What sustainability looks like for employee relations

On May 1, the world celebrated May Day, also called Workers’ Day or International Workers’ Day. The day recognizes the efforts of workers in pursuing equitable and safe working conditions, with a crowning achievement of course being the implementation of the 8 hour working day.

Since the first May Day in 1886, we have seen significant progress. In Canada, various pieces of national and provincial legislation protect rights such as the ability to join a trade union, the right to a safe workplace, and the right to fair treatment and freedom from discrimination.

These laws have made it easier for diverse and minority populations to progress their careers. However, it is inarguable that there is still a long way to go. Canadian women still earn 75 cents for every dollar Canadian men make. This drops to 65 cents for indigenous women and 67 cents for racialized women. Black men earn 87 cents on the dollar.

The current pandemic has laid bare these inequities in tragic ways. Low income workers often don’t have access to benefits such as sick leave, and when the social safety net doesn’t equate to minimum wage, they frequently opt to go to work sick, in order to continue to support their families. Compounding the issue is that many of these workers live in cramped conditions, thanks to the spiralling cost of housing in Canadian cities. The disproportionate impact of economic hardship, illness and death in these communities has left many questioning the systems we thought protected the most vulnerable.

This is where ESG sustainability can make a tangible social impact. The ‘S’ in ESG of course stands for ‘social’ sustainability, and refers to creating societies that support the needs of today’s citizens, without detracting from the ability of future citizens to meet their own needs.

By implementing effective social practices, businesses can support a more sustainable society, and build a strong workplace culture and profitable business in the process. What does this look like? Businesses with leading ESG practices generally have:

• A fair living wage: They recognize that minimum wage doesn’t always align with the cost of living, and ensure that all workers can meet the basic requirements of living in the communities in which they operate.

• Benefits that support the whole person: Employees are human beings first, and that means they can get sick, become pregnant, or need to support a loved one. Businesses that provide benefits such as sick leave, carer’s leave and health insurance are not only contributing to their societies, but boost loyalty and productivity in the process.

• Genuine opportunities to learn and progress: Leading workplaces create pathways for employees to learn new skills and grow their careers. They recognize the role that unconscious bias and systemic barriers can play in limiting opportunities, and actively and transparently address these.

A frequent objection to social sustainability programs by employers is that they can seem expensive. And yes, there is certainly an upfront cost. However, businesses that have been investing in their employees’ wellbeing notice that the costs are recouped -and then some- in the benefits realized through reduced turnover, greater productivity and stronger culture. For example, the average cost of turnover is about $18,000 per employee in Canada. With average turnover at 21% annually, a business with 100 employees would be looking at $378,000 per year just to replace departing staff. When you consider that highly engaged teams see 21% greater profitability and significantly reduced turnover, you can start to see that the upfront expenses are more investment than sunk cost.

We can’t consider ourselves a sustainable society if we are turning a blind eye to those left behind. ‘Bootstrap’ ideology only goes so far: hard work and commitment are important, but they can’t overcome the institutional and systemic barriers to social progress, without those barriers being actively dismantled by those with the power to do so. Organizations that are led by their values, and seek out opportunities for their employees to succeed as humans as well as workers, will be the ones that create the most value in the post-Covid world.

And that, really, is the true spirit of May Day.