Achieving Equitable Impact by Investing in Your People

Let’s go back to the digital imaging company, Doc-Scan, I introduced in Chapter 2. You may remember, I had walked them through a series of recommendations using the Good Business Worksheet framework, and suggested that they implement more environmentally focused business strategies as a way to distinguish themselves among their competitors and access new market share.

They did not go for it. They saw an environmental focus as outside their Equitable Impact Venn Diagram. Sometimes a recommendation that makes sense on paper just does not fit well with a company’s sense of shared identity. Doc-Scan did not see itself as an environmental company and did not want to go in that direction. It wasn’t that they hated the environment and spent the company retreat burning huge bonfires of paper—it just ran against who they thought they were, and they did not feel like they had the tools or resources to make that shift within their core business operations. This testing of the recommendations is an important part of the process, because if the equitable impact strategies do not seem authentic to the company, they will definitely not seem authentic to customers.

Because we walked through all three components of the Good Business Worksheet—how you make your money, how you spend your money, and how you invest in your people—shifting to an environmental business model wasn’t the only recommendation I made to help their company do well BY doing good.

I also reviewed their HR policies and employee benefits packages and identified a few opportunity areas where they could treat their employees a little bit better and also save some money in the long run. Doc-Scan relied on a mostly low-skill workforce to do the manual labor involved in the document scanning process. They offered good jobs to their employees, but the nature of the job created high turnover rates and sometimes unreliable employees. Turnover is a standard challenge in Doc-Scan’s industry and similar industries, and creates a lot of excess expense for the company. A more reliable workforce would save them money.

We identified this challenge in our conversations, and I suggested an opportunity to consider was how they could invest more resources in their workforce in a way that could produce long-term benefits. Intrigued, Doc-Scan’s leadership and I began to work on strategies that would help increase retention while also helping improve the lives of their employees—things like on-the-job education, pathways to promotion, and management training. As I’m writing this, Doc-Scan has reported some preliminary positive results from these changes, with employees who participated in the training receiving promotions, which led to increased retention.

The Doc-Scan strategy illustrates the potential of the third and final component of the Good Business Worksheet: Part 3. Improving how you treat your people can help improve your bottom line. For some companies, it is obvious that employees are the core resource of any company, and investing in them is no different than investing in any other revenue-generating resource. But some companies don’t necessarily see it that way, or haven’t fully understood what it takes to invest in people in a way that produces benefits for their workforce and bottom line.

Some companies also distinguish (explicitly or not) between low-wage, entry-level employees and higher-paid salaried roles. They see the low-wage workers as interchangeable expenses, whereas they see the higher-paid salaried workers as assets and invest heavily in their success and growth. This chapter will show you that investing in all your people as the assets they are can lead to equitable value creation.

By “investing in your people” I don’t mean just your employees. You also have to think about potential employees and talent that you haven’t accessed yet. As I discussed in Chapter 3, doing well BY doing good requires your company to be a good neighbor. As a good neighbor, you should think about how the economic engine of your company is supporting the growth of your community. One easy way to do that is to hire people from that community.

In this chapter, I will walk you through the third component of the Good Business Worksheet. Some of the recommendations may seem obvious if your company has a robust company culture that aligns with strong company values. I won’t go too deep into the business case for why a good corporate culture that values people leads to a company’s success, as there are so many great thinkers and writers focusing on this topic. (Not sure I can top Peter Drucker’s famous maxim, “Culture eats strategy for breakfast.”) Instead, I will focus on how treating your employees differently (and better) can support the growth of your business while also having an equitable impact in their lives and the lives of their communities.

Even though this is the last section of the worksheet, do not think of it as the last step. As we saw, how Doc-Scan invested in its people was actually their entry point into the concept of doing well BY doing good. For many readers, this chapter may resonate more than the others. To fully reap the benefits of doing well BY doing good, your company must analyze all its practices with an eye toward equitable impact. Truly making equitable impact your main course throughout all your operations will inspire a greater trust from your customers, increase brand loyalty, and help you expand your business. You cannot have this thorough approach to equitable impact by picking and choosing only what you want to focus on and ignoring what you don’t care about.

BUSINESS CASE: HOW YOU INVEST IN YOUR PEOPLE

There is a pretty straightforward and obvious business case for investing in your people—it saves you money in the long run. You do not want your employees to leave your company and have to replace them because that will cost you money—potentially a lot of money. Depending on the type of worker, the cost for hiring and replacing an employee could range from thousands to hundreds of thousands of dollars. For hourly workers, hiring a new employee could cost around $1,500. For a technical job, it could be one to one and a half times the annual salary. For C-suite executives, the total cost could be over twice the annual salary, or more.¹ This is not just the direct cost of hiring an employee (i.e., the cost of advertising or a recruiter’s fee), but also things like the cost of lost productivity and training a new hire.²

These hiring costs are high, and if you are running a small- to medium-sized business, they could be a huge drag on your operation. But you can do something to reduce these costs: in a survey of 34,000 employees, the Work Institute found that 75 percent of the causes of employee turnover were preventable.³

The turnover problem—which by some estimates costs the entire US economy $1 trillion a year⁴—is really a problem of employee engagement. The best thing you can do to reduce your turnover and retention costs is to make sure your employees are happy and engaged. Gallup did research that showed only 15 percent of employees around the world feel engaged in their work, and around half are looking for new jobs.⁵ This trend is more acute for the millennial generation. In a different study, Gallup found that 60 percent of millennials are open to a new job and their generation is the most likely to switch jobs.⁶ The Great Resignation and the tightening labor market has only accelerated trends that were already underway.

