Job Quality is a Pathway to Alpha

hello everybody and welcome to episode 130 of asbn live job quality is a pathway to alpha i'm your host felicia sivalingam the american sustainable business network senior manager of events and programming i'm thrilled to be passing it over to our presenter who put together this session dr frank miller who heads up work workforce and organizational research center she has spent her 30-year career collaborating with investors employers national advocates and community-based organizations to help make frontline jobs better and more accessible to all an organizational scholar by training dr frank miller has 15 years of experience in hr consulting and excels at creating evidence-based programs and policies prior to launching work she founded and led the workforce financial stability initiative at the social policy institute at washington university in st louis she earned her phd at the university of chicago it's now my pleasure to turn it over to dr frank miller thank you so much i'm really pleased to be here and um really appreciate everybody joining us today um if you would like to introduce yourselves in the chat that would be terrific and i will go through and just quickly introduce us and then introduce you to angela and her phone so i as we just heard i'm ellen frank miller i am the chief scientific officer and founder of work the workforce and organizational research center where we envision an economy where every worker has a job worth having because better jobs mean better business and i'll just briefly tell you a little bit about what we do and i would like to thank the innovation research resource center for human resources that provided generous support for the development of this webinar so at work we have two areas of practice the first we call work evidence and the second we call work action and with work evidence we test innovations to improve job quality in partnership with nonprofits and philanthropy and what we learn about improving job quality for business impact in our work evidence research we apply in work action in partnership with investors and their portfolio companies so what i would like to do today excuse me is to take you through three high quality research studies that demonstrate the connection between improving frontline jobs and getting better financial returns and to do that i would like to introduce you to angela so angela is 26 years old she is a part-time community college student with two little kids and she also works part-time as the sales associate at the gap in addition to those many roles in her busy life angela is also a consumer out in the marketplace so to keep her life organized angela really relies on her phone and her phone is old now and really on its last leg so angela has planned and saved and is ready to buy a new phone that will help her to meet all of her many important responsibilities so this is a big deal for her she finally excuse me pulls the trigger orders her new phone online and a few days later it's promptly delivered to her door by ups and angela is super excited to have her phone and to get um to get going on all of her commitments so let's go behind the scenes now with our first case study so this is a case study of ups that was published in the journal of organizational excellence in 2005 and the challenge that was facing ups at that time was that they were experiencing high turnover among their part-time delivery drivers so recruitment costs were extremely high and they really needed to find a way to save that money and to reduce turnover so in order to do that ups investigated what was behind the the turnover that they were seeing what were the underlying causes and they they identified several different factors and one of which related to recruiting but i'm going to focus on factors that were related to two job characteristics that were relevant to turnover the first one being what we call perceived supervisor support and the second perceived co-worker support and it's just what it sounds like so when folks feel like their supervisor is there for them has their back they can rely on their co-workers for help and support if they need it they are more satisfied in their jobs and they are less likely to leave the organization so discovering that these were potential pivot points ups created programs to increase the levels of perceived organizational perceived supervisor and co-workers support in part by changing the way they did their onboarding initially and then also by creating a program committee of employees and managers that would kind of monitor and stay in touch with new hires in order to keep their eyes open for anything that might come up as a problem and they went ahead and put these new practices into place so here are the results in fact ups was able to reduce turnover among these part-time drivers and they lowered their hiring costs by a million dollars annually now remember this is 2005. so that's like 50 more today so this is a really terrific um financial outcome for the company but wait there's more there were some unexpected results as well so they discovered that after implementing these improvements to job quality that missed lost days of work due to injuries decreased by 20 percent and in addition the number of problems with deliveries declined by 75 percent um so there you see angela received her phone without any problems and was a very satisfied customer so let's get back to angela angela loves her new phone it is helping her make her life simple keep all of her commitments her kids school her classes her assignments her work schedule all organized but after three weeks angela's phone dies if anyone has ever had that happen you know that this is a calamity it throws everything into disarray and this is really a serious problem for angela and in addition she doesn't have any room for error in her life so getting this phone fixed is a very big deal for her so angela calls customer service customer service says don't worry about a thing we will send you a postage paid uh label and you can send the phone back to us and we will either repair it or we will replace it with a new phone well that