OF INTEREST

• 26th October 2021 Comment on thisThe great workplace reinvention

  

  We’re witnessing the prospect of reform that allows all workers to grow into their potential, enables organizations to thrive, and permits us to produce shared, sustainable prosperity.

  It’s been called the Great Resignation, the Great Reassessment, even an opportunity for a Great Retention.

  I have another suggestion for naming the upheaval under way in how employees, organizations, elected leaders, and investors are thinking about the way we work: the Great Workplace Reinvention.

  I think “reinvention” is a helpful term for understanding what’s happening now—and what’s possible.

  It’s too simplistic to say people are resigning from their jobs en masse. Although some Americans seemed to choose more generous unemployment insurance rather than urgently seek new work, that’s not the whole story. In fact, evidence suggests that cutting off those bigger benefits did not prompt workers to rush back to work.

  Instead, people are reassessing what work means to them. The pandemic, racial reckoning, political turmoil, and the ravages of climate change are all prompting reflection about personal purpose, collective responsibility, and how jobs align with deeper priorities.

  But it’s not just workers who are assessing and reflecting. So are companies, public officials, and investors. I see something more interesting and profound happening.

  All these stakeholder groups are refashioning their relationship with work and business. They are actively, in real time, experimenting with the social contract that has governed employment in America for most of the past century. They are tinkering with the very foundations of our economy.

  And that gives me hope.

  I believe we are witnessing a long-overdue rebalancing of interests and influence. And as employees use their new-found voices – and leverage – in this moment, I see the prospect of reform that will allow all workers to grow into their potential, enable organizations to thrive, and produce shared, sustainable prosperity for society at large.

  The pandemic prompts reflection

   Everyday employees kicked off this process of reinvention. They are looking to change jobs – a striking 65 percent of employees are doing so.

  What the pandemic provided was an opportunity for people who received unemployment benefits (that, in some cases, exceeded their typical paycheck), as well as for many people who continued working, to reevaluate their lives, the things that matter to them, and how they want to spend their time.

  And no wonder. Decades of declining job quality have left many people with low wages, little say over their work, and few opportunities for growth or upward mobility.

  A “good job” provides personal and professional development, fair pay, purposeful work, a sense of belonging, and a feeling of dignity.

  Creating good jobs in the growing “gig” economy is part of the reinvention of work under way.  Some freelancers love their flexibility and independence. But many elements of a good job are out of reach for gig workers. Despite the growing number of workers engaged in this newer sector of the economy, we haven’t yet figured out how to make it work for all parties.

  Workers seeking a full suite of positive job benefits have typically had to turn to large companies. But approximately 20 million workers in the US are employed by businesses with fewer than 20 employees. Many of these employees don’t have a college degree and have little prospect for higher-wage employment. Among low-wage workers, nearly 54% are women and 45% people of color. If we could transform these jobs into good jobs with opportunities for continued professional growth, perhaps we could begin to close equity gaps in America, while enhancing the vitality of small businesses.

  In a project newly funded by my organization, IRC4HR, researchers Jennifer Gresham and Ellen Frank-Miller are exploring how small businesses can create good jobs and contribute to what they call “Collective Thriving.” Jen and Ellen are taking a systems view of this challenge (see Figure 1.) and will be tackling workers’ and employers’ mindsets and skillsets while reimagining the employer-worker relationship.

  

  Figure 1 – Theory of change for creating a more inclusive economy. Courtesy of Work for Humanity.

  Where are the workers?

  While millions of people are seeking better jobs, business leaders are sounding alarms. Among the many articles and studies on “The Great Resignation” was a recent Deloitte report that noted talent supply is a major concern for business leaders today. From the report: “seven in 10 employers globally [say] they are struggling to find workers with the right mix of technical skills and human capabilities.”

  Yes, there is a mismatch between the demand and supply of various skills and capabilities, and a need to better align our education system with the needs of the job market. At the same time, when I hear business leaders complain of a “talent shortage,” one of my first responses is “really?” Are you sure it’s a shortage of talent? Could it be a wage issue? Are you a “high road” employer that treats employees with dignity? Do they have agency, flexibility, and opportunity to develop the skills and capabilities you value? Have you helped them see how their work connects to the broader goals and mission of your organizations? Are you even looking in the right places to find them?

