Sustainability challenge and related SDGs:
In the last 30 years, the worldwide unemployment rate has never been higher than in the last two years (6.57% in 2020 and 6.18% in 2021). In Europe alone, 12.9 million people were unemployed in 2021, and worldwide 214 million people. At the same time, the self-reported life satisfaction and GDP per Capita have a clear linear correlation.
But it is not just quantity that matters, but also the quality of work. For most people worldwide, labour income is by far the most relevant, if not the only income. It is therefore not surprising that the average fully employed person spends 1300-2500 hours per year at work (depending on the country), which is between 15% to 30% of the yearly hours available.
Hence, it is not an exaggeration to say that not only decent but good working conditions and sufficient jobs are fundamental for human well-being, the economy, and the functioning of our societies.
Primarily impacted SDGs: 8
Possible solutions and their contribution to achieving the SDGs
For obvious reasons, companies have a very direct effect on working conditions, the economic state of their employees, and overall happiness and satisfaction thereof. Even though all companies are embedded in a market and hence have to adhere to economic principles (e.g. in the long run, they cannot spend more than they earn), they still have broad freedom and a very broad set of measures to steer working conditions.
Working conditions can be fundamentally different from industry to industry, which makes it hard to compare all companies which each other, imagine an office job vs. a job in mining. Therefore, a relative comparison within industries is necessary. Companies can leapfrog their industry and also the economy as a whole by being very attractive employers. This will spark competition and showcase good practices.
Therefore, #BestEmployer takes the 300 best employers into account. We look at a broad range of metrics to assess the companies – some of them sector-specific, some of them general. Furthermore, we compare industries among each other – while certain industries can have a more relevant effect on decent working conditions, others have a smaller effect. For example, industries that employ a lot of people (e.g. retail or agriculture) or industries with very physical and dangerous work (e.g. in construction or mining) have a more fundamental impact on their employees compared to industries that are mainly based on office jobs (e.g. banking). Last but not least, we also take in-depth surveys on employee satisfaction into account to get a more direct view from the affected people themselves.
Primarily related SDG Targets: 8.2, 8.3, 8.5, 8.8
Investment Rationale and Growth Potential
Numerous studies show a clear link between employee satisfaction, good working conditions, and company performance. Good working conditions do not simply mean less risk of being sued and reputational damage, but it is fundamental for attracting and retaining scarce talent. Therefore, companies spearheading the labour market with attractive working conditions usually have more stable business continuity and higher innovation power. Often such companies are even more profitable. Investing in such companies can be an interesting opportunity.