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A living wage benefits both the employee and the employer

This column is part of Globe Careers' Leadership Lab series, where executives and experts share their views and advice about leadership and management. Follow us at @Globe_Careers. Find all Leadership Lab stories at tgam.ca/leadershiplab.

For environmental engineering firm Enviro-Stewards Inc., a human resources commitment to providing good quality, full-time jobs with decent wages and reasonable work-life balance translated into new business with Maple Leaf Foods.

The engineering consultancy was working with Maple Leaf to reduce water and energy consumption at a few of its plants, "and they told us that every Enviro-Stewards person they dealt with had been phenomenal – the team was consistently excellent. Based on that they hired us to work on 22 other facilities across Canada," said president Bruce Taylor. "You can't build teams like that if you've got turnover." Especially the kind of high turnover associated with precarious employment – part-time, contract or temporary work that leaves employees stressed out and looking for better opportunities.

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But, while the Elmira, Ont.-based Enviro-Stewards Inc. and other community-minded employers like Toronto's Duca Financial Services Credit Union have made a business decision to provide full-time jobs with living wages and benefits, many Ontario organizations are doing the opposite – cutting costs by replacing full-time workers with cheaper contract, part-time or temporary labour with little to no benefits.

However, they may be swapping short-term gains for a stressed-out, anxious, less productive and disengaged workforce that's desperate to leave for more secure employment.

It's a trade-off that could affect both an organization's bottom line and the health and well-being of Ontario workers, their families and communities, according to a recent panel on precarious work at the Human Resources Professionals Association's (HRPA) recent 2016 Annual Conference in Toronto.

According to a 2015 United Way study (The Precarious Penalty), more than 50 per cent of GTA workers are now employed in precarious jobs, "with significant negative consequences for both employees and employers," says panelist Angelo DiCaro a researcher at Canadian private sector union Unifor. "Life becomes more stressful for workers who aren't sure if their contract will be renewed, whether they'll earn enough income to pay the bills. Precarious workers face greater anxiety, poorer health and engage less in personal development and community life.

"This is the double-edged sword for employers: Greater insecurity will often foster a less productive, disengaged workforce. And, as popular opinion continues to shine a positive light on socially-responsible employers, the push for short-term profit gains at the expense of good, stable jobs can, in turn, inflict long-term damage on an employer's brand."

What makes a good job?

A good job, according to panelists, is one that provides the security of fair wages, benefits, job security and a regular schedule; plus a sense of purpose and fulfilment and "the opportunity to be involved and engaged in making a difference in helping the company and teams achieve their mission," says Helmi Ansari, chief sustainability and innovation officer with Grosche International Inc.

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"A good job should provide a standard of living that enables a decent family and personal life and allows us to move up as much as possible," says panelist Michelynn Laflèche, a director of research, public policy and evaluation at United Way Toronto & York Region.

It's a standard that Duca Financial Services Credit Union committed to recently when it signed on as Toronto's first Living Wage employer – a movement to pay wages sufficient to provide the basics to families with children, and that's calculated to meet the cost of living in individual communities (in Toronto that's $18.52.) "We adopted that as our internal minimum. It includes benefits and it impacts our lower-wage staff or about 25 per cent of our workforce," said Keith Taylor, Duca's AVP, strategic social impact. "It's about being true to the investment employees are putting into the business, and ensuring they have the resources to participate as full members in the community."

However, that kind of participation is increasingly unattainable for precarious workers who have to work two or three jobs to make ends meet or who scramble to find childcare because they don't know their work schedules from week to week.

The socially responsible employer

Both organizations and HR professionals have a role to play to create better jobs and improve the lives of precarious workers, according to the panelists.

"HR Professionals need to champion the cause of creating an engaged workforce that becomes an organization's competitive advantage," says Ansari. "That entails fostering the right conditions to help both management and staff understand what each must do to create the culture of full engagement."

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According to last year's Precarious Penalty study, what this means in practice for an organization includes improving planning and scheduling, cultivating cultures of inclusion, providing pro-active support as well as providing tools and support for professional development:

  • Planning and scheduling is major issue for precarious workers. “Organizations and HR can identify better scheduling software or processes, or commit to moving away from just-in-time, day-to-day planning to scheduling that also takes worker needs into account,” says Lafleche.
  • Creating bridging programs within organizations –enabling freelancers or part-timers to move into more permanent roles as they become available and looking at the structures and processes to make that happen.
  • Including precarious workers in professional development or mentoring opportunities and workplace events like lunches and parties.
  • Extending employment benefits to at least some classes of temporary workers, like those who have been with the organization for more than six of 12 months. “This would be an enormous help,” says Lafleche. “Not having benefits is one of the biggest absences in the life of precarious workers.”
  • Providing training to precarious workers to help them move up the career ladder and hopefully secure full-time employment.

The business case for good jobs

The HRPA panelists all agreed that the short-term gains of using part-time, temporary or contract labour were offset by the business benefits of providing good jobs, including lower turnover and churn, higher employee engagement and alignment (especially for public-facing roles), improved employee performance, lower health and safety risks (particularly in manufacturing), and improved customer satisfaction by having permanent employees who really understand and are committed to the business.

"The most successful organizations are the ones that attract and retain the best people," says Ansari. "With the right conditions, full engagement of the staff can be nurtured, but only if the people feel confident and secure in their work. Without job protection, living wages, or job support, an employee's mind will be less on doing a good job and helping their team succeed, and more on looking for the next job that will offer them the conditions to be secure, successful, and happy."

Duff McCutcheon is communications specialist at the Human Resources Professionals Association (HRPA).

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