  Today’s recruiting practices and related technology solutions filter out a lot of potential talent.  These “hidden workers” are eager for jobs but haven’t found a way to overcome challenges including skills and capabilities they have that don’t match the precise language of the automated filtering/ranking process, educational degrees that are part of standard job descriptions but often not required to perform the work, caregiving duties, and language barriers.

  But leading companies are forging new programs to uncover missed talent pools, close skill gaps, and improve diversity. That’s the conclusion of a new report, Hidden workers: Untapped talent, co-authored by IRC4HR board member Eva Sage-Gavin of Accenture. The authors explore how companies can benefit from often-overlooked talent such as veterans, the previously incarcerated, and people with disabilities.

  Organizations across the economy are moving in this direction, and they are reporting an attractive return on their investment. From the study: companies that purposely hire hidden workers “report being 36% less likely to face talent and skills shortages compared to companies that do not hire hidden workers. And they indicate former hidden workers outperform their peers materially on six key evaluative criteria—attitude and work ethic, productivity, quality of work, engagement, attendance, and innovation.”

  A new view of employees

  Corporate programs to expand opportunities for historically marginalized groups are encouraging elements of the reinvention of workplaces that is under way.

  These initiatives also signal to me that a subtle shift in the balance of power is taking place in this moment. For decades, we have seen the position of workers weakened in the workplace. But employees are finding their voice and recognizing the clout they can have through joint efforts.

  It’s encouraging to see high tech workers banding together to raise concerns, ranging from pay to workplace harassment. Collective employee efforts at icons Google and Apple are a sign that employers may want to adopt a suggestion from USC professor John Boudreau. He argues organizations ought to view employees today akin to the way they now view customers—not just as buyers but as collaborators and recipients of great service.

  “The goal is to better understand the evolving needs and desires of workers, rather than how to dictate the terms of employment or other work relationships,” Boudreau wrote on LinkedIn recently. “It is helpful to ‘Retool’ this HR issue, by using the analogy of customer relationships, but reframed with work as a ‘product’ and the worker as the ‘customer.’”

  Government action also is part of the Great Workplace Reinvention.  Georgetown University professor Harry Holzer calls for a variety of government interventions to increase both worker power and employee skills in a recent essay in The Hill. His suggestions range from taxing worker displacement and subsidizing retraining to giving tax breaks and technical assistance to companies with “high road” practices such as higher wages and generous benefits.

  Already, we’re seeing elected officials play a more assertive role in reshaping the social contract around work. The extended, increased unemployment benefits during the pandemic were one major example. And proposed legislation could more permanently alter the employment landscape. The push to increase the national minimum wage to $15 per hour is one such measure. Although some business groups warn it will cost jobs, others view it as having the potential to dramatically reduce racial and gender inequity.

  Meanwhile, the bipartisan $1 trillion infrastructure bill working its way through Congress would signal government willingness to put Americans to work on a scale not seen since perhaps the New Deal public works projects.

  Investors weigh in on the workplace

  It’s not just elected officials, employers, and employees who are reinventing workplaces today. Investors increasingly are weighing in on the matter. Thanks in part to a 2020 U.S. Securities and Exchange Commission requirement that publicly traded companies disclose information on human capital, the investment community has been putting a spotlight on matters including the development, safety, engagement, diversity, and retention of employees.

  The treatment and welfare of employees is part of a wider movement on the part of investors to look at companies’ environmental, social, and governance metrics. Two years ago, this ESG emphasis, along with societal pressures for companies to be better corporate citizens, led the Business Roundtable to abandon the shareholder-primacy mindset in favor of a “stakeholder” model.

  There’s a debate today  over whether that shift was just lip service, and whether the ESG field is a “dangerous placebo” that obscures the damage capitalism is doing. Count me among those who see value in stakeholder capitalism, ESG metrics, and increasing human capital disclosures.

