KEESA:
Today I'm speaking with Sarah Bratton Hughes, head of Sustainability North America at Schroders to discuss the theme of quality jobs.
KEESA:
Now Sarah believes that this does not mean just higher wages, but it's also about including other key needs and opportunities. And we're going to separate myth from fact.
KEESA:
Around how quality jobs might impact companies, their culture and even their bottom line? Sarah welcome back to the podcast.
SARAH:
Great, thank you so much. So excited to be here today.
KEESA:
So, so you've talked about the misconception of what people think when they hear the term quality job. Tell us more about what this really means in the context of your report as well as in the context of what's going on in society today.
SARAH:
Great, thank you. So most people think of the term quality jobs and they simply think that that's just paying people more money or offering them benefits that will hurt companies margins over time.
SARAH:
But that's simply not the case. Actually, I would argue the opposite is true, that if you invest in your employees rather than treat them as live.
SARAH:
Abilities over time that will lead to increased sales, higher profitability, lower health and safety incidents, and increased margins. Why is that?
SARAH:
It's 'cause there's multiple pillars to a quality job strategy, and the first part of it is really defining what is a quality job. There's no universal.
SARAH:
Universal definition yes, it is financial security, right? If we can't pay for the food above our head or the the food on our table or the roof above our head.
SARAH:
Uh, everything else is a bit of a moot point, but also does the job actually allow for the employee to save for retirement benefits over time.
SARAH:
Super important is healthcare and employee. Well being does the company offer affordable health care and affordable is the key word here, because if it's if you're a.
SARAH:
$10.00 an hour employee and you have a $6000 deductible. You might as well not have health care.
SARAH:
Even more important, in COVID times are you getting paid time off and paid sick leave? How are companies prioritizing worker health and safety so many people think about quality jobs and they think about.
SARAH:
Uhm financial and employee. Well being but there's two other very important pillars. Probably the unsung hero of quality jobs is this focus on engagement and satisfaction.
SARAH:
How engaged and satisfied or your employees? Because that's really actually indicative of corporate culture that will keep your turnover level.
SARAH:
Levels low, how are you monitoring that and key to executing a quality job strategy over time? Is this focus on career development? How are you cross training your employees? Are you promoted?
SARAH:
Within are you giving all employees equal access to growth and promotion opportunities? Because overtime, that is how you build those last two pillars. Engagement and satisfaction and their career development that will are really key to executing a quality job strategy.
KEESA:
So that that's really interesting, and I'm thinking about this right now in the context of the job market, you know? Third quarter we're hearing that it is an employee.
KEESA:
The market of that everyone hiring in that you can really broker or the best opportunity for yourself. So so do you see this right now.
KEESA:
Do you see even with the job market being as it is being so hot, being a good one for employees that they are able to come into this to get quality jobs easier?
KEESA:
Then they would have a year ago this.
SARAH:
I think there's a lot more focus on it, so you have economists citing sort of lackluster job numbers or what we call here.
SARAH:
The 33%, the 33% of jobs that are still left behind from the the pandemic, you know you have economists pointing to these widespread labor shortages and disruptions.
SARAH:
They're saying you know, lingering virus fears, lack of childcare, generous unemployment benefits. But actually I would argue what we have is a quality job problem, right?
SARAH:
And we had this prior to the pandemic. The pandemic shone a light on it, but actually this is a problem that has been systematically happening.
SARAH:
Since the 90s, out of all the job growth we've had since the early 90s, only 37% of it has been in what we would consider quality jobs.
SARAH:
So we've had this systematic problem now what are we seeing? Yes, the tides are are turned. You're seeing many of these companies trying to offer generous benefits. I even heard a story.
SARAH:
That one company was offering free beer, so you're seeing at the tide in many of these industries service industries.
SARAH:
Hourly worker industries retail restaurants where you're seeing the employees start to have a lot more leverage and what they're looking for to go back.
SARAH:
But I I would still argue whether those generous unemployment benefits are here or not. We have a quality job issue and that is unfortunately.
SARAH:
Two decades in the making and systematic and and we need to do something about it as an overall economy.
