With confidence in the economy still feeling elusive for many people and layoffs dominating the headlines – particularly in the tech and banking sectors – it was a nice surprise to see prominent workforce investments by multiple large employers this week.
After raising starting wages for store employees in 2023, Walmart announced that store managers will see annual base pay and bonuses increases this year. Walmart’s leaders specifically note how vital frontline managers are when it comes to winning over their store employees and customers alike.
Chipotle also announced this week that it is seeking to recruit 19,000 new employees in the spring – a target up about 27% from a year ago. The effort will launch alongside multiple benefits incentivizing financial health and savings for employees – including a match of up to 4% of a worker’s salary through contributions to a worker 401(k) if they make student loan payments. It also dovetails with the company’s focus on prioritizing employee advancement from within – over 90% of restaurant managers at Chipotle were promoted internally, per 2023 data – and helping workers go from hourly to salaried jobs.
Regular followers of JUST will know such moves are very much in keeping with the goals of our Worker Financial Wellness Initiative (of which Chipotle is a founding member) not to mention American public opinion on just business behavior. At a time of increasing pushback on ESG and so-called “woke” business practices, investing in American workers is surely something we can all agree on.
Be well,
Martin
“I’m a full-throated, red-blooded, patriotic, unwoke, capitalist CEO … I’m not woke anything.”
Fortune reports on an MIT study that finds that AI is too expensive to replace most human jobs, at least right now. Meanwhile, employees are increasingly looking to their employers to help in AI upskilling.
Nasdaq reports that Walmart will raise the annual average salary and bonus for its U.S. store managers beginning Feb.1, with the average salary for store managers increasing from $117,000 to $128,000 a year.
Layoffs continue. This week, Macy’s announced they would be eliminating 2300 jobs, Ebay announced they were slashing nearly 9% of their workforce, Microsoft cuts 1,900 jobs in their gaming division only a few weeks after their historic merger with Activision-Blizzard. Media outlet Business Insider is cutting 8% of its newsroom, and the Los Angeles Times is laying off 115 reporters.
Safety issues remain in the news as well. Johnson & Johnson will pay $700 million to settle its talcum-based baby powder investigation, and problems escalate for Boeing as more incidents of faulty aircrafts continue to be reported.
Fortune takes a deep look at the country’s seemingly intractable inflation, revealing that nearly half of price increases over the past year were a result of excess profits–driving 53% of inflation during the second and third quarters of 2023.
The New York Times examines the contrasting approaches companies are taking to the challenges against corporate DEI programs – from reportedly eliminating, hiding, or conversely, doubling down on them.
The US Sustainable Investment Forum explores the impact of the anti-ESG legislation that was drummed up in 2023, finding that much of it was “all talk, no walk.” More inside.
This chart from The Harris Poll and Axios shows that, in the wake of DEI pushback, the level of divisiveness certain terms holds across Republicans and Democrats, and between generations. The point? Companies need to define what DEI is to them, as well as the messaging they have around them, before others do it for them. Learn more here.
Amid the fiery debate around “woke capitalism” and pressure from 13 Republican Attorneys General to Fortune 500 companies following the Supreme Court’s decision on race-based college admissions, some experts worried that CEOs would back down from diversity, equity, and inclusion commitments around things like pay equity.
But in actuality, the opposite is true – at least that’s according to Maria Colacurcio, CEO of Syndio, a software tech company that helps Fortune 500 companies and others advance policies promoting pay equity and career equity, or policies that promote fair pay and fair promotion, respectively. Prior to joining Syndio, Colacurcio co-founded Smartsheet, a workplace management platform, and held leadership roles at Starbucks and Microsoft.
According to Colacurcio – who works with clients like Salesforce, Walmart, American Airlines, and General Mills – many C-suite leaders are pursuing pay equity and fair promotion policies more aggressively than before. In fact, some are “ignoring” the letters from Republican Attorney Generals altogether, she noted.
Business leaders aren’t backing down from the issue of pay equity because it continues to be an issue of interest for employees, which plays into the war for talent, and because of new state-level pay transparency laws, which are forcing companies to disclose salary ranges, she said. In addition, she noted, there’s mounting regulatory pressure – amid growing interest from the the Equal Employment Opportunity Commission (EEOC), whose chair recently declared pay equity a top focus, and the European Union, which passed a directive requiring pay transparency.