Employers can increase engagement and employee satisfaction in many ways, but the big ones are compensation and benefits. Thirty percent of employees say that they switch jobs because of pay, and around 40 percent say that good benefits and paid time off are a motivator for staying at a job for more than five years.⁷ Work culture is also super important: a 2018 LinkedIn study found around half of employees want to work for a company with flexibility and work-life balance, as well as one that has a welcoming culture.⁸ The premium placed on flexibility has only increased during the pandemic, with a 2021 study finding that around two-thirds of employees prefer to work from home rather than the office, and 85 percent prefer jobs with remote work options and the flexibility that offers.⁹

Companies tend to not think of their social impact initiatives as an opportunity for employee engagement, but it has the potential to become one of the biggest leverage points for increasing retention and employee happiness.¹⁰ The LinkedIn study found around half of employees want to work for a company that has a positive impact on society.¹¹ Over half of employees say that having a job where they can make an impact is important to their happiness, and those who feel that they are making a social impact through their job are twice as likely to be satisfied with their employer than those who are not.¹² These numbers hold up, too, when you look at the specifics of what makes people feel that their work is having an impact: if they’ve worked on a specific social impact product, contributed to a social responsibility campaign, or volunteered at work through a community partnership.¹³

Not surprisingly, these trends are starker for millennials, and, as they age into being the majority of the workforce, social impact will become an even more critical tool for employee engagement. Deloitte found that millennials who frequently participate in workplace volunteer activities were twice as likely to be satisfied with the progression of their careers.¹⁴ Net Impact—a membership group of social impact professionals—found that over half of students were willing to take a pay cut to work for a company that had similar values to theirs, and 45 percent were willing to take a pay cut for a job that made a social and environmental impact.¹⁵ This was a survey of students about to enter the workforce, which means that as younger professionals join the workforce, the pressure felt by companies from their employees to align more with social impact will continue to grow.

This should be evidence enough to make you consider how you are treating your people in order to increase retention (I’m sure your company has already made trade-offs between offering a strong compensation and benefits package to attract and keep good employees with the cost of doing so). One area many businesses don’t pay much attention to is the other component of who makes up “your people,” by which I mean not just your employees, but the broad pool of potential employees.

If you expand your notion of who could be a potential employee, you’ll be surprised at the benefits to your company. For example, anyone with a criminal record is usually automatically removed from a hiring search, but actively recruiting from this population and supporting them in their employment can be a win-win for them and your company. People who have been involved with the justice system, who have been homeless, or who have been struggling with addiction all face challenges getting a job and staying employed. People returning from prison are five times more likely to be unemployed,¹⁶ which leads to a greater chance of returning to prison. By some estimates, the cost of just one former prisoner going back to prison can be as much as $150,000.¹⁷ Employing them can help save society money, give someone who needs it a good job, and create dedicated employees for your company.

Greyston Bakery, for example, which produces brownies for consumers as well as for companies like Whole Foods and Ben & Jerry’s, has what they call an “open hiring” policy. They do not ask for résumés or do background checks. While this may seem radical, it’s worked for them: they have a 12 percent turnover rate, compared to 30–70 percent in similar industries.¹⁸

Dave’s Killer Bread, the bread manufacturer, also works explicitly to hire justice-involved individuals. Around a third of their team members have a felony conviction. The company has had so much success with their program that they started what they call the Second Chance Employment playbook for other companies to use. So far, over 1,000 other companies have benefited from their lessons in working with this population.¹⁹

Your average person would not consider justice-involved individuals or those who are unhoused to be model employees, but that’s just an assumption and prejudice we hold, not a fact. Reconsidering who your people are and how you treat them can help increase the engagement of your workforce and save you money on turnover and retention.

In my experience, the best way to improve how you invest in your people is to look at your company values and see how they align with your corporate practices and operations.

FIRST STEP: CONSIDER YOUR VALUES ALIGNMENT

Companies most often work to create a strong corporate culture by defining it through a series of “core” or “company” values. Your company probably has a list of these; they’re probably similar to those at other places you’ve worked: Excellence. Respect. Boldness. Trust. Fun. Sound familiar? These trends in corporate values makes sense because most people want similar things. We want to work in a place where we feel respected. We want our customers taken care of, we want to do good work, and we want our company to prosper.

But values can be static and generic. In the effort to boil them down to universal truths, values are often universally useless. Many leaders and businesses try to create a list of values to impose upon the company, instead of creating a company with those values woven into the fibers of the business. They take the same approach to people: hire folks who have the skills they need and then try to instill the values in them once they are on board rather than hiring people who, themselves, embody the values.

It is so important that values remain a dynamic element in your company. Without continually looking at your values, you risk them becoming meaningless. I’ve talked a lot in this book about aligning your values with your customers, but you also need to consider how your values align with your employees. How are you living those values in your internal culture?

In Chapter 3, I asked you to make a mindset shift around your spending habits and think about how you can be a good neighbor in your community. In this chapter, I’m going to ask for another mindset shift: to consider whether you treat your people like a commodity or like an asset. You frequently hear discussion of “human capital” in the same way people discuss “physical capital,” but your employees are living, breathing individuals that are not interchangeable like factory equipment. In many ways factory equipment is treated better than employees in the way they are treated on a company’s financial statements. Equipment is classified as an asset on the balance sheet, which incentivizes long-term investment. Meanwhile, employees are treated as expenses on the income statement, which encourages divestment away from human capital.