KEESA:
So OK, let's start breaking this down that you talked about. You know sectors those in the restaurant, industries, etc. They may be in a different position.
KEESA:
And then others. Let's look at it from a race and gender perspective. What is the data show about the correlation between those quality jobs and who gets them in terms of ethnicity, race, gender?
SARAH:
Candidly, it's a little bit depressing if you dig into the data, and it's even more depressing post COVID so you can look at all kinds of quality job metrics and and the reality is situation is if you're a person of color or a minority and you're a woman, you are far less likely to have a good quality job.
SARAH:
Than a white male and you can look at across.
SARAH:
Any demographic, whether you're a high school educated, whether you have some college, whether you have four years of college.
SARAH:
Unfortunately, that's the reality of the situation, and COVID has only made it worse, particularly for women and minority women where we saw them be the largest kit in terms of #1.
SARAH:
They were much more likely to be in some of these industries that became frontline workers during COVID or retail hospitality, and we've just seen Exodus from from the job market that has yet to recover. So unfortunately for me when I dug into the data, it just got more depressing.
SARAH:
And COVID didn't really make it any easier, but what I can say now I'm an internal optimist. You know that about me?
SARAH:
So I think we are definitely in a period right now where we have the ability to really think about how businesses are structured. There's a big box retailer out there.
SARAH:
That raise their minimum wage to $16.00 an hour. They offer great employee benefits. They're getting inundated, right? And I think we've all probably know the big box retailer I'm talking about. Compliance won't let me name them.
KEESA:
SARAH:
But go look at their twenty year price target. It's a pretty attractive place to be from an investor as well, so this can be done.
SARAH:
We just need to think about the stakeholder model a little bit differently and we can return benefits to workers as well as shareholders.
KEESA:
So and you bring up a good point to what's attractive to employees may also be attractive to stakeholders, which is great for the company.
KEESA:
And let's think about this in terms of what we are hearing termed as green jobs and the green economy. We hear a lot about that.
KEESA:
Do you think that these quality jobs and you just mentioned that if you were a woman, a woman of color, that the numbers did not look very promising?
KEESA:
Do you think that there is an opportunity for folks who are not seeing quality jobs right now to move into those green job areas?
KEESA:
And how are you seeing based on the data, how people doing that? What does success look like in terms of moving into?
KEESA:
A quality job in the green economy space.
SARAH:
Yeah, so I think that's actually really important as we're continuing to see all these calls for. Net zero. How companies are going to transition.
SARAH:
You're seeing investors globally saying, oh, I don't want to have any exposure to coal. Well, actually, if you don't have any exposure to coal, then you're probably not going to have exposure to the US utility sector that is still transitioning off a call. And that's a sector.
SARAH:
That tends to provide higher quality jobs, good employment, good benefits, right? So we need to be really focused on what I consider a just trans.
Speaker 3
SARAH:
Position where you're retraining employees and what you can see is if you look at the number. The job numbers within industrials, right?
SARAH:
Women are really lagging in terms of employment in that sector. However, there are some high quality jobs in there that are offering great benefits to the actual employees. And these companies are continuing.
SARAH:
To outperform, so I think about the quality job issue from an investor in two different ways, right? One is investing with a company and engaging with them to optimize that employee stakeholder and unlock that long term value. Another area where you can invest is you can go into a company that's historically in an industry.
SARAH:
Three that is offered poorer quality jobs, so think of something like food processing industry right is much needed for our economy.
SARAH:
We all saw what happened in our cells in the supermarket when COVID went through food processing plants. There were shortages of everything here. We couldn't buy chicken. We couldn't buy beef every other week. It was a different protein.
SARAH:
So going into an industry like that and providing capital to a company that is operating responsibly and treating their workers as a material stakeholder and giving them more capital to continue to grow. So I actually think you can borrow.
SARAH:
Well, this approach and I think in terms of quality jobs when you talk about empowerment for women and minorities, I think it's a great way of attacking the problem.
SARAH:
Bottom up, there's a lot.
SARAH:
Of great strategies out there that attack it from the top. So focusing on engagement for women and minorities in in the boardroom.
