Monday was a monumental day for JUST and our mission. Ringing the Nasdaq closing bell to celebrate the JUST 100 was a major milestone on the road to a more just economy and a chance to both thank all those who’ve helped us get this far and reflect on where we’re going.
After the bell, and with the help of Nasdaq, our event sponsors, and media partner CNBC, we hosted “The Strategic Imperative of the ‘S’ of ESG,” an in-depth discussion among company leaders on the human element of business. Some personal highlights:
I also noted the hunger for more open and honest talk about some of the challenges of ESG, how leaders have handled failure and made tough choices, how companies can act with greater authenticity and accountability, and how the stakeholder approach connects to the future of free market enterprise and democracy itself. You can watch the entire conversation here.
On the walls of Nasdaq’s amazing event space hang pictures of notable IPO and bell ringing moments from the past, from Amazon to United Airlines. The images capture companies in a singular moment of transition, for them and perhaps in some cases for the market itself. I like to think Monday marked a similar moment of transition for all those who see just business behavior as the future.
Be well,
Martin Whittaker
GM CEO Mary Barra says that remote work actually allowed the company to make faster progress on its electric vehicle fleet.
JPMorgan Chase CEO Jaimie Dimon releases his annual letter to shareholders, declaring that the American economy is still strong, but that the inflationary environment and Russia-Ukraine War will require bold leadership.
Starbucks returning CEO Howard Schulz scraps planned stock buybacks to invest more into their workers amidst growing unionization efforts.
Synchrony becomes the newest company to join our Worker Financial Wellness Initiative and make the financial health of their employees a C-suite priority. For information on how your company can participate, go here.
Our director of corporate equity, Ashley Marchand Orme, was quoted in this article on tracking the racial equity and diversity investment promises corporations made in 2020.
CNBC compared our Rankings of America’s Most JUST Companies with LinkedIn’s “Best Companies to Work For” to discuss how different methodologies produce wildly different outcomes in these lists, particularly around Amazon.
(Christopher Galluzzo)
“First and foremost, it is about putting food on the table. So, to them, are the wages competitive? But then how do you create a pathway to economic mobility and growth? And for us, it really is about level access to education. We introduced debt-free degrees back in 2019, where it is that pathway for our employees to really thrive, but then pursue their passion whether it’s here as a leader or in the world as a leader.”
“It’s about taking leadership now and presenting guidelines that might help investors and others in the community understand what you’re doing. Prior to our rule, about 25% of the S&P 500 disclosed their board diversity, now over 60% have disclosed – and that’s in a year.”
“I don’t think ESG will ever be 100% of the decision-making of buy and sell. It just won’t. But five years ago, was it 5%? Today, is it 15-20%? Will it be 35-40%? Yes. Will that be an indicator of better culture, better long-term growth, more innovation? Yes.”
The United Nations’ IPCC released its latest report on the state of global climate change and progress toward mitigating it. It’s a giant report, but the Panel provides key findings and a breakdown by sector, and if you want just the most top level data, Bloomberg Green has a handy briefing. One takeaway: “Left unchanged, the world’s current emissions trend could result in warming of more than twice the target limit set forth in the 2015 Paris Agreement.”
The Wall Street Journal released an analysis of CEO pay, finding that it is on track to hit a new historic high, with the ratio of CEO pay to median worker pay up from the year before the pandemic, despite the tight labor market and inflationary environment.
The New York Times reported on what went on behind one of the bigger news stories of the week, Tesla CEO and notorious tweeter Elon Musk buying a controlling share of Twitter and joining its board – a move that could set the tech platform on a new course.
Fortune reports on new research that shows managers with business degrees are more likely to disproportionately distribute profit gains among leadership, instead of equitably across the workforce.
Note: If you’re looking for the 2023 version of this list, click here.
