Chipotle, PayPal, and Prudential Financial Highlight Why Worker Financial Wellness Should Be a Post-Pandemic Priority for Corporate America
Corporate America is navigating yet another uncertain stage of the COVID-19 pandemic. The spread of the Delta variant has many companies delaying or scrapping plans to return to the office. And many workers are looking to employers to expand flexibility and caregiving benefits should schools need to shutter. All the while, companies are continuing to struggle to hire.
Employees are leaving jobs at record rates and many are choosing not to re-enter the workforce whether that’s due to caregiving strains, health and safety concerns, or, importantly, wages. A survey of the American public JUST Capital conducted with The Harris Poll in July found that a majority of respondents think that companies should permanently increase their starting wages to improve hiring. Many companies have announced wage increases in an attempt to attract workers and keep up with their peers, but it remains unclear if this marks a lasting trend or whether the numbers companies are choosing for starting offers is enough.
Workers are looking for action, like earning a living wage, that will help set them up for long-term financial stability. A Prudential Pulse of the American Worker Survey from January found that 77% of workers want companies to provide resources and solutions to benefit their financial well-being. Companies participating in The Worker Financial Wellness Initiative are showing how corporate leaders can respond to this demand, and discussed it recently on a panel with the Aspen Institute’s Economic Opportunities Program. The group represents around 260,000 American workers, including Chipotle, PayPal, and Prudential Financial, and is committing to both assess the financial health of their workforce and take steps to improve it through measures like lowering the costs of health insurance and other benefits, offering financial counseling, and increasing pay.
The Wall Street Journal’s Lauren Weber illustrated the role corporate America has in helping secure working families’ financial health in an anecdote she shared to open the conversation. Reporting on overtime, Weber spoke with a young forklift operator who’s currently working 72 hours a week due to staff shortages. He earns overtime pay for a good portion of that work, but loses quality time with his daughter as a result. When Weber asked what his ideal work situation would be right now, rather than reduced hours, he said receiving a raise.
Marissa Andrada, Chief Diversity, Inclusion and People Officer at Chipotle, Sarah Keh Vice President, Inclusive Solutions at Prudential Financial, and Franz Paasche SVP, Chief Corporate Affairs Officer at PayPal, recently joined Weber to share how, and why, companies should prioritize worker financial wellness as they look to strengthen their operations, recruitment, and retention in a post-pandemic economy.
Watch the full conversation here and read on for key takeaways.
Get your employees’ input first
As a first step, participating companies in the Initiative commit to conducting a financial wellness assessment of their workforce to understand workers’ financial vulnerability and where they can take action. For Paasche, this assessment brought PayPal’s challenges to light in new, unexpected ways. “We found that for close to a third of our employees, and typically those that were hourly workers, that many, many were living paycheck to paycheck,” he said. “It shouldn’t have been a surprise, but we pay market wages and we are competitive in what we offer in our pay packages.”
PayPal determined that benchmarking against market rates wasn’t right for its workforce and, instead, it needed to find a new metric. That’s how the company generated its own measure of employee financial well-being: net disposable income, which calculates the percentage of income an individual has left after paying for necessities. For Chipotle and Prudential, assessments were also key first steps. But Andrada and Keh noted that assessing whether and how employees are using the financial security benefits and resources provided is also important.
Keh raised that Prudential disaggregated the findings from their employee assessments to determine differences in what their employees might be looking for – whether it’s better retirement plan options or financial counseling – depending on their socioeconomic status or racial or ethnic background among other factors. Andrada shared that Chipotle conducted a “listening tour” with its workforce, determining what they could provide to respond to their employees’ needs. Realizing the need to better communicate about existing pay and benefits, Chipotle produced a “What’s In Your Burrito” breakdown for its workers that demonstrates the makeup of their annual pay and benefits. The company also offers financial counseling on-demand for employees, she said, where they can use the “What’s In Your Burrito” mechanism as a starting point to assess their baseline financial health and set goals.
Ensure you’re living your values and purpose with action
Chipotle’s “What’s In Your Burrito” tactic is just one example of how the company’s work to invest in its employees’ financial well-being stems from its core values. Andrada shared that in 2018, after facing customer backlash and sales drops related to food safety incidents, Chipotle recommitted to its value of integrity – ensuring it informed everything from ingredients to how the company treats its employees. Ultimately, this approach also made it easier to sell financial security efforts to its C-suite, Andrada said.
“When we had big things like debt-free degrees as well as access to mental health benefits, when we wanted to introduce that, of course I would tell everybody ‘Make sure you have the business case.’ But, at the end of the day, if it’s aligned with the purpose of the company…it may get easy buy-in,” she said. With these values guiding its action, Chipotle saw growth in sales from 2018-2019, Andrada said, and pointed to the company’s current market cap of $52 billion as proof that these measures have tangible business results.
Being clear on core corporate values was also what made the results of PayPal’s worker financial wellness assessment particularly jarring to Paasche. PayPal’s mission was to democratize access to financial services and the company recognized that it needed to live up to this for its employees, not just its customers. As a result, PayPal’s seen record employee engagement scores, net-promoter scores with customers, and employee retention rates.
Keh linked Prudential’s decision to invest in employees’ financial security to the origins of the company, which was founded to provide burial insurance for low-income families. Today, though, the company leverages part of its core business in employer benefits to set goals and measure success with its worker financial wellness efforts. “What we are looking to do with this Initiative is not only advocate for the things that we’re doing with our own employees, but also think about how we encourage our employer clients to think about what financial wellness offerings or services that they could be providing,” she said.
Team up to tackle systemic challenges
In addition to noting the importance of working within each company’s walls, Keh expanded this idea to community and society as well. Prudential’s partnerships with nonprofits allow it to drive action outside of its own workforce through taking on systemic barriers to financial well-being that exist for working families across the country. By advocating for measures like universal paid family leave and making the child tax credit permanent, the company can extend its influence, she noted. “Philanthropy is not just on the side of things, but it’s right in-line with how we do our business because it’s trying to change some of the structural issues…to get to the point where it’s not just about our own employees and customers,” Keh said.
Keh also pointed to the fact that Prudential as a company is trying to close the financial divide and that this work cannot be divorced from efforts to close the racial wealth gap. Paasche seconded this, bringing PayPal’s commitment back to its mission of economic empowerment and increasing access to capital. To him, each company should be thinking about what specific structural issues they can tackle based on their core business and/or values and who they can work with to do so. Part of the benefit of participating in the Initiative, he said, is learning not just from the other companies involved but from nonprofit partners the Financial Health Network and Good Jobs Institute.
Andrada also emphasized that companies’ structural influence on financial well-being should not be separated from their diversity, equity, and inclusion (DEI) efforts. She specifically stressed the potential that lies in training and upskilling to promote individuals internally and, in turn, financially. Chipotle worked to prioritize this in its recruiting efforts, which has strengthened its own retention and helped open up opportunities to marginalized populations.
“We see that the labor pool, and who knew this would happen even after the pandemic, that there’s a finite group of workers out there in the world. And so how can we go from always churning people to actually being in the business of creating talent for the future?,” Andrada said. Companies like Chipotle, PayPal, and Prudential are proving that employers must be answering this question with worker financial wellness in mind.
Learn more about the Worker Financial Wellness Initiative and how your company can join leaders like Chipotle, PayPal, and Prudential here.
