Episode Transcript
Speaker 1 00:00:11 Hello everyone today. I want to talk about a really important topic, corporate citizenship, and why it really matters in this particular time. It was a pretty interesting week. We have potentially a war in Europe, tremendous economic growth, amazing growth in jobs. Very, very tight labor market wages going up is becoming ever more difficult to hire. I've mentioned multiple times. The coffee shops in my neighborhood are all closed because they can't find enough people, which is pretty amazing. Every company I talk to and I talked to six large organizations this week is freaked out about hiring retention, burnout, employee experience, and asking, what do I do? Do I raise wages? Do I give people more vacation time? Do I create a more flexible work experience? Do I add more benefits? Do I need a wellbeing program? Do I improve career development? Do I spend more money on training?
Speaker 1 00:01:07 The answer is yes, you have to do all of that. And the reason is simply that the balance of power and the economy is shifting towards workers. And that's perfectly fine because workers do great things. It's the employees that make your company. And so moving money in your balance sheet, into the labor column or labor investment column, whatever you want to call, it is a good thing. Now on the issue of wages, which I get asked about continuously, yes, you have to pay people more money. Pay is an individual thing for every worker. Every employee essentially has own mini market for pay based on what they made at their last job and where they live and their personal needs and expectations. So it isn't a question of minimum wage or maximum wage or standard wages. It's a question of required wage. What do I need to pay people to get them, to take this job and be happy?
Speaker 1 00:02:02 And that number is going to be individual by person. And it's gonna be a little bit higher than it was in the past. An interesting conversation with one of the benefits leaders at Amazon this week. And she said at Amazon, they have a very standard pay structure and it isn't very high people don't make a lot of money there, but they pile on lots and lots of stock options to reward people for high performance. And she said, we get a lot of job candidates, especially software engineers who say, I don't care about the stock options. I just wanna hire salary and otherwise I'm leaving. And they have a very high turnover as a result. And I think most of you probably don't wanna run your companies that way. But the really big news to me is something completely different. And it's the Edelman trust index.
Speaker 1 00:02:47 Now, Edelman is a pretty amazing PR firm. I don't know what they do for PR, but the, one of the most fascinating things they do is a continuous semi-annual or annual study of citizenship trust around the world. And it's a very, very valuable thing to read for you as a manager leader, an HR person, and I'll put a link in the notes on how to find, find it. And this year's results are really shocking. And I mean, it they're really shocking around the world, in every developed economy with the exception. One which I'll talk about in a minute trust has plummeted. People do not trust the government. They do not trust the media. They do trust business to some degree, and they do trust non-government organizations, but the government has plummeted. And the essential reason is two things. First poll IANS have decided to separate us from each other, play tribal wars to get votes.
Speaker 1 00:03:45 And therefore we don't know if we can believe them. The second is the government is rated as an incompetent factor in our lives. And I have to say, I feel this way too. Most governments have not done a good job of managing the pandemic. We get conflicting information from the government every day, even Tony Fauci, isn't completely clear when he makes his statements about what to do with the pandemic. We've had highly varied response from almost two years and it's continuing. And all of the other things the government is supposed to do seen him to be lagging in the United States. We have a trillion dollars or so was invested towards infrastructure in my neighborhood. There are more potholes than I have ever seen in my life. It's almost dangerous for me to go out and ride my bike and right around the corner from my house is a construction project at the big intersection next to three schools that was supposed to be finished in October.
Speaker 1 00:04:43 And it isn't even half finished. In fact, they don't even work on it. It just sits there. I'm not even sure any work's going on at all. And of course, every day when I walk out or drive by that project, I think to myself, what's going on over there. And we all have those experiences. Now it's interesting that the media plummeted in trust during the transition from the Trump administration to the Biden administration in the United States, we were hoping that the concept of fake news would go away. Well, fake news is actually real. Now we all kind of thought it was a joke when the Trump administration started talking about it, but now it's actually real. The media in most cases makes money through advertising. So their motivation is to get clicks. And so they write controversial articles, pinpointed towards one side of the political aisle that they serve.
Speaker 1 00:05:37 And that's the way they make more money, which means that we don't really believe what they say either in my case, because I'm a little bit more of a left wing person. Although I certainly have a lot of right wing tendencies too. I read the New York times and I love the New York times, but there are times when I look at it and I say, they're definitely tilting the windmill here on some of their positions and some of the types of articles and the way they criticize things from a left wing standpoint. And then I flip over the wall street journal and I hear the exact opposite side of the same story. So what am I to believe? I guess I really can't believe either of them for being fully accurate, even though they both like to talk about the most trusted news source in the world, CNN claims to be the most trusted Fox claims to be the most trusted is really kind of a joke.
Speaker 1 00:06:25 And that's what the Edelman index tells us. Now, if you listen to the video by Edelman, it's really pretty depressing because this problem of the separation and the distrust of government and media means that we don't really have valuable sources of information. If you read the bureau of labor statistics data, or you read information about what's going on in Ukraine, or you read information about what's going on in Congress, you hope that the information from the government is true, but honestly, given the sense of distrust that's going on. A lot of people don't believe that. In fact, one of the things that the Edelman research found is that Republicans and Democrats are almost similarly mistrustful of the government, but in both cases, when either side read more sources and has focus and investment in gaining information, they become more trustful. In other words, all of us as citizens have to become curators and very good analyzers of the information we get.