  In particular, I agree with a recent Fortune essay by Martin Whittaker and Peter Georgescu of JUST Capital, a non-profit firm that conducts research and rankings to help companies measure and improve their performance in the stakeholder economy. Whittaker and Georgescu wrote that stakeholder capitalism “represents a more evolved form of capitalism that creates good jobs and empowers workers; that provides for upward economic mobility and equality of opportunity for all; that builds healthy, prosperous communities and safeguards our planet; and that supports profitable businesses, integrity of leadership, and long-term investor returns.”

  From reinvention to movement?

  So, the Great Workplace Reinvention is under way. And it seems promising. But how can we accelerate it? What will it take for each of the stakeholder groups to recognize they are parts of wider systems? For organizations to move away from zero-sum thinking and “ego-system” leadership to an “eco-system” mindset?

  I believe it will take a movement. Stay tuned—I’ll share more about this in my next blog.

  Jodi Starkman is Executive Director of the Innovation Resource Center for Human Resources.

• 24th August 2021 Comment on thisLet’s choose a “good jobs” future of work

  We can use the crises of the past eighteen months to reform and upgrade a capitalist system that has let too many workers down.

  A close relative of mine is a young man who regularly rails against capitalism.

  He has a point.

  After all, for all the good our U.S. economic system of free enterprise has done, it also has produced growing economic inequality, reinforced racial disparities, and led to financial insecurity for millions.

  These deep flaws in our economy were exposed and exacerbated over the past year and a half.

  I heard an earful from my relative as the COVID pandemic took the greatest toll on the physical and financial wellbeing of the poorest Americans and the killing of George Floyd underscored how people of color have long experienced discrimination in the workplace and beyond. Amid all the injustice, many companies raked in record profits, he noted.

  Still, I push back in my conversations with my younger relative.

  I believe capitalism can be reformed. I believe we can use the crises of the past eighteen months to modify and upgrade an economic system that has let too many workers down. We have an opportunity to choose a future of work that is defined by “good jobs,” where organizations and people both thrive.

  Actually, it’s not merely an opportunity – it’s an imperative. For one thing, my relative isn’t alone. Young people in general are skeptical of capitalism, with roughly half having a favorable impression of socialism. What’s more, if we fail to change course, we face a future of extreme inequity and wasted human potential.

  Let’s create the future of work

  So, what’s the alternative?

  Researchers – some of them sponsored by my organization – and forward-looking organizations have given us a clear picture of positive options.

  In fact, it’s important for us to begin by recognizing we do have options. We have the power to craft the future of our organizations. “The road ahead isn’t a problem to solve; it’s an invitation to create,” says Jen Gresham, a scientist and entrepreneur who has gathered experts to imagine what “Work for Humanity” could look like. Jen adds: “Building a future of work that serves us under these challenging conditions will require nearly everyone’s contribution.” And it starts with the question, “what do we want the future of work to be?”

  Thanks to Jen and many others in the field, a consensus is emerging that good jobs today, and in the years ahead, require several things. These include fair pay, opportunities for individual development, purposeful work, a sense of belonging, and a deep feeling of dignity. Jen’s current work is focused on helping small businesses create good jobs by addressing workers’ and employers’ mindsets and skillsets, and reimagining the employer/worker relationship.

  MIT professor Zeynep Ton and her colleagues at the Good Jobs Institute have found that decent work meets “Basic Needs” such as physical safety and financial security as well as “Higher Needs” such as belonging, recognition, achievement, and personal growth.

  Healthy, trusting relationships at work also are vital. Researchers Rob Cross and Jean Singer studied 100 men and women in 10 organizations and found that people’s connections with others underpins well-being in areas including physical health and resilience.

  A voice in decisions at work is another characteristic of good jobs and great workplaces. Millennials and Gen Z employees, who were educated in interactive, participatory ways, all but expect to have a say in their organizations. And they are speaking up to demand their organizations align with their values on matters including social justice and environmental sustainability.

  The good news is that good jobs aren’t just good for employees. They are good for employers as well. MIT’s Ton, researchers at consulting firm Great Place to Work, and others have found that high-trust cultures with good jobs lead to better business results. The old adage is true: happy workers make for happy customers.