sounds great but in the meantime angela doesn't have her phone so this is really terrible for her it's a big inconvenience she has to pack it up she's got to go find somewhere to ship it back she has to find coverage for her kids or find a time when she doesn't have class to get over there to send it back so angela is not happy in this situation and as many consumers do angela complains about this but not just to her friends and family she also posts about it on social media which is the worst thing that can happen for a consumer products company so let's go behind the scenes again here to the cell phone manufacturer and what was going on there so this is the second study that i want to share with you this is a from a working paper that was published last year in 2021 by scholars from the university of chicago wharton and stanford and what they were facing here in this case was at this cell phone manufacturer they were experiencing these increased costs from product failure and the costs were coming from a couple of places the first cost was the round-trip shipping for defective phones so right remember that postage page label that angela got well then they're going to ship that phone back to her so right there there's an expense but also there's the cost to them of repairing the phone or replacing the phone and additionally as we said the poor quality is also hurting um their reputation with their customers um so that was the problem and these researchers went in and they got fascinating data um they were able to track which phones came off which production lines during which weeks of the month and they also had weekly turnover data that they could match up with it and what they discovered is that failures in the field which is what we what they say in manufacturing when a product passes quality assurance goes out to a customer and then dies that's a failure in the field so failures in the field were tracking with turnover rates they moved in tandem and this was a really big surprise and what they discovered was that during weeks when um her turnover was high the number of failures in the field later on was 10 percent higher than during weeks with lower turnover um so this was really interesting that they that they learned that really what was happening is employees who knew they were going to quit waited until payday and then the next week they quit so they got their last paycheck and they quit so that first week of each month they were short-handed on the production line and there was chaos right it's a complete disruption you have to bring in other people who are less experienced to to fill the spots and you know this is this is a really big deal for the company and what ends up happening there is that your failures in the field were going up by one quarter to one half percent for every percent increase in turnover on those lines now we're talking about millions of phones this is hundreds of millions of dollars so what the researchers concluded here is that if the company could identify the underlying causes of that turnover and work to find ways to retain these workers by improving job quality like for example by raising wages or finding opportunities for folks to advance that they could save enormous amounts of money in addition to improving their reputation so let's come back to angela so angela her phone could not be fixed but that's okay they sent her a replacement she gets all of her apps loaded onto it again everything is back to normal now she is managing her complex schedule and things are going great but nothing lasts forever and angela's got a sick kid so anyone who has had a sick kid in their life knows this is a big disruption and you what can you do she has to take her child to the doctor so again this is a really tough situation for her with her schedule but that's okay angela's got this and the reason for that is that her employer the gap has implemented um new work scheduling policies and practices that allow her to have more control over when she works and angela is able to swap shifts using an app on her phone so she puts her shift up someone else takes it angel is able to go out and pick another shift that works for her schedule so she's not losing the income by just calling off which you know in retail if you call right before your shift and say i'm not coming in that's called calling off and that's really tough on the associates who are on the sales floor on the manager who's got to figure out coverage so angela doesn't have to call off she swaps her shift her boss is happy they're not short-handed on the sales floor so this is a really great outcome so let's go behind the scenes one last time so this is a study that is uh near and dear to my heart i did not work on it but i'll tell you more about that in a moment and what we have here uh is is a study that's published in management science or it will be pretty much any moment um the the link that annie is putting in the chat right now is to an earlier uh report from the study the peer-reviewed article is coming out in in a minute and what happened here is that there is a you know in the retail industry there's you know a clear connection between the matching the amount of labor that you have on the sales floor to incoming traffic in order to maximize profits so if you don't have enough people on the floor you have customers who can't find what they want they walk out without buying if you have too many people on the floor you have unutilized labor and that's an expense that isn't being matched up you know to to the customer need so the idea is you got to strike that perfect balance and so there's this assumption that like well that just means there's going to be instability and you know sometimes we'll have to call more people in other times we'll have to send people home early it's just the cost of doing business but the gap really felt like there had to be a better solution and if they could crack this nut and improve scheduling so that they could maximize this without creating so much disruption that they really believed they could have a competitive advantage so what they what they did in this case is they partnered with uh