In a recent Q+A with JUST Capital, the Syndio CEO discussed the financial case for pay equity, what she learned from serving as a director at Starbucks during the company’s pay equity analysis, how to begin conducting an internal pay equity audit, artificial intelligence, and more.
Editor’s note: The following has been lightly edited for length and clarity.
There’s growing political debate around issues like pay equity. Have you seen a scaling back of CEOs on these issues?
We work with primarily Fortune 2000 companies, and we’re actually seeing quite the opposite. So in the wake of salary transparency laws, and a competitive talent market, which continues even amidst all the news of layoffs, we’re seeing a lot of companies doubling down on this work, including bellwethers across tech like Microsoft, Walmart in retail, Moderna in healthcare, and so on.
I think part of that is because folks realize there’s no going back to the old way. This generation of employees expects companies to pay equitably.
So what I’m hearing is that companies are not scaling back.
Absolutely. I think a lot of folks started immediately presuming that the Supreme Court’s recent ruling would cause a big rollback in diversity practices. And I think what it’s doing is more so bringing to light, what is the right way to measure this? What is the right way to think about analytics and measurement to ensure that we’re tracking in the right way toward our goals? I think that’s the really important part of this conversation that we need to continue to focus on.
Walk me through the bottom-line case for advancing pay equity.
This is about not only attracting the right type of talent, the type of talent that’s going to drive business performance, but also retaining that talent, because retaining your way to some kind of aspirational goal is much more efficient and cost effective than hiring your way to that goal. Gartner research found that 58% of workers would consider switching jobs for more transparency. For Gen Z employees, that number jumps to 70%.
Studies have shown that businesses with more diverse teams and leadership have better financial performance. According to McKinsey & Company, companies in the top quartile for gender diversity were 25% more likely to have above-average profitability than those in the bottom quartile. Additionally, companies with more racial and ethnic diversity were 36% more likely to have above-average profitability.
You served as a director at Starbucks, where you played a role in the company becoming one of the first Fortune 50 companies to go public with its pay equity results. What did you learn from that? I imagine that it’s scary for a company to do that for the first time.
It is scary. And kudos to Starbucks for being so progressive and being first to really take transparency and want to take it to that level, because no one was really doing that at the time. And, you know, they continue to be just an absolute powerhouse in what they’re doing.
That experience – in addition to co-founding Smartsheet [a software as a service offering for collaboration and work management] – was the impetus for Syndio, for figuring out how to solve these issues through technology.
Rob Porcarelli was the VP Assistant General Counsel at Starbucks – he now works as Syndio’s Chief Legal Officer. Through him, I learned how pay equity initiatives worked. They’re usually done through an outside consulting firm or law firm – it’s just very cumbersome, it’s archaic. It’s a long process. And more importantly, the recipient of the information doesn’t learn much, they just get a big stack of paper back, which tells them who to pay and how much, but they don’t learn anything about the root cause of the policies and behaviors that are driving those disparities. So we started talking. It was really this idea of like, how do we fix starting pay?
Why are you passionate about pay equity and career equity on a personal level?
So when I left Smartsheet, I had taken a couple years off to stay at home with my young kids, and I went through a divorce as I was transitioning back into the workforce. The motherhood penalty was a very real thing for me, even with the experience I’d had having worked at Microsoft and having been in tech for a long time. My experience with the motherhood penalty was very much a gut punch.
So I think that, combined with what Rob taught me in the process of going through that effort for Starbucks, is what opened my eyes to the fact that there’s so many different facets to this problem. It’s not just the fact that companies don’t have their fingertips on this data and analysis, it’s that they can’t do analysis quickly and efficiently. It’s about perception. How are folks perceived when they move into that role of motherhood? How does that show up in pay? How do we begin to combat that?
If I was a company contemplating taking on a pay equity or an opportunity analysis, can you walk me through some of the steps involved? Who should I talk to?
So I think the folks to get in the room are your HR team, your CHRO, your head of compensation or whoever’s handling that, and then I think the legal perspective is another really great perspective to have in the room, so your chief legal officer.
Now I’m the CEO of Syndio, so I’m gonna highly recommend our platform – we have clients who are best in class in their industries. I’m also going to recommend some free resources we have like our guide titled “The New Way to Fair Pay,” and our helpful communications playbook.