This year, Women’s History Month also coincides with another milestone: the two-year mark of the COVID-19 pandemic. Over that time, the impact of the pandemic on women’s labor participation and career trajectories has been stark. Women have yet to recoup pre-pandemic employment rates, and are seeing declines in workforce participation as of late, while men inch closer to pre-COVID numbers.
Mothers who have worked throughout the pandemic have also experienced stalled growth and lower pay among other negative career impacts. A recent survey from CNBC and Momentive found 29% percent of women with children under 18 say their career has taken a setback in the last 12 months, compared to 18% of their peers with older or no children. The strain working mothers have come under during the pandemic has also prompted the U.S. Equal Opportunity Employment Commission to issue new guidance warning that discrimination against caregivers in the workplace may be unlawful.
The challenges working parents face are exacerbated by the ending of pandemic-era policies like the child tax credit and the lack of a national paid parental leave policy in the U.S. In the absence of federal policy, it is incumbent on corporate America to support working families and a more resilient workforce. Parental leave policies that are gender neutral and allow for an equal amount of paid time off for both caregivers are considered expert-recommended best practice. In addition to helping shift cultural norms to encourage working fathers to take paid leave, such policies can help support child development, women’s participation in the workforce, and family financial well-being, and serve the needs of LGBTQ parents.
Yet, the majority of the largest public U.S. companies don’t disclose that they have a paid parental leave policy. We took a look at disclosures among the 954 companies we analyzed for our 2022 Rankings and found 53% do not disclose and 47% do disclose a paid parental leave policy. In addition, 8% disclose a paid parental leave policy of at least 12 weeks for both primary and secondary caregivers.
Among those that do disclose, only five – HPE, Etsy, Dropbox, Netflix, and Lululemon Athletica – offer six months or more of paid leave for both primary and secondary caregivers. Read on below to explore additional details on their disclosures.
Ranked 2nd in its industry and 75th overall
Computer Services company based in Houston, Texas
A leader in its industry, HPE supports its working parents through its HPE Work That Fits Your Life policy. The policy includes 24 weeks of paid parental leave for both primary and secondary caregivers. The company also offers its employees the option to work part-time for 36 months after the birth or adoption of a child and has launched a return-to-work program to help parents and others who have been out of the workforce for at least one year.
Ranked 7th in its industry and 102nd overall
Retail company based in Brooklyn, New York
A consistent leader on gender equity, Etsy’s paid parental leave policy covers 26 weeks for both primary and secondary caregivers. Etsy’s policy gives employees the flexibility of taking this leave over a two-year period. The company also offers financial assistance with costs associated with adoption or surrogacy.
Ranked 15th in its industry and 246th overall
Software company based in San Francisco, California
Dropbox provides 24 weeks of paid parental leave for its global workforce, an industry-leading policy that applies to all parents whether they are birthing, non-birthing, or adoptive. The policy also offers employees the flexibility to return from leave on a part-time schedule to ease the transition back to work.
Ranked 4th in its industry and 142nd overall
Media company based on Los Gatos, California
Netflix offers the highest amount of paid parental leave of all Russell 1000 companies JUST ranks, at 52 weeks for both primary and secondary caregivers. The company also supports the family journeys of its workforce through its global family forming benefit, which provides fertility, surrogacy, and adoption assistance for employees and their partners regardless of marital status, sexual orientation, or gender.
15th in its industry and 543rd overall
Household goods and apparel company based in Seattle, Washington
Lululemon’s policy covers up to six months of paid parental leave for all levels of its workforce, with total paid time off determined by each employee’s tenure with the company. The policy is also gender neutral, and applies to maternity, paternity, and adoption leave.
Ian Sanders is a JUST Capital Research Intern, focusing on workers and wages.
For last year’s Women’s History Month, we worked with The News with Shephard Smith to shine a light on the challenges of the “she-cession” and spotlight companies that were leading on issues that would help create a more equitable recovery on the other side of the pandemic.