researchers from the university of chicago university of california at hastings and as i said this is near and dear to my heart because what they did is they implemented and a new way of doing scheduling work scheduling at their stores and what they the researchers refer to this as responsible scheduling practices and the precursor study is the one that i worked on where we tested the components of this responsible scheduling practices in order to design what the gap ultimately in this study implemented so the way that they did this is they conducted a rigorous experiment which is very exciting and very difficult to do in social science so there were 28 stores that were involved in the experiment in chicago and in san francisco and they randomly assigned half of those stores to continue doing scheduling as usual and the other half implemented these responsible scheduling practices this was done between november of 2015 and august of 2016. so these these half of the stores kept doing what they're doing half did something different and these new these responsible scheduling practices were intended to create more stability and predictability in work schedules and of course as we saw with angela to give folks more opportunity to have you know autonomy in arranging their own schedules and that flexibility so here's here's what happened when the company incorporated attention to employees well-being into their business practices they had significant improvement in their financial performance so at the stores that implemented responsible scheduling practices they saw an increase in median sales of seven percent now if you're not familiar with retail seven percent it doesn't sound like that much but in retail if you increase median sales by like three percent i mean you are killing it that is an amazing increase so seven percent is just off the charts so what it translates into is like six dollars and 20 cents in revenue per labor hour this is really remarkable um and so what the bonus was um is that employees were more engaged in their work they were more satisfied with their jobs and employee well-being as well as health outcomes you know improved as well so this is a fantastic outcome for the gap as well as for angela so we have our happy ending excuse me for angela but what have we learned from angela's story and of course what we have seen here is that when we make jobs better we get financial returns and this is very good for investors because when you have a sustainable competitive advantage you have access to alpha annie is also going to put into the chat another study that that just came out in june um it's very high on the nerdometer but it's a fantastic piece called employee satisfaction and long-run stock returns from 1984 to 2020 uh published in financial analyst journal and this this is an amazing piece of research where they used complex asset pricing models to look at a portfolio of companies that were known to be best companies to work for had very high levels of employee satisfaction and compared it to a portfolio of just typical uh similar types of companies and what they found was that the the companies that had high employee satisfaction um had an alpha like they had like 20 basis points higher returns um and that alpha was actually highest during periods of economic crisis so this wasn't just oh when things are good employees are satisfied and these companies do better it was during crisis periods that the alpha was highest um so these this was really a remarkable outcome so let's go back and review the companies the businesses that were part of angela's story so we have cell phone manufacturer with a failure in the field we had great customer service from ups and we had the gap with higher sales and higher labor productivity so what we've got here is we've got two winners and one opportunity so ups improved job quality by improving levels of perceived supervisor and co-worker support and they reduced costs and also increased customer satisfaction here we have the gap the other winner they increase the quality of jobs by implementing responsible scheduling practices and they improve financial performance as well as employee satisfaction and here's the huge opportunity right the cell phone manufacturer where they found a relationship between failures in the field you know product quality issues and levels of turnover and if this company can improve the quality of jobs to reduce turnover they will save enormous amounts of money so the one opportunity we have three decades of research so i chose these particular studies in order to tell a story but there are decades of research behind this proposition that there's a strong correlation between making jobs better and getting financial results which leads to alpha for investors and what i want to now share annie's putting in the chat is a companion article if you would like to read more about this that includes some additional data this is called want to achieve alpha make jobs better and i co-authored this article with tom wolfel senior director of impact at hcap partners impact investing firm and you'll see in this uh there's an additional item in this it's a roundup of studies that refer to the materiality of human capital management um annie's going to put that in the chat as well this is also very high on the nerdometer but it's a terrific review of 92 empirical studies that looks at materiality in human capital management including improving job quality and they find across these 92 studies strong evidence of positive relationships between those practices and these key financial metrics so again this very exciting research that's been done and i think what we can now kind of ask ourselves is like okay improving job quality better financial results so how do we do that so what are the levers we can pull how will we know that it's going to work and where should we start well i'm not going to leave you hanging here we have a free resource for you on that and we'd like to introduce the job quality maps so this is a project that my team did in partnership with the national fund for workforce solutions with very generous support from the bill and melinda