You’re probably reading this and thinking, of course, I treat my employees like the special, unique individuals they are. And you probably do, or at least think you do. But, if you want to truly do well BY doing good, you have to think about how you are living your values every day, and what you can improve. How do you create a company culture and a dynamic set of values that invests in your people as the assets they are?

Our values were actually one of the first things I had in place before I started my company. I wanted a vision for the kind of company we were, and how we wanted to treat our employees, and then built a business around that. These values were based on the belief that everyone, no matter who you are or what your circumstances, wants to Live.Learn.Grow.™ Our goal as business owners is to cultivate an environment for employees to live fully, learn constantly, and grow into their potential. This is the kind of dynamic culture that creates a successful business.

From the Live.Learn.Grow. culture I was able to develop what I call the Values Snowball™ (see Figure 4.1), which illustrates an explicit connection between values and purpose that reinforces the Why of our organization, which inevitably influences How we do the What.

FIGURE 4.1 The Values Snowball demonstrates the impact a business can have on the world.

As I developed the Values Snowball to ground my company’s values, a few things were critical to me; my values must be:

•   Action-oriented

•   Relevant—regardless of tenure or stage in the organization

•   Dynamic—they grow, change, and develop with individuals

•   Holistic—they apply personally and professionally

This led to the company values depicted in the snowball:

•   Live authentically

•   Be resourceful

•   Deliver quality

•   Exude passion

•   Create transformational experiences

•   Build and sustain community

Companies are beginning to understand the mindset shift of investing in a strong growth culture for employees; this was especially true after the COVID-19 pandemic upended the labor supply. Companies like Starbucks, Target, Walmart, and Amazon began or increased tuition reimbursements for employees. Investing in employees’ growth and learning helps secure their workforce and creates a better, values-aligned culture that supports the long-term health of their company.

As we saw in Chapter 3, making decisions that conflict with your stated company values can hurt your credibility with customers and decrease their trust in you. If you have a stated company value of “respect” but your managers are disrespectful to their subordinates, that is going to cause you problems. Customers won’t want to support that, and employees are going to leave, leading to higher turnover and increased costs.

In the rest of this chapter, I will walk you through how to ensure that you are actually living your company values, not just talking about them at the occasional corporate retreat. Even a company with a strong corporate culture and happy employees can identify changes they should make in their internal practices to help them do well BY doing good more effectively. That’s an important element of the Live.Learn.Grow. culture—there’s always an opportunity to do more to support your people and increase your impact.

WHERE TO MAKE AN IMPACT BY INVESTING IN YOUR PEOPLE

There are a few areas of impact to consider when thinking about how to better live your values and align your corporate culture with what kind of company you want to be:

Recruitment

The introduction to your company culture begins with your hiring process. Where do you look for new employees and strong talent? What does your recruitment process look like from start to finish? What is the experience for potential employees, whether they are hired or not? Oftentimes, people look to hire people who look and act like them.²⁰ In addition to excluding a broad group of people from becoming part of your company, it has implications for your productivity—diverse teams are usually better performing teams.²¹ Confronting biases in your hiring process can help you make changes and become more inclusive and benefit from all the talent that’s out there.

Training and Promotion

Once your people are in the door and working for you, are you investing in their growth and education? We all know the phrase “dead-end job,” and there’s nothing worse for morale than an employee who feels stuck with nowhere to go. Offering a growth path to taking on more responsibilities and more senior roles can do wonders for your company culture. If you aren’t large enough to have enough jobs for a robust promotion strategy, you can still give employees professional development and help them create a career path, whether inside your company or not. Making these investments is particularly important if you have started to broaden your talent pool like Greyston or Dave’s Killer Bread, and are working with people who may not have had a lot of formal employment experience. Giving these employees the training and support they need is a critical component of supporting their success and the success of your business.

On-the-job training or formal apprenticeships are a great way to build the talent of your team and think differently about who can and should be working with you. Often this kind of training has no out-of-pocket expense and can be a good opportunity to encourage your staff to take on formal leadership and management roles.

Compensation

Compensation is an obvious area of impact for how you invest in your employees—the more you pay them, the happier they are! Who doesn’t like to make more money? While generally true, in actuality, the amount of compensation sometimes is not as important as the relative compensation between people. (This assumes, of course, that you are paying your employees enough for them to make a decent living, as well as an amount that’s competitive for your industry.) If you are paying two different people different amounts of money for the same job, you need to make some changes quickly. I am sure you have read many exposés about companies who were paying men more than women for the same job, or people of color less than white people. You don’t want anyone to write these stories about you.

Diversity, Equity, and Inclusion

When you look at your staff, what do you see? Do you see similar faces, or do you see a lot of different types of people all committed to making your business the best it can be? As I said when discussing the impact of recruitment, people tend to hire people who look like them. Making a commitment to diversity can not only open you up to new talent pools, but to people with different types of experiences that reinforce and strengthen your team. As demographics shift and the consumer market becomes more diverse, you want a diverse staff that reflects your customers. Creating a plan to diversify your talent pool can include things like using a recruiting firm that specializes in diverse recruitment, or working directly with alternative job training programs like Year Up.

The flip side of recruiting a diverse staff is creating a more inclusive company culture. Oftentimes when a traditionally white organization or team begins to implement diversity strategies, new members can feel excluded or not listened to. Intentionally building out an inclusive culture can help diverse teams thrive. There are many established strategies for increasing diversity, equity, and inclusion (DEI), and there are many trained consultants you can bring in to help you create and maintain a welcoming culture.

