Companies that support their workers do better financially in the long run, according to Just Capital’s CEO Martin Whittaker.
″Business today is all about how do you create value for stakeholders overall and then how does that drive my company’s success,” he told CNBC’s Work Summit on Wednesday. ”… We’re seeing that now with all of our data, all of our indices over the years. Companies that do right by their stakeholders, do better financially.”
Employers face perhaps one of their biggest financial threats in years as fears of a looming recession rattle Wall Street and the American workforce. Many companies and popular big technology names that expanded rapidly during the pandemic are paring back their workforces, cutting jobs and, in some cases, employee benefits.
How companies grapple with this new environment is key to their current — and future — performance, Whittaker said.
Companies that “do right” by their workers invest in good benefits, training and community building. Those names tend to perform better financially, as evidenced by how they fared during the pandemic lockdowns and reopening.
The backbone of the strategy starts with paying a fair and living wage, which can better engage workers and boost productivity, he said. It extends to conducting layoffs in what Whittaker called a “just” manner, including what companies offer as severance.
Whittaker points to Alphabet, Microsoft, PayPal and Verizon as some of the companies aggressively investing in their stakeholders.
“As we get into 2023 and fears of a recession and layoff loom, I just urge companies to really think about how to do that in a just way,” he said.
