On-site exercise equipment. Paid volunteer time. A wall of baking tools you can borrow. These may sound like the perks some flush tech companies extend to their engineers.
But as Alana Semuels of The Atlantic reports, they’re actually some of the benefits of working at King Arthur Flour, one of a group of companies that are trying to make worker well-being a priority. In a corporate climate many see as obsessed with profit (at most companies, Ms. Semuels writes, “employees come last”), will making workers happy ever be mainstream?
King Arthur, Ms. Semuels explains, is a B-corporation. In order to be certified as such, she writes, “the companies pledge to think about people and the planet in addition to profit, and an outside nonprofit inspects them and makes sure they’re doing so.”
“This used to be the standard way American companies treated their employees,” Ms. Semuels writes. “In the heady, post-World War II years, companies offered free turkeys at Thanksgiving and gave employees perks, hoping to recruit and retain the most talented workers. But as the pool of available labor grew, companies figured out that they didn’t need to keep employees for life: If one person left, they could hire someone else. And as activist investors pushed companies to downsize and distribute profits back to shareholders, many employers gave up on considering the needs of their employees when deciding how to run their business.”
Some B-corporations are trying to reintroduce a focus on employee welfare, and the approach may be good for business. “Zeynep Ton, an MIT professor, found that companies that look out for long-term employee happiness can actually be more efficient and profitable,” Ms. Semuels says — and her visit to King Arthur’s facility gave her the sense “that perhaps employees cared a little bit more because they knew they had good jobs.”
Still, she notes, King Arthur is employee-owned, and succeeding as a public B-corporation could be a challenge. She mentions Rally Software, whose stock has fallen below $10 from a high of $31: “Rally gets a higher-than-average score among B-corps for how it treats its workers, but every financial report is picked apart by investors looking at its short-term potential, who may then advise clients to get rid of stock if business slows.”
Can B-corps treat their workers decently and still survive? At The New Yorker, James Surowiecki offers a certain amount of optimism. He notes that being a B-corp can offer companies certain protections:
“Most C.E.O.s feel huge pressure to maximize shareholder value. At a B-corp, though, shareholders are just one constituency. Patagonia doesn’t need to worry about investors’ opposing its environmental work, because that work is simply part of the job. For similar reasons, benefit corporations are far less vulnerable to hostile takeovers.” He writes that social responsibility can be “an important way for a company to attract and retain talented employees. Survey data show that workers — especially young ones — want to work for socially conscious companies, and will take less compensation in exchange for a greater sense of purpose.”
Like Ms. Semuels, he points to the past:
“The desire to balance profit and purpose is arguably a return to the model that many American companies once followed. Henry Ford declared that, instead of boosting dividends, he’d rather use the money to build better cars and pay better wages. And Johnson & Johnson’s credo, written in 1943, stated that the company’s ‘first responsibility’ was not to investors but to doctors, nurses, and patients.”
And, he writes, “the rise of B-corps is a reminder that the idea that corporations should be only lean, mean, profit-maximizing machines isn’t dictated by the inherent nature of capitalism, let alone by human nature.”
But to many, that idea still seems to dominate. In his call for overhauling overtime rules at Politico, Nick Hanauer argues that we live in exceptionally profit-maximizing times: “From 1950 to 1980, during the good old days of U.S. economic might — the era in which the Great American Middle Class was created — corporate profits averaged a healthy 6 percent of GDP. But since then, corporate profits have doubled to more than 12 percent of GDP.”
That increase in profit, he writes, “could have been spent on your wages. Or it could have gone into discounts to you, the consumer. We capitalists will tell you that our increasing profits are the result of some complex economic force with the immutability and righteousness of divine law. But the truth is, it is simply a result of a difference in negotiating power. As in, we have it. And you don’t.”
If company owners hold all the power, will very many of them really decide to give employees paid volunteer time if it cuts into profits? Will the business advantages of keeping workers happy really be enough to make it a priority for C.E.O.s? And will focusing on employee happiness really become popular if American companies are, as some fear, moving away from employees entirely?
At The New Republic, Noam Scheiber writes about Wonolo, which he calls a “worker-on-demand startup.” It matches companies up with temporary workers who can come in on short notice to fill unanticipated holes: “Suppose, for example, that an online retailer suddenly realizes it’s short a few order-fulfillment jockeys — the people who roam warehouses and locate the goods that need to be boxed and shipped. The retailer can post the jobs on Wonolo and bulk up its workforce that same day.”
It’s possible, Mr. Scheiber notes, that Wonolo gigs could lead to full-time work for some at the companies they’re matched with. But, Mr. Scheiber writes, “if platforms like Wonolo catch on, companies will begin to restructure their entire workforce to take advantage of them. As Susan Houseman, a labor economist at the Upjohn Institute, points out, companies historically built their staffs to handle their peak loads.” Now, though, “companies have become increasingly sophisticated at figuring out when demand will peak, and staffing up only for those moments.” And Wonolo and its ilk, he writes, could make this approach even more common.
“Worker-on-demand” apps, he writes, “make it frighteningly easy for companies to outsource work. If the model catches on, most companies may one day employ only a small cadre of full-timers, which they beef up with freelancers as the need arises.”
For their supporters, B-corporations may offer significant benefits to those employed there. But Mr. Scheiber envisions a future where few of us are employed full-time anywhere, and where we instead move from place to place depending on various companies’ changing needs. And if that happens, the perks any one company offers may not matter so much.