Since then, more women have rejoined the workforce, but recent analysis by the National Women’s Law Center shows that while men have completely recouped pandemic employment losses, there are still 1.1 million fewer women participating in the labor force than in February 2020. Most recently: only 39,000 women over 20 joined the workforce in January 2022, compared to 1 million men, and while the economy gained 467,000 jobs, just 40% of those went to women.
In a recent survey conducted with SSRS we asked Americans what they think are key challenges relating to women’s experiences in the workplace and 76% of Americans identified access to childcare, while 70% noted equal pay, and 62% noted access to paid family leave as key challenges for women in the workplace. Clearly more is needed from corporate America to help women to thrive in the workforce. Last year’s analysis looked at how America’s largest companies were performing across five key performance indicators that support women in the workplace – including board gender diversity, pay equity, dependent care, parental leave, and paid time off. Just five companies hit those five thresholds: Bank of America, Etsy, General Mills, HPE, and Starbucks.
In 2022, that list grew to eight companies, including Bank of America, Edwards Lifesciences, Etsy, Goldman Sachs, Merck & Co, SVB Financial Group, Synchrony Financial, and The Estee Lauder Companies. Because of more stringent performance criteria this year, three companies – General Mills, HPE, and Starbucks – that appeared in our 2021 analysis dropped out of the 2022 list of top performers.
In order to learn which companies stood out from this group, we refined our metrics further, looking at whether companies:
Based on these expanded criteria, three companies stand out as leading the way – Merck & Co, Synchrony Financial, and Etsy. Read on to explore additional details and links to their disclosures:
Ranked 1st in its industry and 26th overall
Pharmaceuticals & Biotech company based in Kenilworth, NJ
As part of its extensive benefits package, Merck recently implemented a 12-week minimum global paid parental time off program for employees. Furthermore, the company has displayed its commitment to advancing the careers of women in its workforce by conducting regular internal reviews to ensure pay equity, as well as by promoting a “Women in Leadership” program to push for greater female representation in Senior Leadership positions.
Ranked 5th in its industry and 54th overall
Commercial Support Services Company based in Stamford, CT
Synchrony Financial stands out within its industry when it comes to supporting its employees’ families. In addition to offering 12 weeks of paid parental leave, Synchrony has created an after school program for children of employees to receive tutoring, extracurricular activities, and wellness support.
Ranked 7th in its industry and 102nd overall
Retail company based in Brooklyn, NY
As a leading company that has stood out on these issues year after year, Etsy goes above and beyond in supporting its employees by offering 26 weeks of fully paid gender neutral parental leave alongside globally available childcare services. Additionally, Etsy continues to lead in Board Gender Diversity, with 50% of its board comprised of women.
(David McNew/Getty Images)
On the face of it, the SEC’s proposed rule requiring companies to disclose emissions and other climate information, announced Monday, gives the market exactly what it’s been asking for.
It helps to address concerns over greenwashing and the haphazard nature of ESG data. It brings greater consistency, validity, and meaning to climate risk disclosures, so the free market can make more informed choices over capital allocation.
It tracks what many companies are already doing. JUST’s analysis shows a majority of companies (57%) currently disclose Scope 1 and Scope 2 emissions (up from 42% in 2021); 30% report Scope 3 emissions from travel; 10% report Scope 3 emissions from use of their products (mostly utilities); and over 100 companies from our universe have set net zero targets of one kind or another.
It gives big asset managers – BlackRock, State Street, and Vanguard – and pension funds what they say they want.
Finally, it accords with our recent polling, in which 87% of Americans, including 74% of Republicans, agree that public companies should disclose their risks from climate change; and 90% say it is important that there is a common, standardized reporting structure for companies.
That said, the rule will undoubtedly encounter some resistance. It comes at a time when world events are fundamentally destabilizing the U.S. economy and pushing the historical balance of energy reliability, affordability, and cleanliness to its limit. Pressure to increase domestic fossil fuel production is intensifying. In a meeting with President Biden on Monday JPMorgan Chase CEO Jamie Dimon called for a “Marshall Plan” for domestic natural gas.