Creating this welcoming culture is becoming increasingly important. Companies have made a lot of progress in addressing racism at work, but there are still issues. According to an Edelman survey, more than half of employees—45 percent of white people, 64 percent of black people, 68 percent of Latino people, and 58 percent of Asian people—say that racism has harmed their employer relationship. In 2021, the lack of an inclusive culture was the biggest concern among employees, beating out lack of diversity as a top concern.²²

Increasing diversity and demand for inclusivity leads to challenges that companies struggle to overcome: 64 percent of organizations say building diverse and inclusive teams is a primary concern, but only a third are intentionally creating inclusive and diverse teams, and a little under half are supporting their leaders to create inclusive cultures.²³ The increased demand for remote work can lead to benefits and challenges around creating an inclusive work culture: it can create flexibility and help your company recruit beyond your typical employee profile, but can also lead to a “proximity bias” in which those who put in more face time in the office are rewarded, either subtlely or explicitly. Intentionally building in structures to help counteract this bias can ensure all employees are fully integrated into the company culture and operations.²⁴

Benefits

Like compensation, benefits are an important component of investing in your people and creating an engaging and sustaining corporate culture. A strong benefits package will attract top talent and help keep them working for you.

Of course, a strong benefits package can be expensive. There are always trade-offs when considering the size and type of compensation package you provide. Depending on your company values and culture, you can offer different or innovative types of benefits that may not cost much out of pocket: days off for volunteering, for example, or discounts on health classes, financial literacy courses, or other educational resources. The flexibility to work from home is an increasingly valuable benefit in a post-pandemic world and won’t cost your company much, if anything.

Interestingly, but maybe not surprisingly, this area of impact intersects with choices you make in the “compensation” area. You can save money on your compensation and benefits package, if you offer more flexibility as a benefit. Around 60 percent of workers would be willing to take a pay cut for a remote work option, and 70 percent would give up other benefits like health insurance or paid time off for flexibility around coming into the office.²⁵

And there are other benefits you can offer employees that can improve their quality of life and create equitable impact:

•   You could partner with a service provider to improve the financial health of your employees. Companies like SmartPath work with companies to offer their employees a “financial coach” to help them better understand their spending and saving habits, and create more financial security for themselves and their families.

•   You could set up an Income Advance program, which offers employees small ($1,000–$2,000) same-day loans that are paid back at their next paycheck. This can be a huge help to employees who experience a financial emergency and create more financial flexibility. (This is a great improvement over what are known as “payday” loans, where money is lent at a high rate of interest, with the idea that the loan would be paid back on the next payday.)

Rhino Foods, a manufacturer of specialty desserts, in partnership with B Lab, created the “Income Advance Guide” to help other companies implement the program. They saw the benefits to their employees and wanted to encourage others to adopt the practices.²⁶

Innovative services like SmartPath and Income Advance have obvious benefits for entry-level and frontline employees, who may be lower-income and struggling to make ends meet. But, they also benefit all types of employees regardless of their income level. You never know who will benefit from these kinds of products. As you think about your values, consider what innovative options may be out there to help you meet those values. If you think of your company like a family, and families look out for each other, you may want to create some kind of loan services for employees in need. If you value fiscal responsibility, a service that helps increase your employees’ financial literacy may be a good fit for your company.

Employee Ownership

Employees are critical to your company’s success, and if you want to give them more responsibility for the success or failure of the company, consider employee ownership options. These range from basic profit-sharing incentives (many companies offer stock options) to forming a co-op with equal ownership among all employees. Co-ownership with employees can be a huge shift in your operational model, and comes with tax and legal implications, so steps toward employee ownership should be thoughtfully considered and involve many stakeholders.

Table 4.1. Good Business Worksheet, Part 3: How you invest in your people is the third iteration of the worksheet. The corresponding agenda (Table 4.2) will walk you through it with your team. The rest of this chapter will take you through the Innovate-Accelerate-Decelerate cycle one last time to help you figure out which areas of impact you can work on to improve how you work with and support your employees.

TABLE 4.1 Good Business Worksheet, Part 3: How you invest in your people

TABLE 4.2 Good Business Agenda: How you invest in your people

THE INNOVATE-ACCELERATE-DECELERATE CYCLE FOR INVESTING IN YOUR EMPLOYEES

As with the previous two chapters, we’ll once again go through the Innovate-Accelerate-Decelerate cycle to help you implement all the recommendations in this chapter in a way that makes sense for your company.

I call it a cycle for a reason: you and your company should always be thinking about it and considering what you could and should be innovating on, accelerating, and decelerating. The hardest cycle will be the first; it gets easier after that. Just like you probably have a continuous improvement process or periodic quality control checks, you should have a continuous improvement culture around your impact strategies. The Good Business Worksheet and the Innovate-Accelerate-Decelerate cycle can help you not only as you start this process, but also as you continue thinking about increasing your equitable impact as your company grows and expands.

Innovate

Here, I’ll use a personal story to show what being innovative can do to support your employees. I gave birth to my daughter while I was working at a job that required a lot of travel. I was on the road almost every week when I returned to work, leaving my baby at home. I was still breastfeeding, so I had to take my pump with me.

Once I was in an airport, trying to get home, and I needed to pump. There was nowhere I could do it in private. I looked and looked around the terminal, but nothing. (Thankfully, this is less of an issue now as many airports have lactation rooms for new mothers.) I ended up in the bathroom, in a stall, with the pump balanced on my knees.

Needless to say, I was not pleased. In addition to having to catch a flight, I also had dozens of emails to respond to, calls to make, work to do. I did not have time to rush around a terminal looking for a private place, find nothing, and then sit in a bathroom stall trying not to spill milk on the floor.