Then start the conversation: How can we make pay and opportunity equity a strategic business priority?
The best time to address pay equity is now. For every minute you wait, it actually compounds on itself and gets worse. There’s remediation that you’re going to have to pay if you’re living in a place where you have disparities because of gender, race, ethnicity – not to mention the potential brand catastrophic risk, if that comes out, in addition to lawyers, fees, settlement costs, other things like that, if you are entangled in some sort of litigation.
On the opportunity equity side, or ensuring all employees have the same shot at promotion, I think the real selling point here is that without precise metrics, a broad-based DEI effort can spend a lot of time and money trying to fix the wrong thing. There’s tech out there to help companies tackle DEI efficiently, in a really modern and specific way, using analytics to drive the measurement. It will show you where progress has been made and where there’s still opportunities for progress.
Artificial intelligence has generated a lot of interest in how it will impact the way people work. What impact do you see AI having on the work you do?
While AI isn’t new, the sophistication of AI is growing, and that will inevitably have an impact on how HR understands and interacts with information, including workplace equity. Natural language capabilities will empower companies to democratize insights and infuse fairness into decision-making at a larger scale. AI’s speed and efficiency can streamline data preparation for analysis, facilitating faster and more frequent assessments. With caution and understanding around the use of inputs, AI’s predictive capabilities can drive companies from reactive to proactive equity management.
However, these potent tools are built upon existing language and data and can therefore amplify biases ingrained in the status quo. To address this, we must focus on developing generative AI, large language models, and natural language processing tools that actively counteract biases in pay and opportunity-related decisions.
Members of JUST Capital’s Corporate Impact Initiatives engage with Syndio, among other impact partners, to help them navigate workforce investments and deliver on their equity commitments.
Are you happy? It may seem like an odd question in times like these. But according to Mo Gawdat, former Chief Business Officer at Google X, and renowned happiness expert, it’s a question more and more employers should be asking of their people.
Gawdat’s journey from successful tech executive to AI authority and happiness specialist – motivated by the tragic death of his son Ali – is a fascinating one I’d urge you to check out. He writes prolifically about the science of happiness but also about the practical ways companies and organizations can go from employee satisfaction to employee engagement to employee happiness, and foster “happier, healthier, more ethical, and more innovative workplaces.”
There’s also a strong AI component at work, with Gawdat both signaling the social dangers of unregulated AI, but also seeing AI as a way to advance individual happiness.
A close cousin of happiness – optimism – is getting a lot of attention this week. “The Techno-Optimist Manifesto,” published by Silicon Valley venture capitalist Marc Andreessen, lays out a vision (presumably shared by many tech elites) for a free-market, technology-led path to a better world. For anyone pondering the future of democratic capitalism, and regardless of your ideological persuasions, it’s well worth a read.
One thing to note is that I think he either fundamentally misunderstands or misrepresents ESG and sustainability as being part of “a mass demoralization campaign” that is “anti-technology and anti-life.” That’s certainly not been my experience, nor what I witnessed at the FT Moral Money conference on ESG in New York this week, where business leadership on major societal problems was on full display.
Be well,
Martin
Team JUST Capital is once again running the New York City Marathon! We have five supporters running the marathon on our behalf with the goal of raising $25,000 between them. One of those supporters is Dan Day. You can learn more about why he’s running and donate to his page here. We appreciate your support!
JUST Capital publishes our latest review of quarterly stakeholder performance. In Q3 2023, four of the five stakeholders we track delivered positive performance, and the Workers stakeholder delivered the strongest performance with a long-short spread of 7.24%. Over the longer term – from January 2018 to September 2023 – leading companies outperformed their lower-ranked peers by 56.5% as measured by JUST Overall Score.
JUST Capital Chief Information Officer Robert Marsh pens a thought-provoking post about Just AI, our latest initiative to help companies implement AI in ways that reflect Americans’ values around fairness, privacy, inclusivity, and shared prosperity.
“The idea of a clean energy transition is woefully insufficient. We have a global emergency …. The deck is stacked against a successful outcome of COP28 … We need to remove the political obstacles and opposition being put in place by the fossil fuel companies.”
