with Bridget Venne
What can be done by firms and their business associations to create better employment opportunities or to transform lousy jobs?
In this series of articles about the causes, consequences and cures of the loss of jobs that pay well and demand low- or moderate skills, we have focused only on what the government could do (along with its nonprofit and for-profit partners). In other words, we have sought public policy solutions.
However, in our view, the business community itself could do more to aid in the retention of family-wage and benefit jobs and, as a result, see higher productivity and lowered turnover.
Let’s begin with turning less-than-perfect jobs into decent employment.
Transforming Jobs
Expanding decent employment can have significant benefits for both employees and business owners. Vermont Businesses for Social Responsibility (VBSR) runs a fascinating program that educates businesses about what pay and benefits a job would have to provide for a firm’s employees to lead a less stressful and more forward-looking and empowered life. VBSR defines “livable jobs” as those that provide “a combination of wages, benefits, and workplace practices that allow a full-time worker to be financially self-sufficient.” What distinguishes this organization is its focus on providing “good jobs” while maintaining profitability. With national turnover costs estimated as costing between 25%-200% of total annual compensation (at least $5,000 per $8/hr employee) 1, and lost productivity due workplace stress estimated at $50-300 billion dollars a year 2, they might be onto something.
VBSR has published an excellent workbook that provides a forum for a non-threatening, careful inquiry into the quality of jobs currently available at a given firm and whether it is desirable, feasible and achievable to upgrade some or all of the firm’s employment opportunities. The Livable Jobs Toolkit is an invaluable resource for businesses who want to create jobs with attractive wages, benefits and workplace practices. It is also useful for any company who competes for talent in the marketplace and relies on a productive workforce. The Toolkit provides small and medium businesses with ways of innovative and, often, neutral cost solutions to attract and retain good employees.
How Does the Toolkit Work?
The Livable Jobs Toolkit begins by exploring the hidden costs of lousy jobs. The toolkit user first defines the key factors underlying firm profitability to see how a more livable workplace might improve the bottom line. As the majority of these factors—customer satisfaction, increased sales, higher production or decreased errors—rely on employee commitment and performance, the potential benefits of a life-friendly workplace are readily apparent. Secondly, the user calculates the true cost of employee turnover from time spent in exit interviews to lost productivity during a new worker’s learning curve. The user can then assess the wages, benefits and workplace practices currently in use at her firm, formally or informally, and benchmark her competitors to determine if the firm can gain a competitive advantage from implementing more livable policies.
After the toolkit user has an accurate picture of the company as it is, the Toolkit provides extensive resources to evaluate alternative wage, benefit and workplace policies that might benefit the company as a whole. These range from low-or-no-cost solutions to choices with a higher initial cost but the potential for significant returns. The solutions include flexible work arrangements, compensation choices from profit-sharing to employee expense reduction, and several benefit packages. How to determine which combination of these solutions is right for a given firm? Ask the employees themselves.
A North Carolina Corporate Responsibility Compact
How could we make livable workplaces the norm in North Carolina? By building awareness of the benefits of livable jobs to both companies and communities – increasing the visibility of firms who provide these jobs, and providing support to firms interested in exploring work-life friendly options. The North Carolina corporate community has the opportunity to adopt a voluntary compact, coming together to address these sorts of issues and alternatives and absorbing some of the costs of acquainting their member companies with best practice in creating livable jobs. Economic developers across the state have the opportunity to step in to help businesses analyze the true costs of their current workforce practices, and to support policies, such as individual development accounts and earned income tax credits, that help reduce employee expenses. The state could also recognize North Carolina companies that have adopted livable job policies, allowing customers to choose goods and services from state-certified “livable workplaces.”
There are many ways the private sector can help create good jobs. What businesses need to recognize is how much they can improve their own bottom line by doing so.
Bridget Venne is a former architect that is now attending graduate school in Chapel Hill at the University of North Carolina’s School of Business and Department of Planning. She is also a research intern at CFED’s Durham Office.