Platitudes aside, let’s be honest. It’s time for corporate America to step up. We’ve been inundated with messages denouncing racism, and commitments for greater diversity and inclusion but where do we go from here? Pledges and donations are important, but not enough. CEOs are uniquely positioned to level the playing field for all; aligning interests of all stakeholders with those of your shareholders isn’t mutually exclusive. It’s just good business.
Economist Greg Mankiw recently stated that corporate executives are ill-equipped to tackle greater social issues through business strategy. I respectfully disagree. CEOs are well aware of how policy, the economy, education, poverty, sustainability, and the like impact their organizations. Unfortunately, shareholder primacy and the quarterly earnings cycle force them to be short-term profit-oriented, which often comes at the expense of everything else.
Now more than ever, companies must consider their role in the communities where they do business. If the pandemic has taught us anything, it’s how symbiotic and connected we really are – business goes as employees go, as consumers go, and as communities go. And, in our new normal, CEOs must consider this when planning for long-term growth. How will you attract and retain talent? How will you engage and motivate your workforce? What will your customers demand? How will you sell your products and/or services? What is your value proposition?
Of course, corporate America can’t solve all of society’s problems. However, executives should ask themselves how their companies can address social issues in the context of how and where they operate. Let’s address economic inequality, for instance. Recent racial tensions and the disproportionate impact of COVID on our most vulnerable citizens – the poor, the disenfranchised – simply have highlighted a disease that has been there all along. How do we eradicate it? By offering equal opportunity to people, regardless of who they are and where they come from. Greyston has been doing it successfully through Open Hiring® for nearly 40 years.
Open Hiring – offering employment with no questions asked, no resumes, no interviews, and no background checks – provides a path forward to millions denied jobs due to unnecessary screening practices. It not just about assisting people who are trying to climb the ladder; it’s helping those trying to find the ladder, whether their experiences have involved homelessness, recovery, lack of work experience, or incarceration.
Naysayers will say there’s a lot of risk in hiring people with no questions asked. The fact is, traditional hiring processes do not guarantee future job performance. Further, they’re expensive; the Society for Human Resource Management reports companies spend about $4,100 per hire and many of those individuals simply “don’t work out.” Also consider the risk of not hiring people facing barriers to employment, such as the formerly incarcerated. We have roughly 700,000 people returning from justice involvement annually; studies show that many who don’t find a job within the first 90 days out of prison end up back in jail. The cost of denying these individuals access to something as basic as a job is staggering. We perpetuate poverty, we contribute to broken families, and fuel hopelessness, while pouring money into things like tighter law enforcement and corrections that produce no economic value.
We must double down on extending opportunities to those who need them the most. Open Hiring is a win-win proposition yielding millions in positive economic impact in Greyston’s hometown of Southwest Yonkers and providing hundreds of jobs to the hardest to employ. We estimate that, via employing and providing workforce development/job training assistance to local residents, we generate $4.3 million in public savings annually. Meanwhile, other Open Hiring employers, like The Body Shop, have both reduced turnover and increased productivity dramatically. At its North Carolina fulfilment center, The Body Shop has seen a 13% increase in productivity and 63% reduction in turnover year-over-year. This is the future of work: being innovative with human capital management and intentional about creating a more inclusive workforce.
If you agree that black lives matter and plan to increase the number of minorities in your workforce by X% by whatever year, I’m glad. But what are you really trying to accomplish? Are you taking action to create equal opportunity, or are you simply treating a symptom because it’s the cause du jour? Open Hiring is a relatively simple means to hold corporations to what they say. And, it presents a compelling value proposition: helping underserved individuals and communities to thrive while fueling the bottom line.
If you view your company’s response to the current social climate as just a PR problem, be honest. Acknowledge the issue, say you don’t know how to solve it, and support those working to create real change. But remember that consumers are looking for social impact and purpose, especially the younger generation. It’s not enough to simply make pledges; it’s time to walk the walk.
Whether you call it conscious capitalism, corporate citizenship, or CSR, shared prosperity creates real value and will sustain your business over the long term. A good start is to extend job opportunities to those who are so often left behind.