  Better job design, a positive voice in public policy

  To be sure, there are challenges ahead. As automation continues to transform work – and eliminates some jobs – we need to reimagine and redesign work to be human-centered, so people can continue to add value and find value in what they do. This means a much more robust approach to retraining and continuing education – within organizations and through institutions such as community colleges and online academies.

  It also means we need to recognize that just as we have the power to craft the future of our organizations, we have a choice to make about how technology is deployed by our organizations. Those choices are heavily influenced by public policy we all have a role in influencing. For example, if tax policy favors investments in capital rather than labor, we can change that.

  Public policy also is essential for tackling thorny questions of wealth disparities, social justice, education, job creation, and decisions about the balance of investments in capital and labor. Organizations alone can’t fix such issues. But companies can play a constructive role in societal questions touching on work.

  A good example is the CEO Action for Racial Equity effort. Spearheaded in large part by professional services giant PwC and its top executive Tim Ryan, the group is focused on advancing and advocating “public policies that will root out and end systemic racism.”

  More generally, companies can help convene an overdue, all-stakeholders conversation about the future of jobs and the economy. Corporate leaders can use the recent crises as a catalyst for updating and improving the social contract. Along these lines, authors Thomas A. Kochan and Lee Dyer call for a renewed collective agreement in their 2020 book, Shaping the Future of Work: A Handbook for Action and a New Social Contract.

  “What are the mutual expectations and obligations that workers, employers, and their communities and societies have regarding work and employment relationships?” they write.

  I believe employees in particular need to have a stronger voice in the discussion. But it will take the collective effort of all the major stakeholder groups – employers, workers, consumers, investors, and public policy-makers – to create a better future; one in which multiple interests, goals, and expectations are realized.

  The time is now

  Even if the work ahead on work is challenging, business leaders have little choice but to roll up their sleeves. A widespread rejection of the status quo is already under way. It’s been dubbed “The Great Resignation.” People aren’t walking away from work. But significant numbers are leaving their jobs as they reflect on what’s most important to them and assess if (and how well) their values align with their work and the organizations that employ them. They are seeking increased flexibility, more dignity, better pay, opportunities to grow, and greater happiness. In short, they are seeking “good jobs.”

  To my relative, it’s a sign we need to replace capitalism.

  To me, it’s a call to reform it. Perhaps we should rename this time “The Great Reassessment.” Let’s build a more inclusive economy where people are eager to apply to good jobs everywhere, and where organizations of all shapes and sizes are creating them.

  Jodi Starkman is Executive Director of the Innovation Resource Center for Human Resources.

• 4th August 2021 Comment on thisA better future from an instructive past

  

  IRC4HR has much to offer when it comes to tapping teachings from the past century and engaging organizations in the pressing issues of today.

  As we emerge from the crises of the past eighteen months, history has lessons for us — offering insights into how to use trying times to transform companies into places that are more adaptable, effective, and human-centered when it comes to creating economic and social value.

  My organization has much to offer when it comes to tapping teachings from the past century and pointing to wise ways forward. Decades ago, the Innovation Resource Center for Human Resources (IRC4HR) proposed a stakeholder model of business and is currently funding research projects that promise to shape how we work and live now and into the future.

  Our legacy inspires our ongoing work, pointing to a central theme: organizations have an opportunity and an obligation to address the pressing issues of the day.

  Balancing Worker Safety and Business Productivity

  Today, we’re starting to put the COVID-19 pandemic behind us and return to various kinds of work locations, at least in the United States. But debate about how to protect workers and balance safety needs against business productivity continue. These conversations began last spring as a number of organizations allegedly put profits ahead of the health of employees. The meatpacking industry was at the center of these concerns—with roughly 250 workers having died from COVID.

  These deaths are reminiscent of the labor dispute that gave rise to IRC4HR. A coal miners’ strike in Colorado during 1913-1914 culminated in a battle between state militia and strikers, resulting in the strikers’ tent colony being burned to the ground and the death of a dozen women and children. Commonly known as the Ludlow Massacre, it led to widespread condemnation of the Rockefeller family—the primary shareholder of one of the three main companies involved in the strike.