The politicization of ESG and climate is also a factor. Speaking on CNBC’s Squawk Box Thursday morning, Republican Sen. Dan Sullivan of Alaska – a proponent of more domestic oil and gas investment – implied that legislation to curtail the power of big asset managers to vote their shares on ESG issues may be in development.
Tackling climate change and transitioning to a clean energy economy has the support of a majority of Americans but it will be a long and contentious process.
Be well,
Martin
AEP completes its largest wind farm and sets the course to rapidly increase renewables in an effort to hit net zero goals.
Delta is giving all of its workers a 4% pay raise, their first since the start of the pandemic.
Disney held a town hall dedicated to LGBTQ+ issues, with some workers staging a walkout to demand more action – including ceasing political donations to several Florida lawmakers.
MetLife announces $2.5 billion in DEI commitments, including spending with diverse suppliers and advancing diverse-owned firms.
Starbucks and Volvo partner to bring EV-charging stations to 15 Starbucks locations as part of a pilot program to help scale charging infrastructure.
Target tests its first net zero prototype store in California, which is planned to deliver a 10% energy surplus each year.
BONUS CLIP: Our interview with Cyrus Taraporevala of State Street is now available on our website to watch in its entirety, but the conversation continued for several minutes afterward. In this newsletter-only clip, Cyrus discusses the increasingly problematic fact that public companies have to play by a different set of environmental disclosure rules than private ones. Watch the clip here.
Join JUST Capital as we run in the NYC Marathon and raise money for a more JUST economy. Info here!
Join us in shaping the new standards for corporate action on racial and economic equity! Please join JUST and our colleagues at PolicyLink and FSG to provide feedback on new corporate performance standards we have been developing together for racial and economic equity. By sharing your insights, you can help ensure that what we develop is comprehensive, actionable, and has the power to set new norms for equity in the private sector. We’ll hope you’ll join us and share your feedback!
(Andrew Toth/Getty Images)
“We wanted to amplify a conversation about this crucial issue facing parents and caregivers within the private sector and shed light on why paid family leave is imperative to get millions of women back into the workforce. Men have already recouped pandemic employment losses, while 1.1 million fewer women are participating in the labor force than the previous year. At this rate, we are looking at a timeline that reverses decades of progress for women’s participation in the workforce.”
“Excited to announce that I’m going to lead the building of a new business at ExxonMobil focused on the (very) large scale decarbonization of the industrial economy. We’ll be significantly moving the needle toward net zero in the most hard-to-decarbonize industries, in an economically viable way, and with urgency.”
“The Russian war is going to prompt companies and governments worldwide to re-evaluate their dependencies and re-analyze their manufacturing and assembly footprints – something that Covid had already spurred many to start doing.”
The Hill features a new Oxfam study showing that nearly one-third of U.S. workers make less than $15 an hour. The demographic inequities are stark: 40% of women earn less than $15, compared to 25% of men, while 46% of Hispanic/Latinx and 47% of Black workers earn less than $15, compared to 26% of white workers.
The Wall Street Journal highlights data from the Atlanta Federal Reserve showing that women are starting to regain lost ground when it comes to wage increases, versus one year ago.
Bloomberg reports which S&P 100 companies are disclosing EEO-1 forms, the “gold standard” of workforce race data and reveals what companies are making progress – and falling behind – when it comes to increasing diversity among their ranks.
NPR shows that Black business ownership is actually 30% higher now than pre-pandemic.
This chart comes from our latest analysis on the state of corporate GHG emissions disclosure in light of the new SEC proposal and shows that currently nearly 43% of America’s largest companies are not disclosing Scope 1 and 2 emissions, and far less have tackled reporting on Scope 3 emissions. Learn more here.
Annette Nazareth
Senior Counsel, Davis Polk & Wardwell
JUST Capital Board Member
Annette Nazareth is an experienced financial markets regulator, former SEC Commissioner, and recognized authority on financial markets regulatory issues. Annette has been a key player in financial services regulatory reform for much of her career, and worked in various posts at the SEC for a decade, serving as a Commissioner from 2005-2008.