I was an executive struggling with this problem, and couldn’t imagine what a new mother with a low-wage job (or two or three) had to go through to provide breastmilk for her baby. Retail and service workers often have unpredictable schedules, low wages, and little opportunity for advancement. These jobs are hard and undervalued, and do not offer the opportunity for employees to assert their needs around things like breastfeeding.

Thirty states now have laws supporting breastfeeding in the workplace,²⁷ but there are still so many barriers for retail workers, entry-level workers, and any type of “frontline” worker who regularly interacts with customers to do this. If I had to name one type of employee who is seen as an interchangeable commodity rather than an asset to be invested in, it’s these workers.

We need to think differently about how we invest in our employees and the structures we set up for them, especially for low-wage and entry-level workers. I faced so many challenges as a new mother, and those challenges are magnified for people with less privilege and support than I had. If you employ these kinds of workers—either in a retail store, a call center, or something similar—there are some innovative practices you can implement to help support them, improve their lives, and increase your bottom line.

The social impact consulting firm FSG, as part of their Talent Rewire initiative, researched the economic consequences of how our current system treats entry-level retail employees. (Disclosure: I consulted on some components of the Talent Rewire work.) They found that the retail industry loses $9 billion every year to turnover of entry-level employees. They looked into practices of companies like Verizon Wireless, the Container Store, and others to identify four strategies to increase retention and advancement of retail workers (see Figure 4.2).²⁸

FIGURE 4.2 Strategies for investing in entry-level talent²⁹

Investing in these kinds of innovative strategies to support your frontline or entry-level workers can improve their lives while also helping your company. The FSG research found that if a person doesn’t have a steady job by the age of 25, they’re at risk of losing around 40 percent of their lifetime income.³⁰ Investing in young workers early and helping them keep up their employment can have a huge impact on their overall quality of life. It can also have a huge impact on your business, as high-performing companies are 1.5 times more likely to offer entry-level employees the chance to advance in their careers than lower-performing companies.³¹

About 9 million of the 24 million frontline employees (defined by FSG as “entry-level employees who engage closely with customers”) are people of color. These people “represent a reservoir of talent, innovative ideas, and multicultural competency that are increasingly sources of competitive advantage.”³² Just as we have to think differently about how we support frontline employees generally, we also have to pay special attention to how we support our frontline employees of color. Many of these workers face additional barriers to success due to the effects of racism on their lives and their families. All of the steps outlined in Figure 4.2 can help support these types of employees, but you also must work to create a racially inclusive company culture.

FSG and PolicyLink did further research on supporting frontline employees of color and found three areas companies can invest in to create a more inclusive company culture for people of color: “building internal capacity for an inclusive, understanding, and adaptive culture; strengthening management and HR systems, policies, and practices; and intentionally investing in the development, recognition, and promotion of frontline employees of color.”³³

You can also support your employees—frontline workers or not—by being innovative with your benefits. When we think about benefits, we typically think about things like health insurance and 401(k)s. Those are important, of course, but, as discussed above (see the previous section “Benefits”), there are other things you can do to meet your employees’ needs.

Accelerate

Caterpillar, the construction equipment manufacturer, knew that they needed to diversify their talent pipeline as their existing workforce reached retirement age and the labor market grew increasingly competitive. But a manufacturing skills gap among young people and recent graduates meant they were struggling to find qualified applicants to meet their workforce needs.

I worked with Caterpillar to help them pilot a solution to this problem in Peoria, Illinois. This community in particular needed quality jobs; at the time, almost 20 percent of its Black residents were unemployed, compared to the national average of 4 percent. The community needed jobs, and Caterpillar needed employees. Seemed like an opportunity ripe for equitable impact!

Caterpillar worked with the public school system to develop a new curriculum to support essential and technical skill development. They worked directly with a high school that had a manufacturing focus to recruit students who were interested in gaining paid experience in manufacturing, while also receiving professional and personal mentorship along with academic credit.

Seven students completed the initial pilot program, and four were hired full time. Caterpillar expanded the program to four additional school districts in the fall of 2018 and expanded the focus from manufacturing to all STEM areas. The Peoria school district found the curriculum training so successful they expanded parts of it to the entire district.³⁴

Caterpillar’s results show that your company can easily accelerate these activities and expand your talent pool by recruiting and investing in young people who do not have a formal college education. Many of them are from lower-income backgrounds and are also more likely to be people of color, and, therefore, may have faced many barriers to success. An internship or apprenticeship with your company could be life-changing for them and their families. Success with this population requires rethinking your employee support structure as well. For this reason, the recommendations concerning support staff of color in the innovate section of the worksheet are relevant if you are looking to accelerate by emulating Caterpillar’s success.

There are likely many community groups that work with recent graduates or other young people looking for work, and you can offer your own on-the-job training to mirror the job skills education that the Caterpillar program provided. These kinds of apprenticeships, not internships, are a great investment as well. Only about a third of employers have apprenticeship programs, but those that do are much more likely to be successful companies: high-performance organizations are 4.5 times more likely to have an apprenticeship program or say they are going to start one, according to the Institute for Corporate Productivity.³⁵

Decelerate

I won’t spend too much time on this section, because I hope the recommendations here would be obvious to you by now; you should decelerate any practices that harm or hurt your employees. If you aren’t paying your employees a living wage, start paying them what it takes for them to take care of themselves and their families. If you are paying two people different salaries for the same job, fix that as soon as you can.