“Competition today and successful performance today requires business to perform well across a range of environmental, social, and governance related issues. These issues are material to business performance, they are related to what workforces, customers, and shareholders think about value and value creation. If the market doesn’t believe that you’re a leader on DEI or climate, or whatever issue is most important to them, you’re not going to get the benefit of that. It’s a combination of action and communication. You do need both and one can’t outstrip the other.”
Researchers at Stanford, MIT, and Princeton release an assessment of AI developers’ transparency practices giving them a failing mean score of 37 out of 100. All of the models contained major disclosure issues, leaving critics asking questions about the merits of self-regulation. Axios has the story.
Pew Research Center has a new report out on data privacy and AI. Of Americans Pew polled, 70% say they do not trust companies to make responsible decisions about how they’ll use AI and 81% believe the data collected by companies will not be used in ways originally intended.
Venture capitalist Marc Andreessen, publishes a “Techno-Optimist Manifesto” arguing that the risk of slowing AI outweighs the risk of speedy innovation. Several outlets including The New York Times, Axios, and VentureBeat discuss how his pronouncement of “enemies” to progress including “trust and safety,” “tech ethics,” “and “stakeholder capitalism” hurt his case.
A new study on healthcare and AI led by the Stanford School of Medicine found that while chatbots could help alleviate busywork for healthcare providers, they are perpetuating racist debunked medical theories.
CNBC reports that Ford is the first automaker to reach a tentative agreement with the UAW, which includes a 25% pay increase over the terms of the agreement bringing the top wage to more than $40 an hour and an increase of 68% for starting wages to over $28 an hour. The deal also features cost-of-living wage adjustments, and major gains on pensions and job security.
New York Times columnist David Leonhardt and author of the new book “Ours Was The Shining Future,” explores the ways progress for American workers has drastically slowed since the 1980s and how the idea of the American dream can be revived. One key takeaway he took from his research was the strong role labor unions have played in combating inequality.
The Financial Times highlights the difficulties companies face communicating about the Israel-Hamas War. Some have been criticized for “picking a side” while others have been called out for remaining silent. Many have made the emotional well-being of their workforce the top priority. ABC News discusses how statements from Starbucks, McDonald’s, and Google have sparked controversy.
The Washington Post reports Meta faces a lawsuit from 41 states and DC, making the case that the tech giant is harming children by programming addictive features into Instagram and Facebook. The legal action stems from a 2021 investigation on young people and mental health.
Millions of consumers may be losing access to their local pharmacy as a large number of CVS, Rite Aid, and Walgreens locations plan to close. Health experts worry the shift could create healthcare deserts in underserved, low-income neighborhoods. The Washington Post has the story.
Investment News shares that asset managers are ignoring anti-ESG rhetoric and pushing forward with sustainable strategies. A new report from Cerulli Associates found that no one surveyed plans on ending ESG considerations although they were more cautious around messaging.
Harvard Business Review focuses on the unsung heroes of sustainability at companies, middle management. While CEOs can set the tone, mid-level leaders are the ones propelling initiatives forward, exploring customer demand, and embedding sustainability into core processes.
Axios showcases new data from Third Way and the U.S. Bureau of Labor Statistics, underlining the likelihood job losses in the tech sector will be at the expense of women. Two thirds of the roles at risk are currently held by women without college degrees.
In our latest analysis of corporate supplier diversity data, we found that having a policy did not necessarily translate into a clear and actionable spend disclosure. Of the 892 companies in our Rankings in both 2022 and 2023: 49% had a general supplier diversity policy, but just 22% disclosed spend; 38% had a veteran supplier policy, but just 4% disclosed spend; and 28% had a local business supplier policy, but only 7% disclosed spend.
AI’s importance in the business world is quickly growing – especially when it comes to workers.
Just this week, Google unveiled an AI tool for healthcare workers and doctors. Walmart said it expects 65% of its stores to be serviced by AI within the next five years. New reports show that while some workers are excited for the technology’s ability to help them with tasks, others, especially in customer service, fear imminent job loss. And as more companies adopt generative AI, a new Deloitte survey found that development of ethical standards hasn’t kept pace. While 74% of respondents say their companies are testing generative AI, 56% don’t know or are unsure if their organizations have ethical standards guiding its use.
Leaders of the country’s most historic companies say the technology will revolutionize their workforces and operations – case in point, TIAA, the retirement and financial services company founded by Andrew Carnegie over 100 years ago and now with $1.3 trillion in assets under management.