gates foundation um and what my team did is we read close to 200 academic articles peer-reviewed research studies most of which were meta-analyses so that means like the previous study they look at lots of different studies and examine the commonalities etc so the job quality maps are based on over 3 000 empirical research studies and what it does is it visualizes the correlations between five workforce kpis that are related to financial outcomes and 26 different job design choices so here are the job quality maps and what i want to say about this is first of all to quote my colleague tom strong at the national fund every job that has ever existed was designed by someone companies put enormous resources into designing products etc so when we have the opportunity to design things we have the opportunity to improve things every employer no matter what constraints they face can improve job quality for business impact and if you take a look here what you will see on the left hand side are the kpis i mentioned so things like turnover intention um engagement at work burnout and then over here on the right hand side i hope you can see my mouse these are the job characteristics that we find in the research literature that have strong correlations to these key performance indicators to these kpis and you'll notice we have some little colored uh diamond shapes and they are a key that are linked to each of the job characteristics to show you where we have correlations to each of the kpis so let's take for example because it's the first thing people think about with job quality let's take a look at wages over here down in the second category under pay and benefits so one thing i want to say about wages is that people immediately attribute increased wages to higher job quality which is not untrue however research shows that wages is not always the first thing that employees identify as their highest priority when they when making jobs better so there appears that there is a there's a floor so folks who have wages below that floor that makes it difficult for them to survive and thrive wages will be their highest priority for improving the quality of the jobs that they have but once you exceed that floor and people are in a place where they are financially secure wages get supplanted by other factors of what composes a high quality job so if we look at wages for example here you can see that indeed wage levels are correlated with turnover intentions but you'll notice that wages are not correlated with burnout we don't have you know a pink bee over here so if your challenge with your workforce is that people are really burned out raising wages not going to help you the evidence just doesn't support that the same thing for benefits benefits programs are terrific and improving benefits programs has a relationship with reduced turnover particularly with health insurance programs but a burnout is your problem you need to look somewhere else so similarly when we look here up here in this category of meaningfulness we see that meaningfulness is strongly correlated with engagement at work so that is terrific if your challenge is to be have your workforce become more engaged at work but if you're trying to reduce turnover it does we don't have evidence that increasing people's sense of the meaningfulness of their work is going to reduce turnover so what i want to call your attention to are a couple of things so here up at the top we have perceived support from coworkers as well as from the organization so we saw that with the ups study and also down here under supervision quality we have perceived supervisor support which you can see again is correlated with turnover so let's kind of keep our eye on these blue diamonds for turnover for a moment because angela's experience hinged on turnover intentions in all of these scenarios so at ups by reducing turnover for the part-time drivers we had great customer service and angela got her phone on time at the cell phone company high levels of turnover were compromising product quality at the gap by improving scheduling practices angela was a very happy employee and she's not looking for a job so turnover intention plays a big role so let's focus in on that to get a little deeper into the job quality maps so here what you can see is that subset of job characteristics that are strongly correlated with turnover intentions so you can see there are a wide range of levers that companies can pull to reduce turnover now when i show this map to employers that we work with and do research with i immediately get the question this is great which one's the best which one should we do and my answer always is well let's ask your employees because while all of these have strong empirical evidence correlating it with reduced turnover if you put your efforts into the wrong place you may not get the biggest bang for your buck so this is where employee listening or what sometimes referred to as employee voice can really give you a big advantage in improving job quality for business impact there are lots of ways to raise employee voice to get that input whether it's surveys or interviews and focus groups town hall meetings the good old suggestion box there are lots of opportunities to get input from employees and that can help direct your efforts um you know so as we talked about increasing wages you know that is always a positive however it's not always possible and it doesn't mean that we can't improve job quality and reduce turnover if we listen to employees and we discover that for certain groups wages are a serious barrier then that needs to be a top priority but if we discover for example that what employees really are looking for is more opportunity to develop skills to have opportunities for advancement then gearing all of your resources towards increasing wages is not going to get you the best results in that case looking at practices that are related to skills training and opportunities for advancement will give you your best opportunity to make jobs better for business impact and with that i would like to stop and ask for questions i will stop sharing my screen here and we'll see what we have in the q