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Article published : Monday, May 17th, 2021 8:00 am
businessinsider.com
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[businessinsider.com]
Prudential just joined an initiative to analyze employee compensation and benefits. Here's why the insurance giant believes it's 'an opportunity to do better.' Summary List PlacementPrudential Financial is investigating the financial health of its more than 41,000 workers through a series of internal reviews that will analyze their compensation and benefits. The insurance giant recently announced it joined the Worker Financial Wellness Initiative, a program led by the research firm Just Capital, and a handful of think tank partners. The goal of the program is to help companies understand how to prioritize employee well-being.& To join the initiative, which was launched by PayPal in October, companies need to commit to conducting at least one of three internal reviews focused on living wages, benefits, and general employee financial health. "We understand that we have to start at home, with our employees," Lata Reddy, Prudential's senior vice president of inclusive solutions, told Insider. "Only then, by addressing their needs and making sure that they're able to be engaged and productive in the workplace, can we then meet the needs of our customers and, ultimately, our shareholders." Prudential, which signed on in March, joins the yogurt company Chobani in the initiative.& The move is part of a larger trend in the business world toward stakeholder capitalism, the idea that companies are responsible for not only their shareholders but also their employees and communities. The coronavirus pandemic and the racial reckoning following the murder of George Floyd accelerated this trend, Just Capital CEO Martin Whittaker told Insider.& "We've seen a lot of worker activism and a lot of shareholders and investors engaged on worker-related issues, especially around pay," Whittaker said. The origins of the initiative date to 2017, when PayPal CEO Dan Schulman heard rumors that some of his employees were struggling to make ends meet. At least one was selling their plasma to bring in extra income. The payments giant conducted a survey that asked employees how they were doing financially. The findings led Schulman to raise wages, lower healthcare costs, and extend stock options to all employees. Internal data showed employees at the company were more productive and loyal than before the changes.& Now PayPal is asking other companies to conduct similar surveys and share findings on how to prioritize employee well-being. It comes at a time when CEOs have increasingly weighed in on issues of race and financial inequality, in addition to taking stands on issues like voting rights. "I think all of this has put the well-being of America's workers front and center," Whittaker said, "and that's why this initiative is so timely." Prudential has been conducting annual financial-wellness surveys for over a decade, but in joining the Just Capital initiative, the company agreed to conduct more research and share their learnings with other companies. Prudential said it would share overall themes it found from the research with the public and provide the full findings of the survey to employees. "For us, it's the opportunity to learn and to share what we're learning with others and to learn from others about what they're doing because we know that there's always an opportunity to do better," Reddy said. Transparency among business leaders is increasing, albeit gradually For companies weighing whether to sign on to the program, one big question they have is about transparency, Whittaker said.& While many CEOs want to know how their employees are doing, they're less keen to go public with a story that shows inequity or financial challenges among its workforce. Companies aren't required to publish the results of the assessments, according to Just Capital.& "Companies are gradually becoming more transparent, but it's still a minority," Whittaker said. While it remains to be seen how many companies will go public with their results, cases like PayPal show that when a company is open about areas where it's falling short and implement solutions, it can benefit the company.& While PayPal was conducting its audit and reworking its benefits and salary frameworks, its stock price soared to record highs in 2020. Schulman insisted increased employee productivity and lower turnover rates greatly contributed to the company's success.& "That awareness of your employees' financial well-being is really what we're trying to drive," Whittaker said. "Once you're aware of real hardships, that's hard to live with just as a human being, let alone as a CEO."& Join the conversation about this story » NOW WATCH: How the 1999 Russian apartment bombings led to Putin's rise to power
Author : Shannen Balogh and Marguerite Ward
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