the impact of key hires, your ability to lead your organization to future success will be compromised.
Worse, if your human resources manager is not trained to act impartially or is not authorized to intervene quickly, this can lead to systemic problems that will prevent victims from getting justice. This pushes victims to seek other remedies, which appear daily in viral appeals and high-profile court cases.
Unflattering headlines aside, many startups may find their financial value diminished once they have gained momentum. If it’s not attorney fees and settlement costs, it’s the loss of clients and potential partners due to negative coverage. Even if a lawsuit exonerates your company, a simple accusation can come at a price, and lengthy legal battles can expose the company’s delicate internal affairs.
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To prevent this, you must focus on how to build a respected and experienced HR team that is empowered to handle allegations of misconduct from the outset, even if someone on your executive team is involved. You must create a culture that supports identifying, investigating, and punishing misconduct in the workplace—whether it be harassment or discrimination, bullying, or any other illegal activity.
When building your Human Resources department, follow three steps to help you avoid misconduct in the first place—or, if it does occur, ensure that it is resolved quickly and consistently.
1. Hire experienced HR leaders who share your company’s values.
It can be difficult for HR staff to determine which aspects of a complaint are true and which are not. Add to this an imbalance of power like that between a manager and a subordinate, and HR can be squeezed not only between two employees, but also between high-ranking employees who want the problem to simply disappear. If you have not hired HR professionals with experience in negotiating the necessary negotiations and uniform compliance with the rules, you may be held liable for any subsequent misconduct.
As a founder, you must prioritize hiring HR managers who are strong and principled leaders. When interviewing potential candidates, ask them how they will handle serious allegations and what processes they will use to ensure a fair outcome for all parties. Based on their responses, you want to make sure they agree with your company’s values. You can also reach out to experienced HR leaders who have already faced tough employee accusations.
Once you have hired the right people, you need to make it clear that they have the authority and responsibility to deal with all allegations of misconduct equally, no matter who is accused, even if it is someone on your leadership team.
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2. Create protocols that protect victims and your company, not the accused
National Women’s Law Center study found that up to 70% of those who report harassment experience some form of retaliation. And 37% noted that nothing happened to the stalker after the complaint. But even when the company is involved, many will still outsource the process to third-party investigators and lawyers. It also follows a predictable pattern and usually ends with a benevolent acknowledgment of the complaint, followed by language indicating that the company has taken all steps required by law to resolve the complaint. What this really means is that they took as little action as possible to avoid liability.
Unfortunately for these companies, many experienced lawyers are watching and waiting. They know that investigative reports can contain incriminating information and will use the discovery process to gain leverage with their client. This can be avoided if the company takes appropriate action from the very beginning.
This requires, first, a fair and neutral investigation. It does not require hiring a third party firm. The victim’s allegations can often be verified by interviewing key personnel and examining written communications and other records.
Second, if the allegations are found to be true and serious, take immediate action to bring the perpetrator to justice. In many cases, this means being fired from a job.
To ensure that your process for investigating and adjudicating a case is followed by all parties, it should be based on protocols that apply equally to all allegations. This ensures that everyone involved, from HR to managers, the prosecutor and the defendant, will have the same rights and responsibilities.
3. Give HR the ability to fire toxic employees, even if they are high performers
Proper handling of the charge is rarely an issue when a low-level officer commits an offence. If an hourly worker commits misconduct, companies can often be counted on to take appropriate action. But when it’s a highly valued employee, decisions can be weighed against the perceived value the employee brings to the company. This reflects a lack of understanding of the true value of these people.
An abusive person in a leadership position can be worth more than many realize due to high turnover and performance issues. Half of the employees those who leave jobs do so at least in part because of bad managers, and replacing employees costs the company 50% of a person’s salary. In terms of performance, one study found that teams with toxic managers generate 27% less revenue per employee than well-managed teams.
A similar effect can be measured for public companies. When a high-ranking official of a public company is called for an offense, shock to the company’s share price can lead to a rapid loss of millions or even billions of dollars of market capitalization.
Protecting these abusive employees isn’t just wrong. This is costly and potentially fatal to your business. That’s why it’s important to make it clear to your HR department that it has the right to fire any employee based on the results of a fair investigation, even if they’re high-ranking or high-performing.
You may think that none of this applies to you, or that your company will never be blamed, but the numbers tell a different story. 60% US workers experienced or witnessed discrimination in the workplace, and unfortunately 40% reported reprisals after speaking up.
In each of these cases, the company was potentially liable. Increasingly, law firms are looking to intervene on behalf of these victims. You can protect your company and your employees by doing just that – by protecting theirnot the accused.