a hello again dr frank miller i just want to say i am so impressed by looking at the maps that you created based on all of the research that you did compiling it in a really clear easy to see visual format is amazing so kudos to your team for that and how cool that these resources are available for all of us many thanks to the bill and melinda gates foundation for their support so we do have a few questions populating in the q a box from our attendees first i will ask from christian who says have you seen similar results across industries or does each industry have its own triggers so as you saw in the very small number of case studies that we presented we covered um three different industries so we covered transportation distribution and logistics with ups we covered manufacturing with the cell phone and we covered retail with the gap so as you can see all of these companies across industries were able to improve job quality for better financial results but they all went about it in different ways based on their particular challenges in their industry so and in retail turnover scheduling practices that was the best leverage point um in this case in manufacturing they were able to boil it down really specifically to the production line and it's interesting in their study it wasn't the quality assurance right off the line that was the problem where you could have someone checking it was really things failing in the field that had to do with less experienced folks actually doing the manufacturing and then for ups it was really understanding where is that weak point in the delivery experience and identifying you know what could you do about it so while the solutions or the ways to go about improving job quality can definitely vary by industry the opportunity to get that impact by making jobs better you know is a is a consistent one thank you for that i have another question from julian who asks how can financial institutions work with businesses to make sure job quality characteristics are included in any investment be it a loan c note or equity investment are there specific terms in their term sheets specific underwriting procedures that can capture job quality another way to track those things so financial institutions have a huge role to play in both enabling and incentivizing improved job quality for alpha and whether that happens in the diligence phase where um company or financial institutions are looking at these characteristics during the investment decision making process um including them in their ddqs so that you can um for example you may in addition to asking questions like you know what is the the percentage of diverse uh folks you have in different roles in your company or what is the average wage of workers you can dig in a little more deeply to look for some of those characteristics we saw in the job quality map like for example what are the ratio of supervisors to employees that can be a proxy to help you understand levels of supervisor support um during the process of you know actually making the deal some companies like hcap partners um which is an impact investing firm that as i mentioned my co-author tom wolfel works with you know if you build this into how you're doing your deal and set the expectation that we are going to support you in improving job quality for business results and we're going to hold you accountable we'll give you resources to help you measure those outcomes but we anticipate we expect that you will track this because this is a business practice that will give you positive results yeah that's great and speaking of that i have a question from jennifer asking giving that the new scheduling tool was created and validated by gap in 2015 and created such a huge increase in profitability what has inhibited the adoption of such practices by other retailers that is a very incisive question and i wish that i had a great answer for it what i will say is that it's often difficult to translate really rigorous research for a broader audience which is part of the reason that we hope that this webinar can serve that purpose but what i'll say is that it's difficult to undertake these things so when we think about what creates sustained competitive advantage sustained competitive advantage is not easy to achieve that's why it's a competitive advantage so committing the resources to actually undertaking new ways of working you know is a significant lift and organizations have to be persuaded that they will get a financial return however what we find is that when business practices negatively impact workers over time regulation will come about and what we have seen in major u.s cities including chicago and new york and san francisco are what are called fair work week ordinances and these fair work week ordinances you will notice very closely mirror some of the characteristics of what the researchers named responsible scheduling practices so they require for example fast food retailers of certain size to actually follow certain practices like for example giving workers at least two weeks notice of their work schedules now that may sound pretty basic but it's not uncommon in retail to get your work schedule on thursday or even sunday for the next week which is extremely difficult for workers and very disruptive when folks can't come to work so fair work week ordinances require employers to do this now needless to say employers who had already embraced these practices they were ahead of the game and complying with these regulations was not nearly as challenging and disruptive so if we um if we adopt good practices we avoid regulation and when we don't regulation will eventually over time likely bubble up yeah it's insane to think that people really don't know what days they're working that very week just a reminder to everyone we do have time for more questions so if you see the q a box at the bottom of the video screen that's where you can click in and type whatever question you want to ask dr frank miller i do want to address one from peter i can do this myself he asked if there will be a recording for this presentation and there will so i'm going to drop the link in the chat for the link