This week, I sat down with TIAA Chief Information and Client Services Officer Sastry Durvasula to discuss how artificial intelligence will impact financial services in a recent episode of our Linkedin Live series, JUST Better Business. Read the key takeaways from our conversation here.
AI, he said, is impacting “every segment” of TIAA’s portfolio and all of the stakeholders it serves – from employees to consumers to communities. He underscored how the technology will help TIAA on its mission to “retire inequality.” TIAA’s leadership is something other executives will want to take a much closer look at.
Be well,
Martin
Team JUST Capital is once again running the New York City Marathon! We have five supporters running the marathon on our behalf with the goal of raising $25,000. Your support would mean so much to us and them! Please help us cross the finish line with a donation toward building an economy that works for all Americans.
Bloomberg Law features a JUST Capital survey on the importance of corporate transparency when it comes to the environment in a story on California’s new climate disclosure law. Of the Americans we polled, 94% said it is important for companies to be transparent about their environmental impact, and 97% of Democrats and 74% of Republicans supported federal requirements on climate disclosures. .
JUST Capital interviews TIAA Chief Information and Client Services Officer Sastry Durvasula on how the company is approaching AI. The C-suite leader detailed how AI is impacting its clients, employees, and the communities it serves.
“Women make 30% less in retirement income and minorities, especially Black and Hispanic Americans, have various issues when it comes to retirement savings. So if you’re solving for these types of complex problems that are societal, we need a workforce that actually has a level of diversity in designing solutions. We want to retire inequality … I’m quite optimistic about the future.”
AI’s role in election disinformation comes under further scrutiny. Axios reports on new initiatives researchers and activists are forming to help social media platforms curb AI-generated election disinformation and users better spot it. The Washington Post finds that, when asked, Amazon’s Alexa claims the 2020 election was stolen, highlighting how widespread disinformation may become in the lead-up to the 2024 presidential race.
The New York Times unpacks an increase of videos containing AIgenerated voices as misinformation peddlers adopt new AI tools to produce content for TikTok and other platforms.
PwC looks into the relationship between emerging AI technologies and trust. In a preview of its 2023 Emerging Technology Survey, the firm finds that 93% of executives agree that emerging technologies are helping build trust with stakeholders, yet fewer than half of them are taking steps – such as building control frameworks and training staff – to actually harness the trust value of new tech.
Quartz reports on how Walmart workers use AI to more efficiently restock shelves and answer customers’ questions. The company estimates that in the next five years or so, 65% of its stores will be serviced by automation.
As details from the Hamas terrorist attack in Israel continue to emerge, Insider and Wired delve into the changes Elon Musk made to X (formerly Twitter) that have resulted in a flood of misinformation.
Fortune asks a range of communication experts to provide guidance to corporate leaders on how to talk about the war in the workplace. Fortune’s RaceAhead newsletter spotlights actions Uber took in response to escalating violence between Israel and Palestine in 2021 that provide a framework for companies today, including opening the floor to employees to share their concerns, holding listening sessions, and sourcing guidance from external experts.
Axios covers new polling from the Public Affairs Council signaling that there is less support for companies taking a public stance on hot button political issues like abortion, while also demonstrating broad bipartisan support for corporate involvement in environmental issues as well as working to end gender and racial discrimination.
The Wall Street Journal unpacks similar insights from a new Gallup/Bentley University survey exploring that Americans are less likely now than they were in 2022 to say businesses should take a public stance on current events. The findings also underscore that respondents want to see companies make a positive impact not with public statements, but by paying fair wages, providing good benefits, and addressing climate change – all findings that echo our own survey research.
The New York Times asks amid intensifying labor disputes if employers have underestimated the resolve of the post-pandemic workforce and rising public sentiment for collective bargaining while using an outdated playbook for negotiations.
Claudia Goldin wins a Nobel Prize in Economics for her work to better understand women’s role in the workforce throughout history. Still today, women make 80 cents to every dollar a man earns. “We see a residue of history around us,” she said, adding “we’re never going to have gender equality until we also have couple equity.” Fortune’s CHRO Daily reports that more than half of workers with children are seeking out a new job for better childcare benefits.