SARAH:
In management, and those are awesome and fabulous, and that's the top down approach. But I also think we need to think about the bottom up if we think about the long term economic benefits and multipliers to our economy here in the US, ensuring that it's inclusive.
KEESA:
Great, now I know also in terms.
KEESA:
Of the report, I don't think that this was covered, but so I just want to get your thoughts about an area of Labor that we frequently don't talk about as it relates to quality.
KEESA:
And that's domestic work and farming. Wanted to see if there is information research that you've seen done on how we are improving in this particular area.
KEESA:
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KEESA:
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KEESA:
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SARAH:
That is an area that we still need to focus on in terms of quality jobs and particularly around domestic working as well as home health, and I think it's an area that we need to continue to focus on and the pandemic brought that all to light my own.
SARAH:
Sort of personal story around this. I have told you.
SARAH:
You know I have a family member who is in a home health care facility. He is disabled and COVID ripped through that whole facility and they had a very hard time.
SARAH:
All of the workers were minority workers and many of them chose not to come to work. There were a few that actually moved in and to me.
SARAH:
This is when I really became.
SARAH:
I've been done work on this issue before COVID, but I came sort of obsessed with it is because I knew there had to be a better way.
SARAH:
But in order for there to be a better way, you have to make it economically work right? If you want to get the investment dollars to flow in, it has to work economically. And there's been a lot of great work by the Good Jobs Institute and professors, and optom where she is.
SARAH:
Showcased a number of ways from an economic perspective, you can make this work and like I said, you can look at cases in both the public as well as private markets that if you invest in your employees over the long term, it leads to lower turnover, which leads to.
SARAH:
So higher, particularly in home, you think about farming and domestic workers, where safety is a huge important aspect. So it leads to lower safety incidents, higher profitability, better margins, things are done efficiently.
SARAH:
Your workers are empowered to make decisions without having to wait for the Home Office. So this is an area for us, particularly health care.
SARAH:
Services that were very focused on quality jobs and quality jobs going forward.
KEESA:
So Sarah just rounding this all out as we move into the future, just tell us why this focus on the quality jobs and giving deep intense thought and conversation around this is important for investors and society. Not just today, but moving forward.
SARAH:
So Gallup did a study and they estimated that disengaged workers. So that's a big remember. We talked about engagement actually being the unsung hero and indicative of corporate culture and driving returns.
SARAH:
Disengaged workers cost the US economy between 450 and $550 billion.
SARAH:
SARAH:
An annual basis. This is a significant amount of money to our economy. Then you think about the potential multiplier effect over time.
SARAH:
You think about the multiplier effect by increasing wealth in the hands of women and minorities. You think about that multiplier effect over time.
SARAH:
This is very positive for our economy, but it also requires an mind shift and it requires patience on behalf of investors as well as buy in from boards of companies, particularly those that really need to.
SARAH:
Make a shift so it requires commitment over the long term, but for me over the long term it's really a no brainer 'cause when you think about the multiplier effect over time to both the individuals as well as our overall economy, it has the potential to be massive.
KEESA:
Great information, so first of all.
KEESA:
I mean that is a huge point. This engaged workers cost the US economy 450 to 550.
KEESA:
$1,000,000 something to think about. So how do we move from that to engagement? Ensuring that employees are satisfied and engaged, ensuring that the corporate culture is where it needs to be to keep them that way and also financial well being is important. So including that in there and employee mental health well being as well as the physical health.
KEESA:
We talked about a little later, so how can we execute quality job strategies? Incorporates cross training.
KEESA:
Promoting within having equal access to growth and promotional opportunities, and really understanding that some employees are in a different position than others and just being real with that.
KEESA:
When you have women of color that is an area to look at according to the research. And as we all know, we really need to be attentive to that particular demographic and also certain.
KEESA:
Industries we're seeing really need to have a focus on safety issues and things of that nature or health care or domestic workers.
KEESA:
Really good to look deeper into what that specific industry needs. Sarah. It is always such a pleasure chatting with you. Thank you so much.
SARAH:
Thank you so much. Always fun and engaging.