on the asbn website where we'll be uploading the video from today's recording later today in the meantime i have a question from anne for you dr frank miller she asks a pretty big picture question how do frontline job quality transformation efforts translate to equitable change so job when we talk about diversity equity and inclusion goals we're talking about who is working for our company and who is succeeding at our company well we cannot achieve dei goals where bad jobs persist we can't hire our way at the highest levels of organizations to reaching true equity and inclusion if our jobs at the lower level are bad quality we don't give folks an opportunity to gain skills and experience to advance through the organization research shows that people of color and women are over represented in the lowest level jobs in the org chart across all industries so if we want to achieve dei goals we have to improve job quality it is the only pathway through which we can achieve that so when we look at how do we create equitable change if job quality is not part of your company's agenda it should be and there are ways to measure the impact of improving job quality on dei outcomes as well there's lots of good research out there thank you for that we have a question that asked kind of a baseline question for understanding this presentation but an important one just to reiterate which is can you define alpha how do you define alpha um so in terms of the investment world when we talk about what are market rates of return we look at the market as a whole and what is the average um so alpha refers to above market returns so we expect that over time we will have a typical level of return return on investment for investors when we see companies that are returning above the market there's there's something going on there and that is is called alpha that difference between market return and above market returns there is some debate in the academic literature whether alpha can even exist that the markets over time should reach equilibrium but the one study that we shared with you about employee satisfaction and stock prices over time suggests that alpha can persist when the market doesn't recognize um a pathway uh to higher level returns which is apparently what has been going on in terms of employee satisfaction as a lever for financial performance thank you for iterating that and it's also good to know that there is a discourse even about that definition i want to bring up a question asked by lee orlay sorry and they asked do you know of any ongoing study that correlates quality of workplace experience with financial results um so i would say that there are probably many studies out there i think we would have to get a little more specific for us to find you examples of that but what we are hoping to do as part of our work action practice is to work with investors to improve job quality at portfolio companies and to be able to track over time both the changes and job quality levels as well as the investment returns for those who are in private equity but there's a great deal of research that is going on that connects job quality to the kpis you saw in the job quality maps as well as then financial returns i wish that i could point you to studies but there are are many and if you'd like to reach out afterwards i'd be happy to um you know to help find some additional resources on that thank you for offering that i want to bring up a question asked by jennifer which is a very hands-on practical question can you talk about how employers particularly small businesses can begin to measure job quality for themselves this is hard because in smaller organizations getting honest feedback from employees can be difficult so the the research that we did um with support from the gates foundation in partnership with the national fund uh for workforce solutions actually focused on small to mid-sized businesses and these organizations on the one hand are constrained in different ways that larger organizations are but they are also um they they are managed in different ways and they are able to take action um that is often difficult for large employers to to do in a quick way they're more nimble so in terms of measuring improvements in job quality employee voice is a really important and and key metric to see how you're progressing on making jobs better at the same time there are other ways in which you can do those measurements so for example it is possible to measure your turnover rates it's possible to look at take-up rates of benefits programs if you are you know offering something that is new that is an indicator of improved job quality when we think about perceived supervisor support or perceived co-worker support when we think about getting feedback from employees on a survey if people are concerned about confidentiality um they may not respond um at the same time if managers um you know are getting feedback from workers about their their complaints or human resources are what human resources observes and i actually was speaking with an engineering company a few weeks ago where hr is aware of some of the challenges that employees are facing so they're aware of opportunities to improve job quality and i encourage this as a small company here in the chicago area i encourage you to just set up a spreadsheet and to keep track of what are those opportunity areas and how frequently have those arisen because then over time you have the chance to track and say well you know how many folks are complaining in this given month about managerial issues how many folks you know have problems with accessibility of you know getting to work and transportation um how many people are having conflicts with coworkers so there are ways to to track data in a really simple fashion that can give you a sense of whether you're improving on job quality and of course you know the other opportunity is to have researchers or or another organization a third party to gather that information in a confidential way those are all great suggestions i love the spreadsheet idea when resources and budgets are tight too we have a question here in the chat asking how can managers obtain