Workplace misconduct affects virtually every industry, but it is most prevalent in the restaurant and food service category, with reports finding up to 90 percent of women and 70 percent of men have experienced some form of sexual harassment. With unique industry-specific dynamics, the restaurant industry has an increased risk for creating workplace environments that enable harassment and discrimination. Whether fast casual chains or fine dining establishments, restaurants without proper solutions and management in place to mitigate these issues can face increased reputational and financial risk, hurting overall organizational performance. Due to this, it’s important that the restaurant industry understands not only the costs of not acknowledging these issues, but also that there are solutions available.
The Equal Employment Opportunity Commission (EEOC) recognizes that certain dynamics can increase an organization’s risk for workplace harassment. As such, it’s important for organizations with increased risk factors to recognize these risks and understand how they affect the health of their workplace culture, the employee experience and business performance.
Due to unique scenarios in the restaurant industry, such as multi-locations, younger workforces and customer-led compensation, workplace misconduct, such as harassment and discrimination, can often thrive, going unreported and unresolved, creating a hostile work environment. As many restaurants feature decentralized operations with multiple locations in addition to their corporate office, it removes an additional layer of supervision, placing responsibility solely on a location’s manager to ensure a healthy and safe workplace environment. By siloing employees to only that one location, they can oftentimes feel limited in how to report incidents they experience or witness, fearing retaliation from management for speaking up.
In addition to decentralized locations, the restaurant industry typically consists of younger workforces. The National Restaurant Association cites that 30 percent of restaurant employees are under the age of 30, while 60 percent are under the age of 35. These more adolescent employees may lack self-confidence or experience in the workplace to know what is and is not acceptable and to challenge or reject inappropriate behavior. They can also be susceptible to being taken advantage of. Whether it’s not reporting incidents or by engaging in misconduct, these employees may follow the guidance of anyone in a leadership position despite what is considered right or wrong.
Similarly, in a customer service-reliant industry, it is widely recognized that service and customer satisfaction is tied to compensation. While it is intended to reward employees for quality service and performance, it can increase the risk of employees enduring harassment or discrimination due to fear of missing out on compensation, such as tips, from customers.
By not recognizing these risk factors and the associated consequences from them, organizations in the restaurant industry can experience the full cost of mismanaged workplace misconduct. By allowing it to go unchecked, organizations can damage virtually every aspect of their business. For employees, toxic workplaces can cause increased rates of turnover, which can require costly hiring and training to replace employees that exit. Estimates show that employers pay around $4,700 per hire in addition to the cost of the hiring manager’s time and resources. In addition, with new employees consistently on the job, customer service may experience a dip in performance, as employees train and learn responsibilities.
As customer service is the bread and butter of the restaurant industry, reputation and customer experience are paramount to an organization’s success. When an organization is faced with allegations of workplace misconduct, it can cause reputational damage with every stakeholder, hurting the business’s bottom line and overall success. Remaining employees may be faced with customer backlash, while other partners may seek opportunities elsewhere.
Finally, if an incident of misconduct goes unresolved, it can be taken to litigation. This can be the costliest result of misconduct, costing companies millions in legal fees and settlements. The average cost to litigate, defend and settle one claim of misconduct can be around $160,000.
So, how do restaurants resolve this problem when they are already at an increased risk due to unchangeable dynamics and factors? There are a couple of proactive solutions that should be implemented immediately. First, every restaurant should have clear guidelines and policies for employees on what behaviors are and are not accepted in the workplace. While this seems like a no-brainer, it’s not only important that these policies exist, but that employees are aware of the policies and that they are clear.
In addition to these policies, employees should also have a clear understanding on what to do when they experience or witness workplace harassment to ensure that they report anything they witness for further investigation and ultimately resolution. Reporting should be available 24/7 through multiple avenues (Phone, Online, etc.) to ensure access and timely reporting. In addition, it’s preferred that reporting tools or solutions are third-party, removing any fear of retaliation from employees, while also preventing any bias, even unintentional, from entering the investigation. With decentralized locations, a third-party reporting solution will ensure that no one involved with a specific location is involved in investigating the issue, protecting employees while mitigating organizational risk.
While reporting is critical, it’s also important to leverage the data gleaned from these solutions. People analytics can inform decision making that drives organizational success and can help organizations pinpoint potential problems before they even occur. For example, multi-location restaurants may have various ongoing investigations and types of incidents that occur throughout their locations. By harnessing the analytics from those reports, organizations can identify hot spot locations, where harassment is more prevalent. This can lead to a closer look at the management team at the location, as well as additional factors that increase the location’s risk for misconduct. Trend and insights into the type of misconduct that is most prevalent within a location or multiple locations can also streamline resources, allowing an organization to roll out customized training to combat a specific type of misconduct vs. a blanket approach.
In any industry, it can be easy to take a reactive approach to misconduct, thinking that once a problem arises it can be dealt with. However, in the restaurant industry, the proof is in the pudding. With multiple risk factors and a history of unreported and mismanaged workplace misconduct, organizations need to proactively address the issues before they occur, having policies, processes and solutions in place to mitigate risk and protect their employees.
Jared Pope, an experienced Benefits and Employment Law attorney, founded Work Shield in 2018, revolutionizing workplace integrity. With 20+ years of expertise in human resources, ERISA, and employment matters, Jared recognized the need for a comprehensive solution to manage workplace harassment and discrimination. Work Shield’s innovative solution simplifies the reporting, investigation, and resolution of workplace misconduct. Its platform enables streamlined incident reporting through user-friendly channels while dedicated investigators conduct thorough, efficient, and impartial investigations. Employers benefit from real-time updates, unbiased recommendations, and valuable workplace analytics.
