At Baker Tilly, we know our people are integral to our business excellence. Our people solutions strategies support this success by providing healthy workplace cultures for our employees and leaders who treat them as people, not simply human capital.

With our busy season in the rearview mirror, we look forward to the summer and a chance to reward and celebrate our teams for their success and dedication to our clients. The workplace party has long been a key reward and culture-building tool in this regard. While the workplace party’s primary intent is to reward employees, they can also be a powerful organizational tool for employee attraction, retention, engagement, efficiency and, most profoundly, building a healthy work environment.

In this tech-connected world, an organization’s culture is shared widely and instantaneously, influencing their competitive advantage for better or worse. Employees boast about their workplace parties as a way of defining and describing the identity of the organization they belong to. Workplace parties are also crucially important to potential candidates. For example, millennials are more and more selective about the companies they will work with. The organization’s culture is a now fundamental area that candidates inquire about during the interview process. Candidates specifically ask what the team does for fun – and rightly so, as the workplace party is an excellent reflection of an organization’s identity.

The workplace party also acts as a tool for retention, engagement and efficiency by fostering relationship-building between colleagues, which is crucial to an effective workplace. For better or worse, we gravitate to the leaders and colleagues we are most comfortable with. Building relationships and understanding a colleague’s background increases interpersonal comfort levels, which creates workplace efficiencies. In his book “Return on Character: The Real Reason Leaders and Their Companies Win”, Fred Kiel provides hard data connecting a leader’s character to an organization’s results. A leader’s good character and strong relationships with their people ultimately filters down, generating a wealthier bottom line. Further, workplace parties can reduce costly turnover due to poor relationships and help build respectful workplaces where people connect outside of their familiar hierarchies and sightlines.

However, workplace parties do generate inherent risk and liability to both the employer and employee. Perhaps the most common example of a lawsuit with significant financial liability for the employer is the employee who harms someone after leaving a workplace party intoxicated. Employers should also be aware of other liability risks they face when hosting a workplace party.

In October 2018, Canada became the second country in the world to legalize the cultivation, acquisition, possession and consumption of cannabis, further complicating intoxication-related liability at workplace parties. In addition, respectful workplace policies are rapidly growing in importance with sometimes mandated anti-bullying and harassment training, all powerfully set within the environment of the #MeToo movement. These areas hold legitimate risk of liability, not only in the workplace, but at the workplace party.

In Canada, the employer’s liability generally focuses on questions of duty of care, and the relationship between the parties. The Supreme Court of Canada has stated that employers have a higher duty of care to the public than a social host, making employers vulnerable to third party injury liability at – and subsequent to – workplace parties. Furthermore, the courts are inclined to hold someone financially accountable for harm done. Since the employer is often able to pay, that financial responsibility can more readily shift to them.

Employers can use preventative measures to reduce and mitigate their legal and financial liability. Traditionally, these strategies include providing drink tickets, food, taxi vouchers, employee waivers, updating conduct policies and requesting coverage from their insurer.

Employees are also exposed to risk at a workplace party, as workplace policies and codes of conduct apply. They can be disciplined and even terminated, utilizing the organization’s performance management function. Commonly this applies to employees exhibiting unacceptable conduct at a workplace party, painting the employer’s reputation in a bad light, contravening workplace safety or violating harassment policies.

Employee risk can be greatly reduced if employees simply remember that they are publicly representing themselves and their organization while attending a workplace party. Cy Wakeman (author of “No Ego: How Leaders Can Cut the Cost of Workplace Drama, End Entitlement and Drive Big Results”) provides sound advice, arguing that people should bring their best self – not their whole self – to work.

Though risk is clearly inherent in workplace parties, the value gained by throwing that workplace bash, rewarding your team, building relationships and showing pride in your organization’s identity arguably outweighs the threat to your bottom line. To leverage your rewards effectively, work with Baker Tilly’s people solutions consultants. Now, for tomorrow.