and understand the needs of their frontline workers and how can they best leverage this information to more effectively support frontline workers and boost corporate profitability so good communication is part of perceived supervisor support so in terms of getting that information from employees improving managerial skills and maintaining open relationships is the best way to get that feedback so managers who feel like they're not getting that feedback there's an opportunity to look for professional development also coaching from their managers and human resources potentially but the idea is that if we have open communication and you people are willing to say the hard thing about what is troublesome for them that points us in the direction then of where we can improve the quality of their jobs and i'm sorry velocity i forgot the second half of that question so the second half of that question was let me open it up here and how can they best leverage this information to more effectively support frontline workers and boost corporate profitability sure and and i would say this goes back to the the question about small businesses as well so you know getting information from employees through through surveys um you know through town hall meetings through informal you know management by walking around all of those methods are good ways to to raise up potential areas to improve job quality and i think this is where i refer folks back to the to job quality maps to say when we've identified what is our top priority for our business because although turnover is extremely important and it's a very big issue ever since the great resignation there are times when other job characteristics are take precedent in terms of the corporate strategy and then those may be the places that are most important to leverage in order to get those financial returns so for example in the the gate study that we did we worked with a manufacturer aerospace manufacturer in the northeast that was implementing a brand new strategic plan to set the stage for substantial growth they had brought in from the outside a the first ever chief operating officer and he was working to implement a new strategic plan well this is a very difficult uh situation it's a company of just under 100 employees family owned and here's this outsider saying we're gonna do things differently so getting employees on board and and getting their buy-in to make change in how they're doing their work was really a top priority so we go to turnover a lot we go to wages a lot but to improve levels of employee engagement was the top priority here and in this case the way um the the executive went about it was to implement what's called high involvement work processes so instead of saying here's our strategic plan here are the goals that we have here are the strategies that we're going to use to get there here are the tasks that we want you to do go out do them succeed it was a bottom-up process to say well here are the goals that we have now how do you think in your work groups we can best accomplish this now this is not a question that machine operators are used to being asked but this is a great skill building opportunity for these folks to actually be involved in decision making and problem solving in that way and it was a great skill building opportunity for the frontline supervisors who were not used to facilitating this kind of participatory process so it there are there are ways to go about making changes that will give a win-win and improve financial results and i think that in terms of how we collect our data you know i'm a researcher i'm always in favor of surveys where they make sense but i also find that we can understand not just the what is the problem but the why is it a problem best through conversations and of course when you have a third party doing a confidential interview you will get more information but even an informal conversation if you give people the opportunity to share feedback if they feel remotely safe they'll usually tell you what's bothering them if they don't feel safe and they tell you everything is okay and yet you know from your data or your your work um outcomes that things are not working well that's an indicator that part of your problem and an opportunity to improve jobs is to look at what are the characteristics of our environment that are making people hesitant to speak up so i hope i answered that question yes you answered it beautifully and i learned a new term with the high involvement work processes but no that's genuinely right to make people feel comfortable and that it's an open safe space is definitely an indicator of a good workplace there's another question in the q a box which is are there any other examples of job quality transformations leading to above market returns other case studies that you have so as i said there's a huge body of research i would direct you to our article where we do have others involved there in there and then also to uh some of the the additional studies that we put in there there are there are many and i don't have all of them at my fingertips but again if you'd like to reach out to me individually i'd be really happy to have that conversation but we we know from many decades of research that where we connect these workforce kpis to financial outcomes that was the human capital management and materiality paper that we shared with you that we do see these financial results um and and sometimes what i find is that part of what goes on here um is to say we want a business case we need proof that if we make these changes we will get financial results well there's sort of two factors here the the first one is where are we today with our status quo do we need evidence that our status quo is producing financial results would our status quo produce better financial results if we continue to do exactly what we're doing so i think the counterfactual is important as well like when we talk about diversity equity and inclusion people will say well what's the business case for dei and you might ask well what's the business case for having a a 95 um uh population of one particular racial identity group there must