  That experience led to a change of heart for John D. Rockefeller Jr. Having been blasted for autocratic management and inhumane working conditions, the industrial titan became a lifelong advocate for more effective and harmonious employment relations.

  

  John D. Rockefeller Jr., founder of IRC (now IRC4HR)

  “The soundest industrial policy is that which has constantly in mind the welfare of the employees as well as the making of profits and, which, when human considerations demand it, subordinates profits to welfare,” Rockefeller said, 100 years ago. “Industrial relations are essentially human relations.”

  In 1926, Rockefeller established Industrial Relations Counselors, Inc. (IRC) — the forerunner of IRC4HR. It had a mission to advance the knowledge and practice of human relationships in the workplace.

  Today, there’s a call to business leaders, much like the one heard by Rockefeller. That contemporary call is to turn tragedy and newfound appreciation for the contributions of “essential” workers like food service employees, nurses, and delivery drivers into a better “employment deal” – one in which we value all workers, and we make decisions about work more human-centered, even as we apply technology and automation to the design of work.

  During the past 18 months, many companies recognized employees as people as never before. Along with the challenges of COVID and the rapid pivot to remote work arrangements, we suddenly saw into the homes and family lives of co-workers. Leaders grew more sensitive to the range of challenges their employees faced – from grief to anxiety to caregiving burdens – while more workers felt empowered to request the kinds of accommodations that previously might have been rejected or stigmatizing.

  “Wellbeing” has become a corporate watchword—a welcome focus on employees’ holistic needs that promises to enhance business performance even as it offers a better life for people.

  “The soundest industrial policy is that which has constantly in mind the welfare of the employees as well as the making of profits and, which, when human considerations demand it, subordinates profits to welfare. Industrial relations are essentially human relations.” –John D. Rockefeller Jr.

  Forward-Thinking Research, Practical Applications

  Skeptical readers might write off Rockefeller’s words above and the IRC mission as empty rhetoric. But over the past century, the organization and its members have been at the forefront of ideas that challenged conventional business wisdom.

  For example, IRC’s first consulting report for the Ohio Oil Company, in 1926, reveals many themes that are still gaining traction today. These include the importance of the workforce to organizational effectiveness and competitive advantage, as well as adoption of what is now known as a “stakeholder” view of the employment relationship. That is, effective management acknowledges the interests of employees, suppliers, the community, and shareholders.

  Regarding this last point, it was only in 2019 that the Business Roundtable came back around to a similar declaration as this group of leading executives formally moved away from “shareholder primacy” and made a “commitment to all stakeholders.”

  Or consider the way that IRC researchers joined public discussions during the Great Depression about how to protect the dignity of all Americans during hard times and old age. IRC’s Bryce Stewart and Murray Latimer contributed to the formation of the U.S. Social Security and unemployment compensation systems. These programs helped undergird economic expansion and shared prosperity in America for much of the latter 20th century.

  Those early IRC researchers paved the way for business leaders today to get off the sidelines and help solve pressing economic and social problems, including threats to public health, financial stability, and civil rights. Given the intense polarization and gridlock that have gripped United States politics in recent years, one can argue that business leaders have an even larger role to play in tackling societal challenges – and their workforces are looking to them to do that.

  During the past year (and prior) there have been multiple examples of forward-thinking, socially minded companies stepping up along these lines. For instance, CHROs from Accenture, Lincoln Financial, Verizon, and Procore created a platform connecting displaced workers and available jobs at more than 280 companies from 94 countries to get people back to work amid the pandemic.

  During the pandemic, leaders have grown more sensitive to the range of challenges their employees faced – from grief to anxiety to caregiving burdens – while more workers felt empowered to request the kinds of accommodations that previously might have been rejected or stigmatizing.

  And, while progress has been slow, many companies made pledges to address racial justice and equity issues in their organizations and communities following last summer’s reckoning with racial injustice. Both commitments and actions are being tracked by JUST Capital in its Corporate Racial Equity Tracker.

