New data show small companies with fewer than five employees are less likely than their larger counterparts to have formal policies in place when it comes to sexual harassment in the office, but since the #MeToo movement began, 5 percent of small businesses say they have fired or suspended an employee.
A survey of more than 2,000 small business owners found that half of small-business owners have a formal policy on how to handle harassment claims. But at businesses with zero to four employees, only 39 percent had such policies, compared to 85 percent of businesses with 50 or more employees, according to the CNBC/SurveyMonkey Small Business Survey.
In the wake of the string of high-profile sexual harassment accusations and the #MeToo movement, firings and suspensions have not been common among small businesses, but Main Street has become more aware. Eleven percent of businesses said they've issued company-wide communications to remind people of sexual harassment policies and reporting procedures, while 9 percent say they've reviewed policies around diversity and gender equality in hiring and promotion. In addition, 7 percent have required new or additional training, and 4 percent have rolled out new reporting procedures.
Overall, 61 percent said they'd not taken any of the above actions.
"This is one of those issues that entrepreneurs may tend to overlook, and it's something that sneaks up on them," said Karen Kerrigan, president and CEO of the nonpartisan advocacy group, the Small Business & Entrepreneurship Council. "They may believe the culture they've established is one of respect, and that is enough to send a message that inappropriate behavior is unacceptable and it won't happen in their workplace. But given the high-profile nature of the issue and how it has played out in every sector, that should be a wake-up call to business owners."
What's more, the business owner is often the one handling these claims in the place of a human resources professional, which could seemingly make it more challenging for employees facing issues to speak up. Some two-thirds of the smallest businesses polled by CNBC and SurveyMonkey said that the business owner is responsible; 3 percent said a human resources professional handles harassment issues. Ten percent of these companies said there is no specified way to handle harassment.
The numbers flip significantly at businesses with 50 or more employees, where only 15 percent of business owners said they were the ones to handle harassment claims, 62 percent went to human resources staff and 6 percent said there is not a specific way to handle these claims.
Having business owners handle claims directly isn't always in the company's best interest, according to experts.
"A business owner can't be completely objective," said Sharon Sellers, president and CEO of SLS Consulting LLC in Santee, South Carolina, a human resources services and training firm. "It can be a conflict of interest — and what if the harasser is the owner? People in leadership positions have a lot of great talents but usually are not trained in HR or workplace investigations."
Sellers adds that smaller businesses are exempt from federal law in terms of being responsible for having sexual harassment policies, but that doesn't mean they should opt not to establish them.
"I would encourage them to get these policies in place so that when they do hit the magic number of 15 employees, they have established respect and don't have to do anything," she said.
The CNBC/SurveyMonkey data is underscored by additional research from the Society for Human Resource Management, which finds that 87 percent of businesses with 1 to 99 employees have sexual harassment prevention measures in place, compared to 96 percent of businesses with 100 or more employees. The number jumps to 97 percent of businesses with 500 or more workers.
"You can't turn a blind eye to this issue," Kerrigan said. "No matter how remote the chance of sexual misconduct or harassment may seem when you are starting out — the financial, reputational and productivity costs to your business are way too high" to risk not having a formal policy in place.
There is also a divide between male and female-owned small businesses, in which slightly more male-owned businesses (13 percent) said they'd taken action in the wake of these accusations and #MeToo, compared to 9 percent of female-owned businesses.
The CNBC/SurveyMonkey poll was conducted Jan. 29 through Feb. 5, 2018, among 2,080 self-identified small-business owners age 18 and up. The polling was done across a wide swath of industries, and the respondents were selected from the nearly 3 million people who take polls on SurveyMonkey's platform daily using it's online polling methodology. Responses have a margin of error of +/- 3.5 percentage points.