Currently, Annette serves as the Co-Chair of the Board for the The Integrity Council for the Voluntary Carbon Market, an independent governance body for the voluntary carbon market. “To secure a liveable future, we urgently need to ensure that every tool available to us is working as effectively as possible to reduce and remove greenhouse gas emissions,” she said, speaking on the Council’s planned global standards for carbon credit quality. “The voluntary carbon market has a critical role to play in accelerating a just transition to 1.5 degrees centigrade, but it can only succeed if it is rooted in high integrity.”
Year over year, JUST Capital’s polling of the public shows that Americans are looking to companies to put their workers first. And, today, the country’s labor market is seeing the effects of their frustration at how employers have responded to this. The Great Resignation is wearing on, with workers quitting at rates that continue to break records. At the same time, companies are staring down proxy season with shareholders setting out voting priorities that put extra emphasis on the “S” in ESG.
It’s not just the public and investors that are looking for greater transparency from companies on how they treat their workers. The SEC has noted that standardizing disclosure of human capital metrics – workforce-related data, policies, and practices – is a key area of focus alongside other ESG topics. Chair Gary Gensler recently confirmed that the SEC is working out the details of mandatory disclosure standards on climate, and human capital standards are expected to follow in the coming months. JUST analysis has shown that the current state of human capital disclosure among the 100 largest U.S. employers is minimal – not a single metric we’ve tracked is reported by a majority of companies.
As investors push for more data and the SEC considers imposing new requirements, the bulk of companies will have their work cut out for them to accelerate reporting.
A new survey from JUST Capital, conducted in partnership with SRSS, Ceres, and Public Citizen, also found that the American public overwhelmingly supports greater disclosure from companies and federal standards. Of Americans polled, an average of 87% support the federal government requiring corporate disclosure on human capital and environmental impact data. JUST Chief Strategy Officer Alison Omens discussed the broad support for these standards across demographics on CNBC’s Squawk Box.
At JUST Capital, we’ve been tracking both if and how Russell 1000 companies have been reporting human capital performance metrics, releasing a report on the state of disclosure in October 2021. Our analysis sought to help define what “S” actions are for companies and, in turn, what disclosure should include. It also highlighted the challenges that, in the absence of standards, the current methods of disclosure present for shareholders and others interested in this data.
Companies often use different terminology to represent identical human capital metrics, report on aggregated or disaggregated versions of metrics, and place disclosure on these issues in different sources. To provide a clearer picture of how this affects investors and other stakeholders interested in human capital, we analyzed the data collection time behind our report and what it means for the wider debate on disclosure standards.
Between July and August 2021, JUST analyzed the 100 largest U.S. employers on how they disclose 28 metrics across six key human capital themes: Employment and Labor Type; Job Stability; Wages, Compensation, and Benefits; Workforce Diversity, Equity, and Inclusion; Occupational Health and Safety; and Training and Education. From this analysis, we discovered that:
JUST collected all data for this analysis manually. In other words, our team read through various publicly available company sources and recorded the information exactly as it was disclosed by companies, noting details about the link, source type, date, calculation methods, and other important metadata to better understand the context of disclosure.
Each year, JUST Capital spends over 5,250 hours collecting over 200 data points for our annual Rankings of America’s Most JUST Companies. It takes a team of between 20 and 30 analysts and interns, wading through different public corporate reports and disclosures, to find data for the over 950 companies we rank from the Russell 1000 index.
By comparison, we found that it took a team of two over 130 hours to collect data for 100 companies on the 28 human capital metrics featured in JUST Capital’s report. The figure below breaks down this time by theme. Likely due to the number of metrics included in the Employment and Labor Type; Job Stability; and Wages, Compensation, and Benefits themes, they took the most time to collect at 36, 30, and 35 hours, respectively. It’s important to note nonetheless that these numbers show how challenging it is to find and aggregate data on ESG metrics overall.
