Consumers Need Brands to Protect Employee Health First

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Kim Walker

Array Kim Walker
Fellow at Atlantic Re:think

May 19, 2020 | Array

Grocery store clerks, delivery drivers, factory workers, and janitorial staff have all earned the title “frontline heroes” for holding vital infrastructure in place and showing up to work in the midst of a global pandemic. 

Over the last few months, the public’s attention has become fixed on the ways businesses have protected, or failed to protect, their essential workers during this crisis. As a result of this increased scrutiny, supporting the physical, financial, and mental wellbeing of employees across every level of an organization will become a defining feature of brand resilience through the pandemic and beyond.

The economic fallout from COVID-19 has tested business priorities across all industries and pushed the U.S. unemployment rate past 20 percent. As governments relax lockdown regulations in some areas, the burden falls on private sector leaders to weigh the cost of keeping offices and storefronts closed against the enduring threat of disease spread. Tough questions pop up: Is there a way to resume operations safely? What can we make work financially? If we fail on any front, who suffers?

The Good, The Bad, The Ugly

Employee mistreatment horror stories have spawned bad press for businesses in the past, but today they fill an especially large space in the public consciousness. Workplace safety is top of mind for consumers, in part because of the communal nature of the virus—which, if spread in any community, jeopardizes others. Company policies around employee paid time off (PTO), workplace safety and paid sick leave now have direct public health implications. This added weight amplifies the voices of vulnerable workforces. 

In Amazon warehouses, which have come under fire in the past for aggressive productivity quotas and compromising worker safety, outbreaks have brought the company’s COVID-19 response into question, sparking protests and prompting corporate employees to organize behind their blue collar colleagues. Increased need for Amazon’s delivery service has given these workers leverage, eventually compelling Amazon to raise wages and adjust sick leave policies. Still, an inconsistent response and accusations of retaliation against organizers have kept Amazon in the news cycle and playing defense.

In contrast, brands that have been proactive in prioritizing the safety and financial security of their employees demonstrate resilience while earning public trust. Patagonia shuttered its stores and offices mid-March, pledging to continue paying its employees. 

Similar priorities carried Patagonia through the Great Recession. In 2008, it did not opt to cut costs and preserved employee health care, onsite childcare, and training and development. In the years following, it invested in sustainability initiatives and could market its values with credibility. By 2012, while consumer spending still slumped in the economic downturn, Patagonia had doubled revenue and tripled profit. By acting on consistent principles regardless of the financial outlook, Patagonia has built a reputation as a values-driven brand and won themselves decades of fierce customer loyalty.

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Of course, Amazon and Patagonia can’t be directly compared. Public needs today demand some industries scale up, necessitating strain and learning curves for employers who can’t simply send their staff home. Still, some brands providing essential services have successfully adopted policies prioritizing the health and security of their workforces above all else.

Lowe’s falls into this group. On its website, the home improvement store outlines internal COVID-19 response initiatives above monetary donations and community outreach. These include free personal protective equipment (PPE) for employees, raises and bonuses, expansion of paid leave, and infrastructure to enforce in-store social distancing. Through its actions and messaging, Lowe’s is communicating to customers its services do not come at the cost of anyone’s safety or livelihood.

The meatpacking industry is in the hot seat for paying that cost. As clustered outbreaks in processing plants threaten supply chains, the breakdown reveals the foundational weakness of undervaluing human capital. Absenteeism and state inspections have forced companies like JBS, an American food processing company, to temporarily slow or shut down facilities designed explicitly for mass production in minimal space (to lessen cooling expenses). Some companies have responded by raising wages or implementing staggered shifts. 

Whether or not the pandemic becomes a reckoning for the industry to reevaluate its labor practices, consumers are watching. In the meantime, others can take advantage of the lesson learned: When employees are vulnerable, business is vulnerable. 

People Over Profit

The crisis reinforces a global trend toward stakeholder capitalism, the principle that dominated the 2020 World Economic Forum in Davos and defines a company’s purpose as providing sustained value to all its stakeholders—suppliers, customers, employees, local communities and shareholders. In theory, everyone wins. This approach was gaining traction before COVID-19, as generations of ethical consumers compel companies to consider how they can build brand loyalty when ethical drivers are three times more important than competence to consumer trust.

While corporations and consumers struggle to navigate an uncertain present extending into an uncertain future, an anxious public will gravitate toward the literal and figurative safety of brands who consistently prioritize people over profits. JUST Capital, which keeps a COVID-19 corporate response tracker, found companies that are best supporting their workers now are already outperforming their competitors financially. This speaks to the longevity of a stakeholder-centric—rather than a shareholder-centric—business model. 

Whether it’s inconsistent enforcement of social distancing, financial desperation compelling coworkers to show up to shifts despite exposure, or a lack of access to PPE—if employees feel afraid to work, customers will feel afraid to buy. When polling Americans on how companies should prioritize actions, JUST Capital found: 91 percent of respondents felt companies should make safe work environments a high priority. 88 percent said employers should provide PPE, and over 70 percent of respondents believed paid sick leave, hazard pay, and flexible work arrangements for caregivers should also be high priorities. 

Credibility Doesn’t Cut Corners

In a global economic downturn, that level of responsibility may seem daunting. For industries most impacted by stay-at-home orders like the arts, travel, live events, or hospitality, tough choices are inevitable. Still, there are ways for brand leaders to face financial realities without sacrificing humanity. The Wing, a women’s coworking space, had to toe that line when closed spaces and suspended membership fees led to a 95 percent revenue loss. It implemented mass layoffs, a measure difficult to align with brand values of community support and women’s empowerment. 

However, when communicating the choice, Wing cofounders Lauren Kassan and Audrey Gelman outlined plans to pay laid-off employees two-months severance, accrued PTO, and offer insurance through June. In an open letter to The Wing community, they were transparent about the financial circumstances necessitating their decision and additional sacrifices they made, including forgoing their own salaries and adjusting salaries for leadership. 

The letter, candid and backed by action, maps a way forward for brands in financial jeopardy to retain long term credibility and bounce back when their services are in demand again. Abstaining from resuming business if it can’t be done safely, protecting the livelihoods and healthcare benefits of employees to the full extent possible, and opting to double down on its digital offerings sets The Wing up to continue growing its community with integrity through the pandemic and to emerge resilient on the other side.

Invest Inward

As countries and states relax lockdowns and consumers tentatively poke their heads out of their front doors, the private sector must grapple with how to move forward. 

The unknowns may feel paralyzing with economies in flux and an ever changing COVID-19 timeline. Corporate leaders can combat external unknowns by focusing their priorities inward. Whether that means investing in infrastructure to guarantee a safe work environment or extending financial support for staff, brands can brace themselves against short term losses while developing, executing, and communicating a plan that promises to protect their people above all else. 

Internal stability translates to resilience, helping consumers feel safe sticking with a brand through good times and bad.

bronson.avila
Kim Walker

Kim Walker

Fellow at Atlantic Re:think

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