  On the topic of racial justice, IRC put a stake in the ground on this issue back in the 1950s. Following a two-year study funded by the Ford Foundation and the National Urban League, IRC’s 1959 publication “Employing the Negro in American Industry,” became a guide to management as it sought to establish nondiscriminatory employment practices in the 1960s. Although the report used a now outdated term, its message was a forward-looking one of better business results and a more harmonious society when companies actively championed equal opportunity.

  A Systems View of Business Challenges and Opportunities

  Today, our organization is continuing the research and advocacy legacy of IRC. Renamed IRC4HR (Innovation Resource Center for Human Resources) in 2015 to convey our focus on innovation and applied research, we sponsor a variety of studies and events designed to advance the mutually beneficial interests of organizations, workers, and society. IRC4HR grantees produce practical, actionable insights in the form of white papers, tools, and other learning materials to help organizations, leaders, and workers succeed together through the profound business and social challenges of the 21st-century workplace.

  Among the topics we explore today are the impact of automation on the workplace, the digital transformation of work and organization models, the role of social networks and relationships on workforce performance and wellbeing, and the design of more inclusive workplaces.

  Some recent research and events funded by IRC4HR include:

  • Organizing for Business Ecosystem Leadership.
  • How the Most Successful Leaders Drive Team Agility and Collaboration
  • Work for Humanity
  • Work for Tomorrow: Innovating for an Aging Workforce
  • Inclusion by Design

  A common thread among IRC4HR’s research areas today is a systems view of business challenges and opportunities. We have learned over the past 100 years that a narrow view of complex, interrelated problems doesn’t lead to sustainable solutions. The events of the past eighteen months have reinforced those lessons.

  We no longer can afford to see ourselves and our organizations as discrete entities, operating in a vacuum. We must recognize that we’re all connected. We must recognize that, as Rockefeller put it, human welfare cannot take a back seat to profits.

  As we move through today’s challenges, let’s build a future where human relationships are at the center of work, and work works for all.

  Jodi Starkman is Executive Director of the Innovation Resource Center for Human Resources.

• 13th November 2019 Comment on thisAligning business practices with the things Americans care about most

  Following the Business Roundtable’s August 2019 statement redefining the purpose of the corporation, IRC4HR^® has wondered what a return to stakeholder capitalism means and will look like for business organizations that subscribe to a stakeholder-driven model. We are therefore excited to read and share the results of JUST Capital’s 2019 Roadmap for Stakeholder Capitalism Report and Survey, released in October 2019. The report investigates current levels of trust towards U.S. companies at large, and highlights issues that the American public wants companies to prioritize to create an economy that works for all Americans.

  While almost 95% of respondents agree that “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity,” only 45% believe that corporations are actually walking the talk in promoting an economy that serves all people. Further, 60% felt that companies still prioritized the needs of their shareholders above all employees and customers.

  A key takeaway from the report is that across nearly all reported demographics – liberal, conservative, high-income, low-income, men, women, millennials, and boomers – respondents ranked worker-related issues of pay, benefits, and treatment as the highest priority for just business practices. Martin Whittaker, CEO of JUST Capital, summarizes the top priorities further in Fast Company, sharing,

  Four of the top five issues people want corporate America to commit to include: paying a fair wage; paying a living wage; providing good benefits and work-life balance; and providing a diverse workplace with equal opportunity and pay equity.

  The full report offers more insights and ideas for corporate leadership and researchers.

  On November 12, JUST Capital released its rankings of America’s 100 Most JUST Companies for 2020, which measures how the U.S.’s largest publicly traded companies perform in relation to issues affecting workers, customers, communities, the environment, and shareholders. And on November 13, JUST Capital hosted its first Quarterly JUST Call, which provides a platform for CEOs to speak with the investment community about how they are creating value for all of their stakeholders, over the long term.

  Roadmap for Stakeholder Capitalism Report and Survey

• 25th May 2017 Comment on thisIRC4HR Joins the MIT Initiative on the Digital Economy (IDE)

  Innovation Resource Center for Human Resources (IRC4HR) is proud to announce its corporate membership in the MIT Initiative on the Digital Economy (IDE), a visionary, internationally recognized group of thought leaders and researchers examining the impact of digital technologies on business, the economy, and society. (more…)