At Pacific Community Ventures, we’ve seen firsthand though our work with small businesses and impact investors that job creation alone is insufficient to create lasting economic change in underinvested communities. We view the advancement of good-quality jobs as an important avenue to better support our communities and address rising income and wealth inequality across the U.S.
As part of our vision to make good-quality job creation the norm, we have to equip small businesses with the practical tools and resources they need to offer higher-quality jobs in a way that also boost their bottom line and reduce attrition rates. We know that small businesses want to provide good employment opportunities for their workers – but they are often uncertain of how to do so in ways that make sense for their business. In our new toolkit, Good Jobs, Good Business, Pacific Community Ventures offers practical help small business owners create jobs that boost the bottom line.
One of the small business owners we piloted this toolkit with is Jen Musty of Batter Bakery in San Francisco. She’s in an expensive city where retail businesses see a lot of turnover. This past year she introduced health benefits for full-time employees and wanted to cut down on turnover by doing everything she could to make Batter a place where people stay and are happy.
She told us that, “There are a lot of well-intentioned people, foundations, and others who are telling business owners why good jobs are important, but PCV was the only one who approached this from the perspective of a business owner. You can have all the best intentions in the world, but when you’re short two people, the holidays are starting, and oh man!, you’re having a hard time paying yourself, you don’t even know where to start. Resources that don’t speak to business owners won’t get far. I think the toolkit and pilot provide great accountability for business owners – to develop a plan, stick to deadlines, and execute the plan.”
The Future of Retail Work(ers)
More Americans – more than 1 in 10 — work in retail than in manufacturing, the energy sector, or in government. That’s 16 million Americans. Retail workers include salespersons, cashiers, stock clerks, and first-line supervisors and managers. The median annual wages of these employees ranges from $20,160 for cashiers to $38,870 for supervisors/managers. The retail workforce is slightly more female, African-American, and Hispanic than the overall workforce.
For workers earning less than $50,000 annually, the typical cost of turnover is 16-20% of an employee’s annual salary. The estimated cost to replace a $10-per-hour retail employee is approximately $3,300. Successfully engaging employees means they’re more likely to stay at—and grow with your business. Lower turnover helps to reduce the costs of training and hiring.
Small businesses operate in an increasingly competitive market, especially with rising minimum wages and a growing number of laws related to workers’ rights to stable schedules and paid leave. Proactively taking steps such as raising wages, providing scheduling that works for your employees and your business, and streamlining operations can help your business provide exceptional customer service and enable you to readily adapt to market- and legislation-based changes. While raising wages and offering more expansive health and retirement benefits aren’t always possible for every small business right away, every employer can take steps to prioritize employee engagement. Employee turnover can be a financial burden to your business.
Over the last two years we have worked with the Workforce Strategies Initiative at the Aspen Institute to develop, pilot, and publish a quality jobs toolkit that came to be called Good Jobs, Good Business (GJGB). The GJGB toolkit was developed with a retail focus as part of grant funding under the Aspen Reimagine Retail Initiative, but contains content that can be used by any small business. Over the second half of 2017, PCV worked with small businesses in our own loan fund and with small businesses of partner CDFIs across the country to pilot the resource and determine how the toolkit could be improved.
How CDFIs and Impact Investors
Can Benefit From Good Jobs, Good Business
As we showed in our first-of—its-kind measurable definition of a quality job, creating good jobs should not be viewed as a static goal, but rather as a continuous journey. Investors and the businesses they support should strive to foster incremental improvements in job quality, raising standards in deliberate yet meaningful ways for employees. Businesses and investors should also view the fostering of quality jobs as an ongoing process.
The incorporation of job quality as part of the deployment of capital in our communities has many benefits. Improving job quality for workers can help businesses in achieving better financial results and have a ripple effect on local economic growth. At the same time, we can’t expect business owners to shoulder the costs and responsibility of improving job quality without providing them with tools and free advising on how to do it.
In reflecting on the positive reception and constructive feedback we received through the toolkit pilot, the growing interest of CDFIs and others in focusing on the issue of job quality as a way to address escalating wealth and income inequality, and on the challenges small business owners face in hiring and retaining employees in a low-unemployment economy, we believe there is significant opportunity to reach more small businesses across the country to help them grow their business and improve job quality.
A central way that Good Jobs, Good Business can advance job quality nationally is to support capacity building among CDFIs and other small business intermediaries (impact investors, workforce development organizations, etc.) to integrate the GJGB toolkit into their work with small businesses through ongoing support from PCV and access to PCV’s business advising platform.
The post How CDFIs and Impact Investors Can Walk The Talk On ‘Good Jobs’ appeared first on Pacific Community Ventures.
The full and original article can be viewed on PacificCommunityVentures.org
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