To get a better sense of how long it takes to collect this data while accounting for the difference in the number of metrics within each theme, we looked at the average minutes of collection time per metric per company. Interestingly, while metrics in the Job Stability theme took some of the longest total time to collect, the time we spent per metric per company is in fact the lowest at just above a minute and a half. In contrast, the theme with the shortest overall collection time – Occupational Health and Safety – yielded the longest collection time per metric per company at almost five minutes on average despite the fact it only included one metric for collection.
At first glance, the average time to collect any one metric for a single company may appear relatively small and the difference in time across themes insignificant. However, the cumulative effect of collection time variability becomes noticeable when collecting data for 100 companies – and even more so if we were to expand data collection to the full Russell 1000.
To answer this question, we looked at the two themes with the highest overall data collection time: Employment and Labor Type (36 hours); and Wages, Compensation, and Benefits (35 hours). Analyzing the collection time per source type for these themes revealed an interesting finding: annual reports and 10-K Filings are the most time-consuming source type. In instances where companies disclosed data on these themes, our analysts spent 64% and 81% of their time, respectively, locating it through Annual Reports and 10-K Filings.
While Annual Reports and 10-K Filings tend to number at over 100 pages (including technical language, tables, and footnotes), the absence of standardization remains a key factor in making finding human capital data in this source time consuming for investors, researchers, and other stakeholders.
It is important to note that the longer length of the time spent on 10-K Filings may have been unintentionally affected by our data collection approach as well. We knew from previous experience with data collection that human capital data was rarely found in the 10-K, meaning that Annual Reports and 10-K Filings were not always the first source that we referenced. Instead, we typically looked at CSR and similar reports first because, from our previous data collection experience, companies are more likely to disclose human capital metrics there.
Due to the nature of manual data collection it is also possible that some data gets overlooked, especially when it is concealed in company sources that may not be easily accessible. To reduce the risk of omission, JUST Capital carries out a thorough review of companies’ publicly available materials and employs different search methods to ensure that information is in fact not available. Such a meticulous approach, however, is time consuming. This was certainly the case with human capital metric data collection, as JUST Capital’s research found exceptionally low disclosure across the board. In fact, the majority of the time that our analysts spent searching through company resources resulted in finding no disclosure.
For instance, we spent approximately 53% of data collection time (19 hours) looking for data on the Employment and Labor Type metrics without finding any disclosure. Similarly, we spent over 83% of data collection time (29 hours) going through company sources without finding a single disclosure on any metric under the Wages, Compensation, and Benefits theme. While finding human capital data is a long process, not finding it, and ensuring that it is in fact not public, takes significantly longer.
The length of time that human capital data collection requires serves as a proxy to how complicated it is to find this information. Disclosing data is only the first step toward increased understanding of how companies are performing on various human capital metrics – and, on its own, it’s not enough. The next step is adopting standardized disclosure practices that ensure the data is easily accessible and unambiguous.
This is the crux of the current debates on human capital and broader ESG disclosure. The exploration of data accessibility, comparability, and, finally, performance are the key questions policymakers, investors, and others are asking. While these questions shape standards, in the meantime, corporate leaders will need to take the first step of disclosure.
Much ink has been spilled on the Great Resignation and what it all means. People are leaving their jobs at record levels, and with the degree of job openings and wage growth, there’s far less risk in doing so than there used to be. Both business and finance leaders are taking note. Businesses are reassessing their jobs strategies, and investors asking about those strategies, and expecting far more thoughtful and detailed answers than in years prior. This growth has coincided with a rapidly intensifying interest in the “S” of the ESG, with people across the market working to define and benchmark what it means to invest in the social aspect of a business, from jobs to supplier issues.
