Supporting Workers Helps Support the Economy
Apr 06, 2012
The March employment report released this morning by the Bureau of Labor Statistics shows the economy is growing, but at a rate that means pre-recession unemployment levels are still a ways off. Last month, the economy added 120,000 jobs. While economic growth is critical, it is equally important that these jobs are of good quality, earning benefits and wages that can support working families. This is important for both workers and employers alike.
The economy is shifting toward low-wage jobs, meaning that many of the jobs being created not only pay lower wages, but are unstable and offer few benefits or flexibility for workers. Many workplaces do not have the policies in place that workers need to maintain stable employment. Data shows 23 percent of adults report that they have lost a job or were told they would lose their job if they took time off due to personal or family illness. When workers lose jobs for the wrong reasons, it unnecessarily costs families security and stability. It can also end up costing employers money.
In the fall of 2011, CLASP and the Center for Economic and Policy Research (CEPR) released a turnover calculator to help employers calculate how much it costs them when they lose an employee. The tool was inspired by a 2011 report, Leaves that Pay, which was based on interviews with employers - many of whom had no idea how much turnover was actually costing them. Once employers know these costs they can make more informed business decisions.
As CEPR's Eileen Appelbaum noted in this month's BNA Human Resources Report, "[t]hat's why ‘good employers' such as Johnson & Johnson, Wells Fargo, and Deloitte & Touche have paid sick days and generous leave policies. They know they reduce turnover and increase morale and employee loyalty, and this is very valuable." Just today Deloitte & Touche's CEO, Joe Echevarria, spoke at the White House Forum on Women and the Economy about the benefits that workplace flexibility and programs like paid leave have provided for his business. But there are too many employers who simply do not know how much turnover costs them and the value good policies like paid leave can have for workers.
By providing employment benefits that promote retention, employers benefit by saving money and employees benefit by not losing their economic livelihood when they are too sick to make it into work or need to care for an ill family member, for instance .
In the current economic climate, businesses are making difficult decisions. The CLASP-CEPR turnover calculator can help them determine the true costs of laying off or terminating employees, which can be a short-sighted solution. As the economy picks up steam, businesses with a strong and committed workforce will be the winners in the long run.