If You Take Stakeholder Capitalism Seriously, You Need to Take Hazard Pay Seriously
For the past five months, retail workers have been showing up to do their jobs under incredibly stressful and challenging conditions. They’ve had to manage waves of panicked customers, serve as disinfectant crews and occasional mask-enforcers, and adapt to regularly changing sets of management’s guidelines, on top of the jobs they originally signed up for.
That frontline workers’ jobs have become at once more dangerous and more difficult during the pandemic is obvious. One of the most important actions we saw companies take in the early phase of the pandemic was to institute hazard pay policies. At least 38 of the 300 largest ones we track took this step.
Unfortunately, despite the fact the virus continues to spread, many of these policies are now expiring. In fact, as our new look back at these benefits shows, at least 14 of these policies have elapsed or been discontinued (including Amazon and Kroger), some of them over three months ago.
One problem with this is that it flies directly in the face of public opinion. Our polling, done in partnership with The Harris Poll, shows that 77% of respondents support some form of the policy for the duration of the virus. It’s also becoming more politically relevant. Sen. Kamala Harris co-authored an editorial calling on grocery chain CEOs to reinstate hazard pay benefits just a few days before being named Joe Biden’s VP pick.
There is some good news, however. We’ve identified several companies – Charter Communications, Target, Tractor Supply – who’ve not only provided hazard pay to their employees, but announced that wage increases would be permanent. And we’ve seen a couple of companies extend hazard pay policies with explicit end dates, including Dick’s Sporting Goods (through 2020) and Dollar Tree (Aug. 29).
Bottom line? Providing hazard pay is stakeholder capitalism in action. Companies serious about their commitments to the stakeholder model will take note.
– Martin Whittaker
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Join us next Wednesday, August 19 at 11:00 a.m. ET, for a LinkedIn Live session with JUST Board member, Dan Ariely, and his BEWorks cofounder, Kelly Peters. We’ll discuss How Behavioral Science Can Help Companies and Workers Cope in a Crisis. Learn the psychological and behavioral barriers your employees and customers are going through right now, and what policies can improve their well-being and productivity. Save the date here, and follow Martin on LinkedIn to be notified when we’re live.
This Week in Stakeholder Capitalism
Accenture releases an extremely thorough diversity and inclusion report on its workforce.
Amazon is in talks with the largest mall owner in the U.S. to turn abandoned Sears and JCPenney stores into fulfillment centers.
Nearly 80,000 airline workers face furloughs, with travel patterns decimated by coronavirus.
Caesars gives several executives a pay raise while thousands of workers are furloughed or laid off.
EA executives’ pay raises were blocked by investors, who said that the proposed equity awards were “exorbitant” after worker layoffs earlier in the year.
Microsoft announces a new goal of zero waste by 2030.
Tyson gets a new CEO and is hiring over 200 nurses after nearly 10,000 employees contracted COVID-19.
What’s Happening at JUST
Yesterday marked Black Women’s Equal Pay Day, a critical reminder for Why Pay Equity Is Still Critically Important in the Time of Coronavirus and an opportunity to consider What Companies Can Do to Combat Systemic Racism Against Black Colleagues. For additional reading, we also recommend analysis by McKinsey and LeanIn.org, and Economic Policy Institute.
Book Alert: Check out ”Honest to Greatness” by Peter Kozodoy, featuring a chapter on our work here at JUST Capital. Peter’s book shows that honesty in business isn’t just the moral thing to do, it’s also the profitable approach.
We take a deeper look at how fewer than half of retail companies have provided expanded paid sick leave to frontline workers, and how for most essential workers, hazard pay has already expired.
Must-Reads of the Week
Diligent Institute surveyed more than 400 directors, corporate leaders, and releases for Stakeholder Capitalism: Translating Corporate Purpose into Board Practice. Triple Pundit features how U.S. companies lag global counterparts in thinking a fundamental change in capitalism is underway.
The National Urban League releases its annual State of Black America report and 2020 Equality Index.
The New York Times features CEOs who are pledging to hire 100,000 low-income and minority workers in New York, including JPMorgan Chase’s Jaime Dimon and Amazon’s Jeff Bezos.
The Wall Street Journal showcases the negative economic impact of a lapse in the unemployment benefits being debated in Congress, CNN highlights how many full-time workers are returning only to part-time hours, and Business Insider reports that nearly one-third of people who were laid off and then returned to work have been laid off again.
Chart of the Week
This week we dive into our 2020 Rankings to evaluate median maximum drawdowns by quintile – the percentage peak-to-trough performance over a period of time. Splitting the Russell 1000 companies we rank into five quintiles, we see that top-ranked, Q1 companies had a median max drawdown of -42.9% relative to the -48.2% from the bottom-ranked Q5 companies.