How Will the Business Roundtable Statement Affect the Workforce?
After nearly 200 chief executives from companies including Apple, Pepsi and Walmart redefined what they say is the role of business in society, experts say the Business Roundtable’s Monday statement could actually have an impact on HR and employees issues.
“Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity,” the statement reads. “We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.”
“Yet we know that many Americans are struggling. Too often, hard work is not rewarded, and not enough is being done for workers to adjust to the rapid pace of change in the economy. If companies fail to recognize that the success of our system is dependent on inclusive long-term growth, many will raise legitimate questions about the role of large employers in our society. With these concerns in mind, Business Roundtable is modernizing its principles on the role of a corporation.”
One of the areas addressed in the statement involves investing in employees: “This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.”
John Sumser, editor of HRExaminer.com, says that shifting corporate attention from shareholder value to employee and customer value raises the bar for HR and the emerging discipline of people analytics.
“Outside of rudimentary information about compensation, little is known about how to create value for employees,” he says. “Focusing on the actual exchange of value between employee and employer promises to be the spark that moves HR tech to focus on business outcomes.”
Meanwhile, Peter Cappelli, Wharton professor of management and director of its Center for Human Resources, says the statement is an effort to respond to industry analysts who often resist the idea of spending on employee issues.
“It’s the analysts who don’t want companies to spend on employees,” he says. “Companies that do or feel they need to can point to this for cover from the analysts.”
Cappelli says that, while he doesn’t believe the statement is simply a marketing move, “it may be an effort to head off political pressure by the Democrats. But, I think it will have some real effect, at least in changing the discussion.”
According to the New York Times, the corporate community’s commitment to change is being viewed skeptically on the presidential campaign trail, with Sen. Bernie Sanders saying in an interview that the Business Roundtable was “feeling the pressure from working families all over the country.”
“I don’t believe what they’re saying for a moment,” he said. “If they were sincere, they would talk about raising the minimum wage in this country to a living wage, the need for the rich and powerful to pay their fair share of taxes.”