Yet there hasn’t been much focus on how to approach this moment from an individual perspective, either as a worker or as a manager. In speaking to a friend recently who’s struggling with her own job, and wondering if she should leave, I shared the emerging consensus around the framework of a good job to help her measure her own satisfaction. As a manager myself who’s had employees leave, I’ve used this grouping to assess what I’m doing well and where I need to improve.
In an environment where we’re all worried about turnover, this framework is useful to start breaking down where an organization may be coming up short. So what are the dimensions? It’s usually four or five elements, including:
If we imagine this framework as a pyramid, financial security is at the bottom. Without financial security, every other dimension of a good job goes away. This is both intuitive and oddly an area of under examination. To put it plainly, imagine someone loves their job but their wages and compensation don’t cover their rent, food, childcare, and transportation. If they find a job that pays $1 more an hour across town, they have no choice but to take it.
And this isn’t a small number of people. According to our past research, half of employees working at the thousand largest publicly-traded companies in the US aren’t making a living wage. And according to a recent survey, more than half of Americans can’t afford a $1,000 emergency. I will say it again and again: Every employer should be assessing their compensation package and their approach to providing hours and work schedules to understand if their workers are making ends meet every month. If they’re not, employers will have issues with productivity, retention, absenteeism, and more.
Safety is another area that has reemerged in recent years as a critical focus. A hundred years ago we were talking about basic safety – protection against fire, the air we breathe in the workplace, and more. Today we’re still focused on those things, the pandemic reminded us why they’re so important, but we’re also focused on psychological safety. Are you able to speak up? Can you offer ideas? Will you be heard? According to a recent poll, the top reason people planned to quit was because they want better working conditions.
Fair treatment is fundamental. People must feel like they’re treated fairly and appreciated with regard to their race, ethnicity, gender, age, and disability, and where they sit in the organization. Is there an acknowledgement of the value and insights that workers at every level bring to the organization? Is there a commitment and constant evaluation of equity within the organization, including tracking and releasing demographic numbers, ensuring senior leadership represents the demographic makeup of the organization, and with clear mechanisms in place for reporting and assessing non-equitable environments. Is everyone respected and able to speak up the way that senior leadership is?
Opportunity and growth is why people stay. They need to have access to training, and to see their growth path at the organization. If that path isn’t there – and only 39% of U.S. workers in a recent poll say they receive the training and development they want – people eventually have to seek that growth elsewhere. And again, growth isn’t limited to white collar workers, but includes wage growth through better jobs, too.
Purpose is a term that’s thrown around a lot, and I historically have found it overemphasized when the first four elements aren’t satisfied. But it’s important for a couple of reasons. One of the things that JUST Capital hears from polling is that companies need to take action on the issues that align with their values. Do employees know what those values are? Do they feel like they’re connected to what the company is aspiring to do in the world? This is the underlying question – do people see their work as contributing to the broader mission of the organization and their own personal mission?
As Arvind Krishna, CEO at IBM, said on CNBC recently, “At the end of the day, you have to be competitive on wages, you have to be competitive on benefits, you have to give people a career path they enjoy – and they have to believe in the company, that the work they’re doing is serious and benefits society.”
Gallup is out with a new poll that shows U.S. employee engagement is at its lowest in a decade, with just 34% of workers saying they’re engaged in their work and workplace. Disengaged workers cost the economy between $450 and $550 billion per year, in addition to the cost for individual businesses. The cost of turnover is estimated around one third of each workers’ earnings. And companies who prioritize their workforces outperform their peers in the market.
As investors, workers, and managers make more concrete asks around “S” strategies, this framework is one way for employers to better advance and align business strategy with this growing focus. Unless companies address these elements, and then adopt them as a business strategy, they will see worse business outcomes including decreased productivity and lower retention. And, most importantly, an investment in workers unlocks the value that an engaged, experienced workforce provides.
To learn more about how your company can implement this framework, reach out to our corporate engagement team. For more on how to assess workers’ financial security, explore resources from The Worker Financial Wellness Initiative and get in touch on how your company can join leaders like Chipotle, Prudential, Verizon, and more.