be a business case you know for having 95 white men in an organization right well maybe maybe not but when we look at what's behind some of the questions there we often need to flip it over and say is it the business case that is preventing us from making change or is it the fact that change is hard i i can sit here and i can assure you given my background in the research that i have done and 30 years of research from others that we do create competitive advantage through human capital management practices but ultimately there will always be people for other reasons who do not want to hear that argument um so i think that it's important also to not hang our hats too heavily on the business case when we can look at the empirical experience of making change in our own organizations and measuring what happens for ourselves you're here i wanted to encourage annie or ellen if you would like to put those key links in the chat one more time i know some of them got lost further up in the chat i don't see any more questions i'll wait a minute to see if any more do come in but i feel like this presentation was really really great especially for small business owners and others that employ people truly valuable well i so appreciate everyone being here today and i i really do encourage folks to um to think about their particular organizations their particular um circumstances even their own workplaces um you know they the people they interact with on a day-to-day basis and to just sort of ask the question where are we strong where is our competitive advantage with our workforce where are the elements of our jobs that are really positive and then build on those strengths but also then look for where are our opportunity areas where are there places we can do something different and many resources out there to to support that change we find some techniques like we mentioned high involvement work processes but there are other strategies like human centered design that have been shown to be effective in creating the kind of change that makes jobs better but even small changes can make a difference for employees and for business performance so we don't need to boil the ocean to make jobs better we have to find a place where we can have impact and make a start because these things build on each other and we often talk about in terms of employee listening and for example conducting a survey that the survey isn't just data gathering the survey is itself an intervention the survey sends a message to employees that we actually want to hear what you have to say we want to know what your concerns are now sometimes employers are hesitant to do this well what if we do a survey and people tell us they want something that we just are not going to do um then we've set ourselves up and we've undermined ourselves well the research actually demonstrates that what really undermines you is when you do the survey and crickets it's not the response that we can't do this that is most damaging it's no response at all so if you conduct that survey you get that feedback and you go back to workers and say these are the things that we heard about your needs your priorities now here are the things that we just can't do at this time we recognize they're important but we can't take this action now here are things that we can do and this is the way we're going to approach figuring out the best way to do that and that's your moment then to engage the creativity of your workforce to say we've heard that this is a priority we need help figuring out how to go about that and we want to engage you in the process of making these changes and even these small changes then build upon themselves improving job quality is a journey not a destination with our work with investors and their portfolio companies we've developed a worthwhile jobs employee survey that measures in less than five minutes where the state of job quality is today at that portfolio company and we use that those survey results to calculate an index score the worthwhile jobs index score when i mention this people often say oh so you can rank them you can say who's got an a and you know who's got an f and our index score is more of like a it's like a pin on a map you are here the most important thing is to know where you are today so that you can track your progress along the journey the rankings as the minute that you create a ranking people will figure out how to game a ranking the important thing is the actual substantive change and going through the process of engaging employees to identify needs and taking steps to change business practices to make jobs better for those best business outcomes so i hope that that is that is helpful as well in thinking about how we measure change and where there are opportunities to look at our own where we are today someone once said to me you know well how do we how will we know how we compare against our competitors um and the question is well do you want to be compared to your competitors or do you want to compare against a standard of excellence we don't want to race to the bottom you know being better than bad is not good so setting a standard of excellence and a goal for oneself and measuring change you know is the best way to achieve those financial outcomes that really is the perfect conclusion and i hope a galvanizing and inspiring call to everyone viewing this that it's time to do that inward search and start taking action to ensure employees are at the best place that they can be thank you so much dr frank miller for being here i'm so thrilled that aspn was able to be the premiere of this presentation for you all and i'm glad that we'll be able to have it up forever as a resource on our site for everyone to come back to if they want to share it or want to refer back to it anytime so many thanks to asbn for hosting um and for being a wonderful resource for companies that really are trying to become more sustainable and find ways to improve job quality and human capital management practices for the benefit of business as well as employees thanks again and thank you everyone for attending it's been a pleasure hosting you all have a great day everybody you