Op-ed: Companies that invest in high quality workplace frameworks strengthen workplace culture and improve business results
Only a third of the workforce in the bottom quintile has access to health insurance, retirement plans, or paid sick leave – facts made worse by the risk of, say, a cashier taking on during a pandemic.
Luis Alvarez | DigitalVision | Getty Images
Before the Covid-19 outbreak early last year, the US labor market was at its lowest unemployment level since 1969. However, the glowing headlines did not reflect the underlying dynamics.
A Gallup poll found that 60% of the jobs here in the US are considered “mediocre” or “bad” jobs. This stress directly affects many communities and millions of American workers.
The various protests over the past year and the 2020 presidential election have put the spotlight on the need to rebuild an equal and cheaper economy.
The Quality Jobs framework, based on research by the Good Jobs Institute, seeks to address this challenge. QJ strategies believe that companies that invest in improving the lives of their employees – higher wages and better performance, and strengthening workplace culture – improve business results. This framework challenges the idea that lowering the cost of human capital (ie wages) leads to higher profits. In fact, it believes the opposite.
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Basically, a quality job means that a person’s work is valued and respected and makes a significant contribution to the goals of the organization. It includes a voice in the workplace and the ability to shape your work life. It means having accessible opportunities to learn and grow.
Jobs that do not meet employee needs have above-average fluctuation, employee dissatisfaction, poorer productivity, and poorer customer experience. So QJ is both an investment opportunity and a social welfare tool, adding value through a more efficient workforce.
Too many “bad jobs”
In 2019, 46.5 million Americans had jobs where the average wage was less than $ 15 an hour. For someone supporting a family, that income level would be well below poverty in any single state in the country. And all too often in 2020 during the pandemic, the same underpaid employees (usually in the restaurant, retail and hospitality sectors) were asked to take risks that higher earners did not.
It is also important to note that the nature of the job does not determine whether it is a “quality” or “poor quality” job. How the company treats its employees is important.
Achievements, another good indicator of job quality, have unfortunately lagged even for low-paid workers. Gallup’s 2020 report “Characteristics of Good Jobs for Low-Income Workers” found that only about a third of the workforce in the lower quintile had access to health insurance and retirement benefits, with an even smaller percentage receiving paid sick leave. Again, the matter was made worse by the risk a cashier, for example, would take during a pandemic.
Corporate culture is another area where low paid workers have suffered. We see agreement across the entire income spectrum: feelings of purpose in daily work, support from management and clear growth paths are important for your professional satisfaction. However, because of these factors, only 28% of the lowest quintile of the workforce can claim to have a good job.
The inequalities created by the numerous events of 2020 and in the data have highlighted an important mandate.
Better jobs, better companies
It’s not just the moral argument that dictates quality workplaces, however persuasive it may be.
Let me explain. Layoffs cost companies an average of $ 350 billion per year, or $ 2,246 per laid-off employee. These are high costs for companies and a reason for companies to invest in the transformation of their workforce.
Good quality employment strategies can also have the greatest impact on promising companies that suffer from high sales alongside low productivity or lack of commitment. According to Gallup, companies can spend almost 34% of an employee’s wages on costs associated with training new employees, low productivity, and absenteeism.
So quality jobs capture current unrealized value by increasing engagement and lowering costs by limiting revenue.
Today, 55% of the bottom quartile of the workforce consider their current occupation “just a job”, while 63% of all others consider their job a “career”.
This sense of opportunity is just not so realized for those who receive the least. A high quality workplace company approaches its workforce with a justice in which each employee is a valued stakeholder rather than a balance sheet item or commodity.
Given the long-term return benefits, why should investors encourage companies to invest in their people? The question is why not?
– By Marc Brookman, Schroders CEO North America