New regulations from the European Union’s Corporate Sustainability Reporting Directive and the U.S. Securities and Exchange Commission will require corporations to work with a third party to sign off on ESG-related disclosures. According to a KPMG survey, 75% of companies believe they won’t be able to meet ESG assurance standards. GreenBiz has the story. The Financial Times digs into the current state of ESG, positing things might not be as bad as they seem.
JUST’s latest index concept – Workers & Environment Leaders – which tracks the top 20% of companies that perform best across all the Environment- and Worker-related Issues in our 2023 Ranking – outperforms the Russell 1000 by 20%. The companies in this index also outperform their peers on many of the issues we track, including being 16.9% more likely to pay a family-sustaining wage and emitting 55% less CO2 per dollar of revenue.
[Image via Picture This Photography, Atlanta]
How can corporations make a lasting difference to the financial, human, and social capital of cities in America? This was the question Roosevelt Giles, Chairman of the Stakeholder Impact Foundation, former Executive Chairman of Atlanta Life Financial Group, and JUST Capital Board member, put to a group of business leaders JUST Capital convened in Atlanta this week.
It’s a topic that doesn’t get the attention it deserves. Americans want companies to give more back to the cities and communities they do business in. Indeed, many corporations have a rich history of doing just that. Think of Rocket Mortgage in Detroit, Microsoft in Seattle, Prudential in Newark, Walmart in Bentonville. Investing in communities always features in our polling and is a core component of our Rankings.
Roosevelt’s question runs a little deeper though. It speaks to the obligations companies have to nurture strong economic and cultural bonds with the people and places they connect to; to invest in health, education, housing and infrastructure; to create good jobs. To be more just.
In Atlanta, we learned that despite the gleaming new office buildings in downtown Buckhead, economic mobility is low, deep inequality persists, and talent goes untapped. Rodney Bullard, CEO of The Same House and former executive at Chick-fil-A, put it this way; “In Atlanta if you were born in poverty, you have a 4.3% chance of getting out of poverty.”
Overall, our panel – which in addition to Rodney featured Stephanie Martin from the Georgia Chamber of Commerce and our own Ashley Marchand Orme – stressed that business leadership was needed now more than ever. “It’s all about cities like Atlanta figuring out how to deepen relationships with CEOs. When the community does well, companies do better,” said one prominent guest. With 17 Fortune 100 companies and a deep-rooted culture of philanthropy in the Greater Atlanta area, perhaps “the Atlanta way” of bringing private, public and philanthropic leaders together can inspire a new model for community development.
Be well,
Martin
AI is reshaping the business landscape, and financial services is no exception. On October 10th at 12 p.m. ET, Martin Whittaker will sit down with TIAA Chief Information and Client Services Officer Sastry Durvasula for a LinkedIn Live to discuss how AI is impacting workers, investors, customers, and other stakeholders. The two will also discuss Durvasula’s extensive work upskilling and reskilling workers through technological changes, with takeaways for business leaders. Sign up to join the discussion here.
October 5 marks Latina Equal Pay Day, recognizing the number of days into the year that Latinas must work to earn as much as a white, non-Hispanic man typically earned in 2022. CNBC reports on the wage gap Latinas face, losing $1.2 million over the course of their careers, citing JUST Capital research that finds “24% of Russell 1000 companies disclose that they conduct a pay equity analysis with a specific focus on race and ethnicity. Within that group only 9% — or 85 companies — have disclosed the results of their analyses.”
Gartner features JUST Capital research in a new blog post highlighting our Worker Leaders index concept and making the case for the objective value of ESG. “When JUST Capital compares the market performance of companies on their annual ranking that score in the top 20% for worker issues to the broader Russell 1000 stock index, it has consistently shown outperformance by the Workers Leaders group.”
JUST Capital CEO Martin Whittaker joins the Enterprise Engagement Alliance (EEA) to discuss the state of stakeholder capitalism and ESG. Other panelists include EEA Managing Director Bruce Bolger and R. Edward Freeman, Professor of Business Administration at the University of Virginia. Watch the full conversation here.
B Lab’s B The Change newsletter features an article focusing on the “S” in ESG. JUST Capital’s Managing Director and Head of Investor Strategies Cambria Allen-Ratzlaff talks to the nonprofit about the expectations the American public has for companies to invest in good jobs and how companies’ relationships with their workers influence the bottom line.
Roosevelt Giles, Image via Picture This Photography, Atlanta.
