Amazon has a new CEO, Andy Jassy, as of July 5, and top of his agenda is to “Strive to be Earth’s Best Employer.” This new leadership principle calls on the company to “work every day to create a safer, more productive, higher performing, more diverse, and more just work environment” (the highlight is ours).
It’s a big statement. Amazon has experienced some high-profile controversies relating to its approach to human capital and the company’s leadership is signaling that it knows it can do better. Jeff Bezos acknowledged as such in his final letter to shareholders. And with the company positioned to be America’s biggest employer in the next couple of years, it has the influence to dictate the entire bottom end of the retail and service economy.
It’s also about beating the competition. The firm’s retail rival Target was lauded this week for its unusually low turnover numbers at a time of record high national quitting rates. What’s its secret? Surprise, surprise – it involves paying a fair wage and providing good benefits, advancement opportunities, training, flexible scheduling, and other things the public has repeatedly told JUST matter the most.
McDonald’s is waking up to this fact, too. In a New York Times interview last week, CEO Chris Kempczinski underscored the company’s commitment to raising wages for workers at company-owned restaurants by 10%, towards a goal of $15/hr. “We think about it from a stakeholder perspective”, he said. (The fact that the vast majority of restaurants are franchised, and owners are free to make their own decisions, is a concern.)
The latest JOLTS and labor market numbers suggest that companies will continue to be rewarded for leadership on employee and contractor treatment. The key now is 1. For companies to adopt this mindset and 2. To help the free market do its job and incentivize good performance. Supplying the requisite information needed to make apples-to-apples comparisons of companies across wages and human capital metrics is therefore a must.
Job seekers should know which jobs are best. Consumers should know which companies align with their values. And investors should know which companies see human capital as a value creator. As SEC Chair Gary Gensler put it Wednesday: “I think investors should be able to drill down and see what’s under the hood of these funds.”
We agree – it’s time for the market to know who, in fact, the Earth’s best employer really is.
This Week in Stakeholder Capitalism
The Motley Fool showcases eight major corporations that are raising starting wages for all of their employees, including Bank of America, Target, Chipotle, Costco, McDonald’s, Under Armour, Wells Fargo, and Best Buy.
Google has doubled the amount of Black employees on its leadership team.
Microsoft is giving employees a $1500 bonus worldwide for their work through the pandemic.
What’s Happening at JUST
Alison speaks to the BBC on “The Great Resignation” and why the pandemic cast an even harsher light on how companies were treating their employees, fueling the wave of job transitions hitting the U.S.
Board Member Giles Roosevelt takes to the Atlanta-Constitution Journal to talk about how corporate boards can become more inclusive and how the Herndon Director’s Institute is helping prepare underrepresented minorities for board roles in the U.S.
Martin joins Carol Cone’s Purpose 360 podcast to talk about our Corporate Racial Equity Tracker, advancing the stakeholder economy, and how executives can make better decisions for their companies with honest internal assessment. Listen here.
Looking for summer reading? JUST Advisor Susan McPherson’s new book, “The Lost Art of Connecting,” was recently selected by Fortune as one of the best books of the first half of the year.
(Brad Barket/Getty Images)
“This idea that care infrastructure, systems, policies – including a really strong care workforce – is essential and fundamental to our ability to fully participate in the economy, and really to participate in society as a whole, was really revealed for all of us to see, even as we were shut behind closed doors during the pandemic.”
- Ai-jen Poo, Co-founder and Executive Director of the National Domestic Workers Alliance, in a Center for American Progress webinar, on why now is the time to rethink benefits that accomodate women in the workforce.
“We made a commitment around raising all the wages for our company restaurant employees by 10 percent, on a pathway to $15 an hour. We need to lead the way. If you’re a franchisee who believes that the people working in your restaurant are a cost, and that you want to minimize that cost, we’re out to prove that investing in higher wages can grow your business, because you’re going to drive better customer satisfaction and actually make more money. It’s a mind-set shift.”
- Chris Kempczinski, CEO of McDonald’s, on how raising wages in company-owned restaurants should hopefully convince franchisees to do the same.
“It’s increasingly appreciated that lack of competition has held down wages and that there’s a lot of scope for government to improve that. I don’t think addressing competition issues will miraculously transform inequality in this country, but it will help. The government should be on your side when it comes to wages.”
- Jason Furman, former Chair of the White House Council of Economic Advisers,discussing the Biden admin’s upcoming executive order to increase labor market competition for workers.
Must-Reads of the Week
The Wall Street Journal looks at what S&P companies paid their employees during the pandemic, noting both the highest- and lowest-paying throughout the year. Looking beyond the S&P 500, The Washington Post highlights how companies in every industry – particularly restaurants and hospitality – are now raising wages to lure back workers.
Business Insider underscores that we’re only at the start of a new period of massive worker burnout.
The Economist highlights a new study suggesting that remote workers aren’t actually more efficient, they’re just working much longer hours than those who have returned to the office.
Barron’s explains why the largest retirement plan in the U.S. offering ESG funds is a massive step forward for the sector, and Pensions & Investments reports that the SEC plans to approve diversity and inclusion measures in the asset industry.
Axios comes in with the feel-good story this week – America is currently experiencing a record low for layoffs as employers struggle to hire.
Chart of the Week
Our latest Chart of the Week breaks down the companies that offer tuition reimbursement by sector, finding that Utilities and Telecommunications are most likely (by percentage) to offer these benefits. Learn more here.