This may seem like an easy step, but if you are guilty of any of these practices, it will take time and energy to make amends. The National Low Income Housing Coalition found that currently there is nowhere in America that a full-time minimum wage worker can afford to pay rent. That’s right—if you work full time at the minimum wage, you do not earn enough to pay for a roof over your head. The average worker needs to make $20.40 an hour to afford a one-bedroom apartment, and $24.90 for a two-bedroom.³⁶ Depending on your company, paying this much may be easy, or it may be a stretch. As of this writing, the highest minimum wage in the country was $14.00 in California,³⁷ where housing is even more expensive—the average monthly rent in California was around $1,900 in 2021, more than 50 percent higher than the national average. Housing costs vary across the country and can be much higher within states themselves. For example, the average rent for an apartment in San Francisco, California, is more than twice the state average at $4,200 a month.³⁸

You may not think there are any wage disparities in your company and that everyone is receiving a fair wage or salary for their work. This is actually hard to determine—the wage gap between men and women, or white people and people of color, isn’t always as simple as a discriminatory hiring manager who chooses to give white men more money for the same work as his colleagues. (Although, sometimes this does happen. If that’s happened in your company, you should fire that hiring manager.)

Certain work that has stereotypically been seen as “women’s work,” such as cleaning services or childcare, is frequently compensated at lower rates than “men’s work” that requires similar education or training levels, like construction.³⁹ People of color who did not have access to quality education or elite institutions may not be as highly compensated as a white person with an Ivy League degree, despite their similar work performance.⁴⁰ Contracting out for certain jobs—like janitorial staff or food service—has become a common practice, but that also creates lower-paid positions with fewer benefits than a similar in-house job for a full-time employee.⁴¹

I am not recommending that you pay everyone the same amount as your CEO. But just as you can be innovative when rethinking how you support your frontline employees, you can rethink your compensation structure and policies. The disparity in pay between CEOs and other workers, in particular, has gotten out of control. In 1965, CEOs made 20 times what the typical worker in their industry made. In 2013, that shot up to 296 times.⁴² It’s no accident that businesses justify this increase as “adding value” at a time when the workforce is diversifying, rather than creating opportunities for more equitable pay.

Maybe you can offer a minimum salary based on the cost of living in your area, or not ask about salary history during the hiring process, so that what you pay isn’t based on another company’s discriminatory practices. You can also conduct a salary audit of compensation based on gender and race and make it public, to both understand what gaps exist at your company and hold yourself accountable for closing that gap. You can also make it the norm for women and people of color to negotiate their salary and provide them resources to do so—something that most companies don’t intentionally do.⁴³ If you dig into how you make your salary and compensation decisions, I’m sure you’ll find something you can change to help create equitable impact.

PUT IT ALL TOGETHER AND CHANGE HOW YOUR COMPANY INVESTS IN YOUR PEOPLE

Table 4.1 is the third iteration of the Good Business Worksheet; it is designed to help you walk through how you invest in your people. As always, you can do this worksheet by yourself or with your team. Again, I’ve included an agenda (Table 4.2) to help you if you decide to walk it through with your team.

Like the other two, this worksheet distills the lessons presented in this chapter to help you determine which areas of impact are the biggest opportunities for your company. Once you’ve got those, move to implementation with the Innovate-Accelerate-Decelerate cycle.

Steps to Completing the Good Business Worksheet

Step 1: Revisit your company values and consider whether they are still the right ones for the place your company is in right now. It’s OK if they aren’t—but before you complete this section of the worksheet, you need to come up with values that are authentic to your company and its culture.

Step 2: Now that you have them, think about what those values actually mean. How should your company live those values and create a company culture that reflects those values? Consider which areas of impact are opportunities to better live your values in how you treat your employees:

•   Recruitment

•   Training and promotion

•   Compensation

•   Diversity, equity, and inclusion

•   Benefits

•   Employee ownership

Each of these areas of impact require trade-offs, and some solutions may be more expensive than others. You may need to go back to Chapter 3 and consider how you are spending your money before you can complete this step. Your employees are the most important asset your company has, and investing in them is investing in the success of your company. Determine which trade-offs are worth making to ensure you are fully living your values and creating a thriving, growing corporate culture.

Once you have chosen your top areas for impact, circle them on the worksheet.

Step 3: Think about those low-hanging fruit opportunities once you decided on the top areas of impact. These should be things you can do in the next week or month—maybe reaching out to a community organization to see if you could partner with them on recruiting for an open position. Write these opportunities down underneath the low-hanging fruit question.

Consider next what may be harder, but potentially could deliver more impact: overhauling your compensation practices, or creating an apprenticeship program. Write these under the high-impact question.

Step 4: Now let’s move on to the Innovate-Accelerate-Decelerate cycle to begin figuring out how to implement changes in your areas of impact. Start with Innovate and consider which areas would benefit from innovative practices, either coming from within your company, such as adding a new company value of diversity, equity, and inclusion, or outside your company, such as creating better structures to support entry-level workers and reduce turnover. These can be the answers you gave to the low-hanging fruit or high-impact questions, or something else you and your team discussed.

Once you have the areas of impact that can benefit from innovation, write them down on the worksheet. Then, use the remaining questions in the Innovate column to help you figure out how to implement these innovative practices:

•   How will you bring innovative practices into these areas of impact? Or: What new ideas can help you better invest in your workforce?

•   What are your next steps to implementing these changes across your company? Or: What needs to get done to allow these changes to happen?

•   Will these changes affect certain groups more than others, and will they worsen or ignore disparities? Or: Are you missing or not considering potential effects as you think about these new ideas?

