I know the title of this blog post is provocative. It was meant to be. A lot of times businesses tend to only focus on the dollars and cents of the decisions they make or, in many cases, fail to make. But, I want to focus on something else that can create an even bigger problem for your company; the loss of talent that inevitably walks out the door when an employee is treated unfairly! And, it is not just the individual person at the center of the unfair treament that quits; their co-workers may walk out too. But first, let's talk about the numbers.
According to the latest study from Jury Verdict Research, employment verdicts continue to be on the rise. The median award for all types of employment claims rose a sobering 60% in the past year, from $204,000 to $326,640. Discrimination verdicts increased by 16%, from $208,000 to $241,119. The median employment claim settlement amount (for reported settlements) topped-out at its highest level in the past decade at $90,000. Retaliation related verdicts were the highest ever during the study period. Although sex and race discrimination claims are the most common awards, claims of age and disability discrimination received the most compensation from juries.[1] So, your attitude may be that this is all a part of doing business or you convince yourself that you can always make more money. Okay...
Let's discuss where it really hurts; your company's reputation and the loss of talent. The damage to an organization’s reputation following a significant judgment against them for discrimination that is made public is incalculable. Couple this with social media and the 24-hour news cycle, and your clients and customers will abandon you in a matter of days, if not sooner. While your clients and customers are abandoning you, so is your workplace talent. It is estimated that discrimination-related incidents and poor diversity/inclusion management account for 25-40% of workforce attrition and 5-20% in lost productivity. The cost to replace an employee can be upwards of 150% of salary and full recovery of their individual skill sets is virtually impossible. Do I have your attention?
Effectively managing diversity within the workplace is a business decision that affects your entire bottom line both negatively and positively. In an article entitled "The Effects of Diversity on Business Performance: Report of the Diversity Research Network", a key finding in their research surmised that there was a “… need to be like our customers, including the need to understand and communicate with them in terms that reflects their concerns.“[2] As an employer and its employees, understanding cultural diversity and inclusion policies as well as managing within the law as it relates to Equal Employment Opportunity (EEO) and non-discrimination practices is critical. This starts with ensuring that each of your employees understand that they are individually responsible for their conduct and that of their co-workers, subordinates, and even contractors when they observe behavior that is not in compliance with Federal and State laws or company policies regarding non-discrimination and EEO implementation. This should be a top priority for any business. Failure of your company and/or individual employees to adhere to these requirements creates a costly liability as identified above.
Non-discrimination and EEO training must be engaged in on a regular basis. Consistently reinforcing to your employees and others that you do business with that your policies and procedures as they relate to diversity/inclusion and non-discrimination are good business practices. These simple reminders can go a long way in helping to prevent any type of discrimination, whether deliberate or inadvertent, r subsequent administrative or legal actions being taken internal or external to the organization. Employees and others that you do business with must understand that making decisions on factors other than merit exposes your business and the individual to legal liability. Within this context, employees and others must also understand their responsibilities as it relates to the following 9 core requirements to sustain a positive workplace:
The law
Retaliation (against an individual for having filed or been a witness to a discrimination complaint)
Responsibilities of managers and supervisors
Individual employee responsibilities
How to report or file a complaint
Who investigates complaints and how
Behavior that can be deemed offensive
How to maintain positive work environments and public contacts
Appropriate communication (Verbal, Non-Verbal, Written)
LaPonda J. Fitchpatrick can provide you with the necessary policy and procedure development, training, and review that protects your bank account and your talent pool. Find out more at www.trainingfortherealworld.com.
[1]Jury Verdict Research report on Employment Law. http://manpowergroupblogs.us/employment_blawg/2009/11/16/latest-jury-verdict-research/
[2] Kochan, T., Bezrukova, K., Ely, R., Jackson, S., Joshi, A., Jehn, K., ...Thomas, D. (2003, Spring). The effects of diversity on business performance: Report of the Diversity Research. http://smlr.rutgers.edu/search/node/the%20effects%20of%20diversity%20on%20business%20performance