“When you talk about capital, there are three buckets. You’ve got financial capital, human capital, and social capital. When you look at a lot of the noise today around financial capital, it’s shareholder primacy. Well that is in conflict with human capital and social capital. Historically, there was a deep bond between corporations and employees. If there was a problem, I knew the company would take care of me. Also, people recruited their family members to their companies. People performed well because they did not want to embarrass the family, you had that built-in mechanism. But that’s broken now.
Now the relationship between human capital, social capital and financial capital is transaction based. That’s a problem. What JUST capital is doing is we’re working with companies with our data to bridge these things back together, so that capitalism works for everybody.”
“There’s an outsized impact corporations have on society. Corporations have to be engaged in finding solutions. In looking for ways to guide change, we should be able to turn to boards. Board directors have much longer tenure than CEOs when you think about it, they can guide change for the long-term in ways CEOs can’t. They can raise their hand and ask company leaders, ‘What are our biggest human capital and equity challenges? How can our company address those?'”
Fortune’s CEO Daily touches on AI’s “shiny object” problem. CEOs are pushing for broad and rapid adoption of the new technology before businesses can implement proper guidelines and precautions.
JPMorgan Chase CEO Jamie Dimon says future generations will have 3.5-day work weeks and live much longer lives thanks to AI.
The New York Times publishes an opinion piece highlighting the precedent set by the new WGA deal in respect to AI and labor negotiations. The striking writers were able to center regulations around the new technology in their revised contract.
LinkedIn debuts a new platform for recruiters powered by AI. The new tool will streamline and simplify the way employers find candidates for new roles. Axios also reports on LinkedIn executives making the case that AI’s ability to upskill workers could reduce the value of a four-year college degree for job candidates.
A new opinion piece in The New York Times argues that higher wages for workers will not lead to the much feared wage-price spiral. New analysis from Goldman Sachs included in the article and also covered by Axios finds that increases are essentially an “echo” of raises in other sectors over the past two years.
More than 75,000 unionized Kaiser Permanente employees walk out on strike marking the largest labor action by healthcare workers in U.S. history. Workers are hoping to resolve staffing shortages that have left many of them feeling overworked and burned out.
CNBC reports on the tension brewing between automakers and union leaders. Both GM and Stellantis have accused UAW president Shawn Fain of a delay in sending counterproposals as the union threatens to expand its strike.
Ken Frazier, former CEO of Merck, spoke out during Fortune’s CEO Initiative conference, arguing that CEOs have a responsibility to speak out for democratic principles when they are not being upheld by elected officials.
Forbes writes about Walmart’s plan to remove college degree requirements from a large swathe of corporate job descriptions. The ongoing labor shortage has pushed companies to reconsider what they prioritize when considering a candidate.
According to Indeed, more than half of U.S. job postings now have salary and wage information, a 50% increase from 2020. HR Brew has the story.
On September 30, $24 billion in federal funding distributed to childcare providers and facilities expired – creating what’s been termed a “childcare cliff” in the U.S. The stoppage could lead to 70,000 childcare programs closing, according to estimates from the Century Foundation, and employers may need to adapt care policies accordingly, including parental leave. JUST analysis finds that only 9% of Russell 1000 companies offer parity of 12+ weeks in paid parental leave for both primary and secondary caregivers. We also took a look at the top companies for working mothers and fathers among the largest U.S. employers, taking into account parental leave, backup dependent care policies, subsidized childcare, and flexible work practices. Learn more about how we’re helping companies prioritize care through our Corporate Care Network.
The American worker takes center stage yet again.
Last week, one of the country’s most powerful unions authorized potential strike action over its demand for a 40% raise spread out over a multiyear contract. Members of United Auto Workers overwhelmingly gave union leaders the green light to call strikes during ongoing contract negotiations with the so-called “Big Three”: General Motors, Ford Motor, and Stellantis. It’s the latest in a string of worker power struggles that over the last few months have affected industries from logistics, warehouse, and delivery services (UPS, Amazon, and FedEx) to health care workers and hotel staff.
At JUST, we track corporate performance on worker issues closely. It’s the public’s No. 1 stakeholder category, receiving strong bipartisan support, and a critical driver of business success. I’ll note that our Workers Leaders Index Concept – which tracks the top 20% of companies in our Rankings investing in their workforces – has outperformed the Russell 1000 Cap-Weighted index by 3% and the Russell 1000 Equal Weighted index by 6.7% from December 31, 2021 to August 28, 2023. Two major features we published this week will enable you to dig a little deeper if you’re interested.