Speaker 1 00:07:34 So we make sure that we can come to some trusted point in the information in our lives. Now, the third part of the Edelman research is something that's happened in many of their studies. And that is that business leaders are the most trusted of the three NGOs are even more trusted. And so the point that Edelman makes is that business leaders can no longer afford to be on the sidelines. I've written about this before. I'll, I'll post an article on citizenship. I wrote a couple of years ago. We as business leaders, as managers, as supervisors, as executives have to take a position on making the world better because we're the ones that people listen to. And we're the ones that are considered competent. If you think about why business leaders are trusted, it's not really that people like them. I mean, I don't think Elon Musk is necessarily a personally liked character, but people really are amazed at what he's accomplished.
Speaker 1 00:08:33 He's an extremely successful person. He's created an entire new industry. He's helping solve global one warming. And he's built an amazing company, same for Jeff Bezos and all the other tech executives that you may or may not like, yes, maybe they've done some things wrong and they're learning in the process, but we trust them because they get things done. And that is largely missing in the government because governments in general, particularly democratic governments are not very good at solving crises. Now, interestingly enough, the one country where citizens really trust their government is China. China's trust of the government is almost twice as high as all of the democratic countries. And the reason for that is the Chinese government is a prescribed, directed organization. They make the decisions and they carry them out. I'm not saying that's good or bad, but that's just the way it is.
Speaker 1 00:09:31 So what does all this mean for us in the business community? It pretty much means that citizenship purpose, mission and values are a strategic part of your value proposition to employees. And not only to employees, to customers and to stakeholders more than 60% of consumers or customers or buyers of your product and service will not business with you. If they don't think your company is doing a good job to improve racial issues in the country, global warming or income inequality. I mean, that's a lot, that's a big impact. And the CEO and the top executives reflect those strategies. So they have to be comfortable talking a about those issues. The second part of it, of course, is employees, employees at a higher level, it's greater than 60%. Also don't wanna work for a company that is not taking care of the environment, taking care of racial equity and operating in an equitable way and taking care of pay and paying people fairly.
Speaker 1 00:10:35 In fact, when we studied employee experience last year, for those of you who read the essential guide of the 80 or 90 things we discussed to try to identify what drove a great employee experience by far the sense of trust, inclusion, belonging, teamwork, and individual respect and psychological safety scored higher, far higher than everything else. In fact, several of the companies I talked to this week were very frustrated at the turnover they had and the level of burnout of their employees. And they were really asking me very seriously, tell us what to do. And the answer I gave to both of them was really along these lines, people leave your company. They may claim to leave because of pay or maybe because they can't grow or maybe their relationship with their manager, isn't as good as they'd like it to be. But at the bottom of it all, they've basically voted with their feet that they no longer trust your organization.
Speaker 1 00:11:33 They don't think you're gonna take them to the place they want to go. You're not listening of them. And there's something going on in the company that they don't feel is going on. Well, when I analyze trust and talk to companies about trust for many years, I pretty much come to the conclusion that trust comes down to three things. The first is competence people, don't trust organizations that don't perform well. As I've mentioned many times, if the flight is always late, you don't trust the airline. And you begin to wonder if the airline is safe. The second element of trust is ethics. Is this company fair? Is my pay fair to the person sitting next to me, are the decisions being made on who to promote being done in a fair way and on and on and on. And the third is the sense of listening.
Speaker 1 00:12:24 Does this company or this organization, or this team, or this manager care about me? Do I have an opportunity to speak up? If I do speak up the company, do something about it. And those issues of trust are not necessarily easy to address, but those are the reasons people usually leave companies. I know the research team at great place to work. And so they've been studying these kinds of issues for many years. And Marcus who runs the research group there told me that of all of the things that contribute to great places to work trust is always number one. Where does all this leave us? I have to say I was a little bit depressed listening to Richard Edelman. Talk about the findings of the study because there is some potential chance that we end up with a lot of political instability in certain countries around the world.
Speaker 1 00:13:12 But the calling message to me is that we in HR and in business leadership and in management really have to take these issues seriously. We have to remember that we have an outsized role in all employees lives. What we say, how we operate, where we prioritize our time has to be done in a trusted way. Competence, ethics, and list have to take a priority in every conversation, every decision, every project, every relationship that we have at work, you know, as Ford motor told us their entire management philosophy is now focused on care care for the individual. And I think that's a really solid idea that if we don't practice human to leadership and make sure that our organization is trusted in the community and in the environment, not just among employees, we're gonna probably have a company that people don't want to work for, or we're gonna suffer high turnover or difficulty in hiring.
Speaker 1 00:14:10 Now, as far as the political environment, most senior leaders don't want to play politics. And I don't think element is telling us that we all have to pick sides. Rather, what he is saying is that if you think about the fact that your company is in a way in institution, and I think companies are really like internal communities take good care of your institution, take good care of your community, make sure that your community is fair, healthy, and the people are getting the benefits they want. Even though the roads up up the street from me may not get fixed for many more months inside your company, you can fix things pretty quickly. And that's really the philosophy that I think will drive success. There's a lot more to read on this topic and I'll give you a couple of links, but think about it in your company, as you hire and retain and think about pay in the next couple years. I think this issue of citizenship and all of its aspects is a really valuable role that we play in HR and as business leaders and is important. One to think about in the.
