Harvard Business School has looked at the impact of four large US companies' policies on their staff and showed how employment impact relates to earnings
As part of its efforts to quantify environmental and social impact, Harvard Business School has released data on the application of its methodology on four large US-headquartered companies: tech multinationals Intel and Apple, pharmaceutical group Merck and retail chain Costco.
In its November report ‘Accounting for Organisational Employment Impact’, the university looked at the impact of the companies’ policies on US staff (a combined total of almost 328,000 people) and showed how employment impact relates to earnings.
Interestingly, Costo’s positive employment impact is much larger than its ebitda, earnings before interest, tax, depreciation and amortisation, based on 2018 data: the former representing 249 per cent of the latter. For Apple this ratio is only 25 per cent.
Employment impact is measured by the valuation of a number of factors, from wage quality to opportunity (the presence of women and ethnic minority groups across job categories) to health and wellbeing.
All four companies suffer an opportunity ‘penalty’, as Harvard describes it, and an even more evident diversity penalty based on staff representation of the demographics of the area where they operate.
The companies’ low positive impact in terms of location, which looks at companies’ impact on local employment, highlights that much more still needs to be done.