The first is our annual “Top 10 Companies That Treat Employees Best” feature. Always a popular list, this details the companies that score best on all five worker-related issues in our annual Rankings. And the second is a brand new resource for corporate leaders we’re calling “The Corporate Guide to Human Capital Disclosure.” Here, we unpack in detail which issues matter most when it comes to worker treatment, as well as key insights relating to each data point including leading practices, disclosure trends for key thresholds, and links to what good looks like from specific companies.
With new SEC human capital disclosure rules possible this fall, not to mention Americans’ heightened expectations from business leaders on good jobs and increasing worker activism more broadly, the stakes are very high. It also lends Labor Day, Monday’s federal holiday honoring American workers, a fresh relevance.
Be well,
Martin
Among the 10 Companies That Treat Employees Best, these are the top five leading when it comes to their workers. Here are just a few of the ways these companies stand out:
Brandon Gomez of CNBC covers JUST Capital’s new report that finds that less than 5% of companies in the Russell 1000 disclose a fair chance policy, or one that promotes hiring people with a prior criminal record.
Dan Schulman, PayPal CEO, and Kathryn Finney, founder of the Genius Guild and recipient of the PayPal’s inaugural Maggie Lena Walker Award, sit down with Marie Claire. Schulman – who helped co-create The Worker Financial Wellness Initiative with JUST Capital – discussed the program and the importance of investing in workers. “CEOs serve multiple constituencies, but the number-one constituency for me is our employees – if they’re passionate and healthy, you’re going to be successful,” Schulman said.
“Americans have high expectations for companies when it comes to how they treat their workers. As evidenced by all the worker activism, so do employees. Business leaders I talk to are worried about that activism, worried about getting dragged down by politics, worried they’re not hitting their productivity numbers, and more. What I see is a major opportunity: Be crystal clear in your workforce strategy, measure what kinds of jobs you have, be transparent on how you’re investing, create a path for employees to create value for your company, and talk about it publicly.”
CNBC announces the launch of OpenAI’s ChatGPT Enterprise, a business-focused update for the chatbot. Companies will be able to train the software on their private data.
Axios shares a new chart surveying what employees want from AI – “producing high quality work in half the time” was first, while “outsourcing all my busywork” and “never having to write a first draft” also made the list.
Elon Musk of Tesla, Sundar Pichai of Google, Sam Altman of OpenAI, and Satya Nadella of Microsoft will gather in Washington next month to discuss AI regulations in front of Congress.
Former American Express CEO Ken Chenault and Merck Executive Chairman Ken Frazier pen an essay in The Wall Street Journal remembering the forgotten part of MLK’s dream: good jobs and higher wages.
A new poll from The Black Economic Alliance Foundation and The Harris Poll finds Americans overwhelmingly support corporate DEI initiatives across racial, ideological, and generational lines. They also believe the programs lead to better run businesses and innovation.
Axios reports on the labor shortages affecting high-stakes sectors like law enforcement, healthcare, and education. Although unemployment is historically low, the decline of the working age population continues to stress the deficit.
CNBC writes about the 320,000 workers who have participated in at least 230 strikes this year and their success as many labor actions have resulted in better hours and significant wage increases.
The U.S. Department of the Treasury releases a new report that finds unions are one of the best ways for employees to guarantee a higher wage. The median American union worker earns 20% more than their non-union counterpart. Quartz has the story.
Morgan Stanley has a new report highlighting the overperformance of sustainable funds versus their traditional counterparts. In the first half of 2023, sustainable funds saw a median return of 6.9%, beating traditional funds’ 3.8% and reversing their underperformance in 2022.
One of the more eye-opening insights from our Corporate Guide to Human Capital Disclosure is how low disclosure is across the board for most human capital metrics and data used to assess key worker and job quality issues. Whether a prospective employee is curious about the quality of jobs at a company or an investor is seeking further information to guide capital allocation decisions, meaningful metrics are lacking. For example, 20 of the 28 data points we tracked for the initial launch of the JUST Jobs Scorecard are at 40% disclosure or less. To explore how to use JUST’s framework and data insights to bolster your company’s performance on worker issues, click here.
