4 Ways a Good Jobs Strategy Leads to Better Business Outcomes
Last week, JUST Capital hosted a briefing call on the growing importance of quality jobs in America, and the ways that investments in frontline jobs can lead to better business outcomes. We dug into this topic in conversation with Michael Mussallem, Chairman and CEO of Edwards Lifesciences – a JUST 100 company that prioritizes the pay, benefits, and opportunities of its employees – and Sarah Kalloch, Executive Director of the the Good Jobs Institute, which was co-founded by Professor Zeynep Ton of MIT Sloan and focuses on shifting business performance by focusing on creating good jobs in low-wage industries (particularly retail).
With worker pay and well-being a core priority for the American public when it comes to just business, JUST Capital is committed to continuing to surface the business and investor case for good jobs. Our own analysis shows that companies who treat their workers well consistently outperform their peers at the market level.
Check out four key takeaways for corporate leaders from the call:
To fulfill your corporate mission, start by fulfilling workers’ basic needs.
For many companies, employee engagement and dedication to its mission are top priorities. The Good Jobs Institute outlines a hierarchy of workers’ needs that shows that, if companies seek to meet these goals, they must first start by creating good jobs.
A medical technology company based in California, Edwards Lifesciences has 14,000 employees globally and a notable manufacturing workforce in the U.S. Mussallem, in describing the company’s culture, emphasized that its company-wide commitment to patient outcomes – and the connection it fosters between employees and the patients they serve – is vital to Edwards’ success.
Ranked 20th overall on worker issues in our 2020 Rankings of America’s Most JUST Companies, Edwards is first in its industry when it comes to paying workers a living wage and top in class for providing good benefits. Given these achievements, it’s not surprising that Edwards’ employees report feeling a strong sense of commitment to patient health and outcomes, and have higher retention rates than employees at other companies in their industry.
Break the cycle of viewing people as a cost.
Too often businesses view their human capital as a cost to the company, but a core tenet of the Good Jobs Strategy is around reversing this view, which Kalloch explained can trigger a vicious cycle that harms business outcomes. Beginning with low investments in people, this cycle often starts with operational problems, which lead to low sales and profits as a result. From there, companies might look to reduce expenses, and too often cut costs from their workforce, further reducing investment in their people. The cycle repeats. Kalloch encouraged companies to turn this cycle on its head – suggesting that when corporate leaders view their workforces as an investment from the get-go, they improve rather than hinder business operations and outcomes.
Create an operating system that leverages the talents of your workforce.
After companies break this cycle and invest more meaningfully in their workforce, they should create an operating system that fosters and maximizes the talents of their workers. Kalloch explained the Good Jobs approach to doing so – a three step process: First, focus on the work employees need to do to meet customers’ needs and simplify processes. When workers are juggling unrelated tasks, stretched thin, or spending too much of their time on non-customer activities, they are less effective and productive on the job. Beginning with this area of work – and simplifying employees’ day-to-day – helps workers become more effective in their interactions with customers, in turn supporting the bottom line. Second, standardize systems and empower workers. By creating a clear line of communication between frontline workers and corporate management, companies can more quickly receive feedback that impacts business decisions. Finally, develop systems for cross-training employees. Training employees on a handful of jobs that are more focused in scope will not only help build a more engaged workforce but also better position stores to respond to variability or unexpected workforce needs. Combined, these operational changes will improve worker productivity and customer satisfaction.
Invest in workers to improve business outcomes.
This is the bottom line of the Good Jobs Strategy. Analysis of companies that have implemented the strategies described above – including Walmart and Quest Diagnostics – shows that when these businesses broke the cycle of viewing people as costs and started implementing new practices that maximize the potential and talent of workers, they observed significant business improvements. At Walmart, for example, turnover declined by more than 10% over the last five years, and at Quest Diagnostics, it decreased by 35%. Over the same period, store sales were up at Walmart and Quest Diagnostics saw a $1.3 million annualized run-rate savings. In short, when companies start by investing in workers, they are able to more easily achieve their core mission, and see measurable returns on their investments.
Check out the full conversation on quality jobs here:
For more information on the Good Jobs Institute, and our work in collaboration to build the case for quality jobs, read more here. If you’re interested in speaking further about this research, please contact our corporate engagement team at corpengage@justcapital.com.