Once you have the answers to these questions, write them on the worksheet. Don’t forget to actually write them down on the worksheet! That’s a critical step that ensures the whole team agrees on what you are committing to.

Step 5: Repeat this process for Accelerate. Can you take something good already happening in your company around one of the areas of impact and expand on it? Or is there something you know others are doing that you want to adopt and grow within your company? Write down in which areas of impact you think you can accelerate some good practices and then answer the following questions to help you agree on next steps:

•   How will you accelerate impact practices within these areas of impact? Or: What are some good things you are seeing that you can build on to help you invest in your people?

•   What are your next steps to implementing these changes across your company? Or: How can you support team members to implement these acceleration strategies?

•   Will these changes affect certain groups more than others, and will they worsen or ignore disparities? Or: More specifically, have you considered how your employees feel or will feel about these changes, as you expand them across the company?

Step 6: Almost done! Do the same thing in the next column for Decelerate. Choose the areas of impact in which you think you need to reduce some harm your company is doing, and answer these questions:

•   What changes can you make in these areas of impact to decelerate the harm being done? Or: What can you stop doing that would improve your company culture and morale?

•   What are your next steps to implementing these changes across your company? Or: What steps do you need to take to stop these practices from continuing?

•   Will these changes affect certain groups more than others, and will they worsen or ignore disparities? Or: Will decelerating these things bring any harm to certain groups? Or could they actually increase disparities?

And make sure you write it all down!

Step 7: Once you’re done, make sure everyone agrees on what’s written on the worksheet and share it with your team and company. Now all you have to do is get to work on implementing everything you agreed to!

That’s it! That’s all three components of the Good Business Worksheet. Because this process isn’t linear, some of you may be starting here and will go back to the other two components later. That’s fine, as long as you make sure you do come back to the steps you skipped. You should start this process wherever it makes sense for your company, but you can’t fully do well BY doing good until you’ve completed the entire worksheet.

Once you have all three worksheets done, you can go back to the summary worksheet in Chapter 1 and fill that out using the information you and your team decided on in Chapters 2 through 4. This version of the worksheet will be a high-level summary, so think of it as a guiding, strategic document rather than an actual action plan. The other worksheets will serve as a supplemental drill down or double click on that overview to help you implement your big picture ideas.

HOW YOU INVEST IN YOUR PEOPLE: SYDNEY’S JEWELRY SHOP

Good news! Sydney’s partnership with the nonprofit helped her expand and reach many new customers, which allowed her to hire a local web designer who created a beautiful e-commerce site. Her business is booming! She’s at the point now where she can hire her first employee. (What can I say? I raise them right!) Let’s see how she’ll use the lessons discussed in this chapter to help her with her hiring processes:

Step 1: First, she thinks through her values. No surprise—she goes ahead and adopts my Values Snowball (like mother, like daughter).

Step 2: Sydney’s so excited about being able to hire her first employee, she puts all areas of impact on the table. (Go Sydney!)

Step 3: She finds low-hanging fruit for impact in her work environment: (1) a supportive community where her employees feel they can be their full selves and (2) flexibility when needed. Harder to achieve, but higher impact, will be her talent pipeline and training: she wants to exclusively employ people who have either been involved with the justice system or suffered some form of trauma. She wants to give them the skills to not only make and sell her jewelry, but start and run their own businesses.

Step 4: For innovate, she decides to build on her partnership with the girls’ empowerment nonprofit, which not only teaches girls how to code but offers financial literacy and entrepreneurship classes to women who need them. She works with the nonprofit to give one of the students hands-on experience as an intern at her company. This both broadens her recruitment pipeline and serves as on-the-job training for the intern.

Step 5: For accelerate, she decides to look into an employee ownership option. If her goal is to help others run their own businesses, bringing employees in as co-owners of the business is a good place to start. They will be even more invested in the company—especially because it is small but growing—and co-ownership gives them more opportunities to be innovative and creative as the company expands. Ideally, she could create different product lines that the employees could own and make theirs.

Step 6: For decelerate, there isn’t much since she just started to hire, but she does worry about her ability to recruit and retain a diverse talent pool. The partnership with the nonprofit is a good place to start, but working with a high-needs population can be challenging. She wants to understand more about what as the company’s executive she should do to ensure she’s supporting those who are helping her company grow.

Step 7: Checking in on her blind spots, Sydney considers any unintended consequences the actions she takes to invest in her people may have. For innovate, she revisits her thinking from Table 2.2, How you make your money worksheet, to ensure that the nonprofit she’s partnering with is serving those most in need, and that the intern she currently works with does not have access to internship opportunities elsewhere. For accelerate, she wants to make certain that the co-ownership options she’s considering are fair and equitable, she decides to work with an expert to figure out the best way to structure it. For decelerate, she ensures that whatever training or resources she uses include a racial equity lens so that she can learn how to work with everyone in an affirming way.

Step 8: Table 4.3 is Sydney’s completed Good Business Worksheet. She hangs it next to the other two, which are now above her desk in her new office downtown. (Remember, this is hypothetical. I don’t let my kids rent office space.) She’s ready to keep on growing her business through the power of equitable impact!

TABLE 4.3 Good Business Worksheet, Part 3: How Sydney’s jewelry shop invests in its people

Step 9: Every quarter, she meets with her ever-expanding team to revisit these worksheets and see what they can change. She has achieved many of her low-hanging fruit goals, and replaced them with new ones. The Innovate-Accelerate-Decelerate process evolves, as it should, and new areas of impact are tackled. Equitable impact continues to drive her business, and her profits continue to increase along with it!

