CEOs know that when employees are invested in their work, they tap into discretionary effort. But there hasn’t been a consistent way to measure that level of discretionary effort, nor a way to associate it with company performance. Until now. Our research finds that companies providing higher job quality to their workforce are the ones that are financially outperforming their peers, and there is a way to track and measure job quality through a single KPI, the Good Job Score (GJS).
PwC worked with FoW Partners1 and Two Sigma Sustainability Science on this topic. Surveying 8,950 workers across 186 public companies from the Russell 1000 index, our research examined dozens of workforce metrics to find which ones truly matter to job quality. We found four factors that, together, constitute whether employees say they have a “good job” (see the GJS white paper for methodology and detailed findings). Those factors are:
Companies in the top 20th percentile of Good Job Scores financially outperform their peers in the bottom 20th percentile by a significant margin.
In addition, as we looked at the financial performance of the surveyed companies, we found that those in the top 20th percentile of Good Job Scores outperform, by a significant margin, their peers in the bottom 20th percentile.
Based upon these findings, we developed the Good Job Score, which ranges from a low of 1 to a high of 5. GJS is a simple assessment that focuses on the four identified dimensions of a good job: Leadership, Purpose, Growth and Fairness. The assessment has only three questions per dimension, and it takes employees just 3 – 5 minutes to complete.
Diversity, equity and inclusion considerations are reflected in the Good Job Score assessment:
Companies can take the survey results and calculate their own Good Job Score reflecting the appropriate correlation coefficients (visit www.GoodJobScore.com). Or they can leverage a Power BI dashboard developed by PwC that automates taking the survey, calculating the score and providing analytics to identify the strength of the organization and opportunities for improvement and intervention.
1. Purpose - The Purpose dimension of job quality is the least correlated to the other three dimensions of job quality. That means that even if Leadership, Growth, and Fairness are wobbling (which can often happen during times of change), the Purpose dimension can stand strong and constant to continue to sustain job quality. Purpose matters.
2. Leadership - The Leadership dimension is the most correlated with the other dimensions and has the greatest impact across all scoring dimensions of the Good Job Score. So, when in doubt about where to begin to improve job quality, focus on employee responses to the GJS questions related to Leadership.
The importance of the Leadership dimension is clearer when taking a sector view of Good Job Scores calculated as part of our research. Consumer-related companies generally received low marks on the Leadership dimension, contributing to a lower median GJS score compared to other sectors. Technology firms received high Leadership scores, helping the sector nab the top ranking.
3. Growth - Latent factor analysis across the four dimensions – Leadership, Purpose, Growth, Fairness – reveals job growth as the most influential factor in determining a “good job” score, indicating that career advancement opportunities are often the keys to unlock job satisfaction. This insight emphasizes the critical role of organizational investment in employee development, highlighting that businesses prioritizing growth avenues are most aligned with employee motivation. Essentially, job growth is not a bonus or “nice to have,” it can be critical to workforce retention and performance.
4. Fairness – Analysis across the four dimensions shows that Fairness is the second most influential factor. This factor includes fairness of pay, flexibility, and physical and psychological safety in its considerations. As many may have expected, these base workforce needs are the foundation for job quality.
5. CEO responsibility - Job quality is a business-led, not an HR-led, outcome. When you look at the four dimensions of a good job and the underlying assessment questions, it becomes clear that job quality is primarily driven by company leadership and management. HR policies and programs play a role, but primarily they are enabling the measures that are driven and delivered by leadership and management. The most successful companies will likely have leadership that “owns” responsibility for job quality.
Our quick survey can precisely measure job quality, gather critical insights to help identify the largest opportunities to improve job quality and benchmark results against peers. For companies that do not currently have employee engagement or organizational health surveys, this can be an easy entry into that world. For organizations that already have employee engagement and/or organizational health surveys in place, it can be easy to integrate the Good Job Score’s questions into those surveys to make this a seamless employee experience.
While this is newly developed thought leadership, it is interesting and exciting to see that the fastest adopters of GJS are private equity (PE) firms for their portfolio companies. PE firms say this is a simple and effective way to help drive and measure financial and social value creation.
The ESG Data Convergence Initiative (EDCI) is considering making GJS one of the few standardized ESG metrics used in the PE industry after one of the largest private equity firms advocated for it. Some private equity clients are beginning to pilot GJS at a few portfolio companies at a time, others are launching GJS across their portfolio companies.
While we often refer to the workforce as “human capital,” we have not had a systematic and easy-to-implement approach that enables CEOs to help drive their desired outcomes – financial and social value creation.
Not only that, but the messaging to your workforce is powerful. GJS enables you to clearly demonstrate you care about employee well-being and are listening and acting. You are putting time and effort into what’s important to them – and as you take steps to improve job quality, employees will likely feel the difference. GJS makes it easier and simpler to prioritize the things that truly matter to your people, energizing them to align to drive results.
Finally, it is a solid message to your board and investors. You are efficiently identifying the most critical actions to take, which will improve job quality through measures that can be tracked and quantified via the Good Job Score KPI.
Additional contributions from Courtney Lennartz and Eunice Lee.
1 On April 1, 2024, Two Sigma Impact transitioned to become FoW Partners, LP, an independent, employee-owned, SEC registered investment adviser.
