How a company manages and respects its employees makes the difference between a growth-minded, supportive environment and a toxic culture. Thus, employee treatment can either damage or solidify a company’s reputation. As it impacts retention and productivity, employee management also affects a company’s profit. These matters directly influence an investor’s ESG risk-benefit analysis.
Here are some specific KPIs that involve the treatment of employees.
- Staff turnover: How often is the company hiring for replacement positions? Does it primarily offer seasonal or temporary assignments?
- Training: How supportive and extensive are the company’s employee training and onboarding? Do new employees feel sufficiently educated and ready to perform their responsibilities?
- Absenteeism: Do people enjoy working there, or do they find reasons to stay away or work as little as possible?
- Wage gaps: Are wages comparable and competitive with industry standards? Does the company spread wages out evenly and fairly among employees, regardless of race, gender or sexual orientation?
- Human rights: Does the company have any history of human rights violations? These may include allegations of racism, sexism, sexual harassment claims and others. Companies need to have strong policies in place to safeguard against such violations. Investors will want to see that a company has a clean track record and takes proactive steps to maintain it.
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