ADDITIONAL RESOURCES

Examining Your Workforce

The Opportunity Navigator™, a free online tool that companies can use to re-evaluate their hiring practices and help expand their potential workforce, is a collaboration between Talent Rewire and Grads of Life. A community of experts helped define a set of principles and associated talent practices that prioritize equity, inclusion, opportunity, and mobility within your company while generating business value called “Opportunity Employment.” The principles include:

•   A culture of inclusion and belonging

•   A data-driven approach to equity

•   Proactive and intentional recruitment

•   Minimized barriers to accessing roles

•   Family-sustaining wages and benefits for all employees

•   Systems that support on-the-job success and ongoing professional development

Their free online diagnostic tool is designed to help get your company started by offering ways in which you can change your hiring practices and help align your HR policies with doing well BY doing good. You can learn more and complete the diagnostic at: https://www.opportunitynavigator.org/

CASE STUDY: EMBEDDING EQUITY: WALMART COMES TO DC

I profiled Walmart’s supply chain efforts earlier; now I would like to discuss another aspect of the global corporation’s work to embed equitable impact across their company—their recruitment, training, and retention practices, with which I have direct experience.

I started working with Walmart in early 2010 as they were planning their first expansion into the broader Washington, DC, market. This was one of their first tests of “urban” stores; most of their retail locations at that time were in rural, suburban, or exurban markets. They were experiencing challenges expanding into this urban market, which had a different workforce than they were accustomed to. Within the city, the education system was problematic and there was high unemployment. They couldn’t recruit talent from outside the city—from the suburbs, for example, because the traffic made it difficult for anyone to travel to work.

One of the things I did to help them solve the problem was to partner with the DC Department of Employment Services, the Community College of the District of Columbia, and other nonprofit and private sector organizations. These partnerships allowed Walmart to expand their recruitment pipeline in the area and gave them access to hire and train the talent they needed to staff their stores.

Part of Walmart’s strategy for their market expansion and engagement with a different workforce was to test the effect of a higher wage for their employees. Back then, Walmart had received a lot of criticism for its low wages, which were insufficient for their employees to live on. When it was first announced that Walmart was coming to DC, there was tremendous pushback from the community. There was concern that Walmart would create a “race to the bottom” for retail worker wages.

The DC Council passed a minimum wage bill that was directly targeted at large retailers like Walmart, requiring them to pay a living wage, which at the time was $12.50 an hour. This bill was vetoed by the mayor after Walmart threatened to stop construction on three additional stores, saying they couldn’t stay in business with this law in place. The fight left many in the community feeling bitter and wary of Walmart’s presence in the city.⁴⁷

After the veto, Walmart continued its expansion into the DC market, but made a commitment to pay a wage that was “at least $1 per hour higher than what is offered currently at Safeway and Giant [local area grocery stores].” In fact, this came to around $12.50 an hour at the time.⁴⁸

After a year operating in the DC market, Walmart hired a firm to analyze their impact on the region. It reported that the two stores that had opened together employed 700 people, 65 percent of whom were DC residents, and were responsible for half of the retail job growth in DC during 2013.⁴⁹

The benefits to the community weren’t only related to how Walmart invested in its people. The stores were located in areas identified by the US Department of Agriculture as “food deserts,” neighborhoods with no access to fresh foods and vegetables. The Walmart stores brought fresh food to these areas at a low price that people could afford, creating a new revenue stream for the company and offering healthier options for people living in those neighborhoods.⁵⁰

Walmart also affected the community beyond its stores and employees. A separate report by a local DC group found that Walmart hurt other local businesses, whose revenues fell by 20 percent to 85 percent in some cases as they attempted to compete with the giant retailer and its low prices.⁵¹ While Walmart undoubtedly increased job opportunities for those in the local community, it is important for companies to look at the overall net impact of their efforts, particularly when expanding their footprint in a community. A few questions worth reflecting on are: Is your expansion negatively affecting local businesses? Or is it making neighborhoods less affordable due to increased property taxes? Equitable impact extends beyond what’s obvious and immediate and companies must be intentional about the ripples of change they create in communities.

Walmart has started a Center for Racial Equity⁵² that represents an acknowledgment and approach to move beyond job growth as the sole focus of their impact in their communities. This center focuses on a few issues areas, including finance, health, education, and criminal justice. Through this center, they are working to support Black businesses and other local businesses in communities around the country.

Ultimately, Walmart built six stores in the DC area that were so successful for the company that Walmart decided to expand on the lessons it learned and slowly increased wages in its stores across the country. By 2019 the average hourly wage across the whole company was $13.63.⁵³

They did this because it helped their bottom line and also helped their employees. A 2019 report found that in the five years after they began increasing wages, they reduced turnover among their retail employees by 10 percent.⁵⁴ In September 2021, facing a labor shortage as a result of the COVID-19 pandemic, Walmart decided to increase its wages by at least $1, which raised the average wage to $16.40; the minimum starting wage went from $11 to $12. In some stores the starting wage was as high as $17 an hour.⁵⁵

Walmart is not a perfect company, and, like all companies, there are certainly things they could be doing differently. That is why there is a “decelerate” section of the Good Business Worksheet. In DC, Walmart attempted to “decelerate” its harmful effects on the small business community by working with local nonprofits and donating to community partnerships that supported job training. But its work to increase its compensation and better support its workforce shows how a company can help improve the lives of its employees while also improving its bottom line.

Walmart’s increasing its compensation had a massive impact because of its scale. How could your company have the same impact on its employees, regardless of its size?