Chipotle CEO Brian Niccol and PayPal CEO Dan Schulman joined Andrew Ross Sorkin on CNBC’s Squawk Box Tuesday morning to discuss why investing in their workers’ financial well-being is a top C-suite priority, and how they’re taking action. Their appearance came after companies representing more than 260,000 American workers, including Chipotle, Chobani, Prudential Financial, Verizon, and Even, joined PayPal in making a commitment to assess their workers’ financial health through the Worker Financial Wellness Initiative.
A founding partner in the Initiative, PayPal took action to bolster its workers’ financial health after 2018 survey results revealed that almost half of the company’s workforce was struggling to make ends meet each month, Schulman said. He wasn’t surprised by these findings, he said, pointing to a 2017 CareerBuilder survey showing that 78% of U.S. adults live paycheck-to-paycheck.
Since then, Schulman noted, PayPal’s raised its employees’ net-disposable income from about 4-6% to 18%, on-track to meeting its target of 20%. This also inspired the company to help make investing in workers’ financial well-being an urgent item on the agenda of C-suites and boards across corporate America. “We decided to come together to encourage other companies, like Chipotle, to look at what is the real assessment of their workers’ financial security and financial health,” Schulman said. “And see what we could do to try and address this kind of national crisis that we’re facing.”
For Chipotle, the decision to take this on also came down to seeing its employees living paycheck-to-paycheck, Niccol said. The company’s since increased wages for all employees by close to 20%, he noted, and bolstered benefits. “Now the average wage starting in our company is around $15,” Niccol said. “We tie that in with education reimbursement as well as debt-free degrees, and we’ve seen just a dramatic change in people’s retention as well as their confidence in their future.”
Schulman also shared the success PayPal’s seen by taking action on worker financial security. “When we made this investment in our employees, just like we invest in marketing, just like we invest in research and development, the payback was tremendous,” he said. The company saw all-time highs in employee engagement scores, net-promoter scores with customers, and employee retention, Schulman said, helping benefit its shareholders alongside stakeholders like employees and customers.
— Squawk Box (@SquawkCNBC) July 13, 2021
“This kind of investment is essential if you ever have any hope of moving from being a good company to a great company. It all rests on the back of our employees,” he said. Learn how your company can join leaders like Chipotle and PayPal in the Worker Financial Wellness Initiative here.