Fama: Why companies should pay attention to workplace misconduct

Why did you start Fama? Why workplace misconduct and why now?

I started Fama after I was part of a team that hired a VP of Sales who within 6 months of joining the team sexually harassed our top salesperson. She quit. We fired him. After that, we debriefed on what went wrong and we discovered he had written a bunch of misogynistic posts online.

Had we seen the posts before, we would have never hired him. That’s why I founded Fama – to help other organizations solve this very problem.

Let’s talk about misconduct. How do you define it? And how would you summarize how most of your clients define it?

We consider misconduct to be any behavior that violates an employer’s code of conduct and harms the organization, its employees, or its customers. We currently screen for nine different types of misconduct, including crime and illegal activity, violent and threatening behaviors, hate speech and intolerance, harassment, and more.

We recognize that not all organizations have the same definition of misconduct. That’s why our solution is configurable, enabling our clients to screen for misconduct that violates  their organization’s unique code of conduct. A great example of this personalization is around screening for things like cannabis use – some organizations care a lot about this where others couldn’t care less.

How will workplace misconduct technology influence the future of work?

From a technology perspective, several factors will shape these technology solutions:

1. Prevention – these tools will look at helping companies hire great, quality people that are unlikely to engage in misconduct.
2. Intervention – these tools may offer HR teams a platform for intervention to have discussions with employees on why a misconduct-free workplace is critical to future success
3. Resolution – there are a range of tools on the market today, including software such as AllVoices, that helps report and resolve active misconduct in the workplace.

What kind of technology does your platform utilize and how accurate is it? How accurate is online screening in general?

Our solution combines AI and human oversight that allows us to find candidates online and compliantly screen public data across over 10,000 online sources for workplace misconduct.

Across the nearly 50 million reports we have run, our solution helps ensure users don’t invade a candidate’s privacy. We do that by removing protected information as well as candidate behaviors that aren’t relevant for the job at hand. We deliver reports to our clients with over 99.5% accuracy and are able to do this in one business day.

Your approach is about understanding what someone’s values are and if they align with the public and hopefully private values of an organization. Why is that so important?

Companies with great corporate cultures aren’t just great places to work. They are more profitable than their competitors. Over a long period of time, companies on Glassdoor’s Best Places to Work list actually outperformed the S&P 500 by over 120%.

The biggest threats to a positive corporate culture are people coming in, engaging in toxic workplace misconduct, and driving great, quality employees away. Harvard Business School studied 60,000 employees and found that incivility leads to some alarming outcomes for the rest of the team, including:

1. About 50% of employees intentionally chose to spend less time at work
2. 38% “intentionally decreased” the quality of their work
3. 25% of employees admitted to taking their frustrations out on customers
4. 12% left their jobs because of the incivility

On the other hand, HBS also found that organizations who refuse to hire a toxic employee, even if they are rainmakers, see a 3x return on their bottom line.

The stakes for companies are extremely high. In terms of who engages in misconduct and what kinds of candidates companies should screen, the truth is workplace misconduct can be committed by anyone.

Executives are the people who are setting corporate values, the vision for the future, and the short and long-term goals of the company. For these candidates, it’s extremely important to undergo a comprehensive screening process, and to understand if and how they walk the walk. This is why our Executive Due Diligence solution, 360, is one of our fastest-growing solutions right now.

But, that’s not all.

A lot of companies come to us after a few different things happen:

1. They realize their hiring teams are looking up candidates online manually. In this case, they realize it takes forever, they miss important things, and they see protected information that is impossible to unsee, which increases risk of discrimination and subsequent legal action. You can’t unsee a disability, a pregnancy announcement, a same-sex marriage, or the announcement of a new baby when doing this manually. One of our clients – an NFL team – came to us after screening manually and realizing it was exhausting and incomplete. After partnering with us, they get way more comprehensive search results back in a day. It’s a huge shift, and they have told us they are never going back.
2. There’s an incident and they want to prevent the incident from happening again. One of our clients is one of the largest hospital networks in the U.S.. They came to us after some of their doctors and nurses posted online about wanting to give patients who are Jewish the wrong medication – and the appropriate level of backlash and outrage ensued. Another client – one of the largest makeup brands in the world – came to us after one of their spokespeople was outed for racist tweets a few years back. We have also found some more shocking behaviors like doctors selling body parts on Twitter and the dark web and have also prevented active shooter situations.
3. They hear about similar incidents from others and want to prevent them. We partner with a large number of financial service firms that are well aware of everything from data breaches to workplace violence. Similarly, we partner with a large number of police departments who use us to screen candidates before hiring them to ensure integrity, objectivity, and safety among their new hires. These firms use us to stay ahead of the curve and ensure that their organizations aren’t impacted by extreme gross misconduct.

We are now operating in a world where every employee transgression has the potential to compromise a brand. Is that primarily why digital forensic platforms have gained such significance in recent years?

We are living our lives more online than ever before. While the positive here is that we have more access to information and connectivity, the con is that the same is true when bad things happen.

Beyond increased activity online, there are several other factors at play here:

1. Companies lose an average of 5% of their annual revenues to occupational fraud, which amounts to nearly $4 trillion a year. They spend between $300 and $1000 per employee on harassment. And, employee theft costs companies $20 billion a year. The cost is huge.
2. We have fewer and fewer opportunities to meet new hires in person. Despite proclamations on LinkedIn and a range of new RTO policies, office occupancy rates in NYC still hover around 50%. HR teams are constantly seeking quality candidates, and that was made more difficult without face-to-face meetings.
3. Misconduct is a problem. It’s pervasive. And, it’s preventable. This is why regulatory bodies are starting to crack down on misconduct issues, strengthening whistleblower protections, and increasing accountability for different stakeholders across a company – including C-level executives and board members.

All of these will lead companies to take a look at their policies, processes, and technologies to really dive deep into identifying, preventing, and navigating misconduct at work.

Learn more about how Fama can help you reduce workplace misconduct and improve quality of hire here.