Opinion: These companies prove that when workers are happy, investors are too


The work is back. As familiar political wrangling ensues – the exalted left, the downcast right – investors are taking note and American businesses should make the most of it.

Unions are organizing strikes across the country, from large employers such as Deere DE,
+ 0.35%,
Kellogg and Volvo to niche groups such as Connecticut group home workers, Seattle carpenters, and Reno bus drivers. Amazon.com AMZN non-union workers,
at Starbucks are also earning, on topics ranging from job training to tuition.

Work flexes that muscle in the midst of an exceptionally favorable job market. Employers face labor shortages as companies struggle to find replacements while employees easily find other jobs.

Participants put forward different views on the economics of such advances in labor. Unions complain that American companies are paying an unfair share of corporate profits to shareholders. Businesses argue that wage increases hurt customers because higher wages directly lead to higher prices.

Such positions mistakenly state that corporate life is a zero-sum game with all the constituents opposing each other. But the opposite is more often true. In some of America’s best companies, well-treated employees increase the value of a company’s products, customers willingly pay for added value, and the resulting increased profits add value to shareholders.

Companies known to practice such a triple value business model include these top performing companies:

First Republic Bank FRC,
+ 0.59%,
whose account managers bring personal banking to the highest level.

Nordstrom JWN,
+ 0.03%,
the department store whose clerks are renowned for their customer service.

Sherwin Williams ASS,
+ 1.16%,
the painting company whose staff maintain valuable long-term relationships with customers.

The triple play of these companies is advantageous for the shareholders. These companies are all highly ranked for attracting quality shareholders, the most patient and focused investors.

While every business is unique, those that complete triple play all tend to boast a variety of intangibles that add substantial value. For customers, intangibles include brand quality, product warranties, and support, which even the most price-conscious pay. Among workers, intangible assets include job satisfaction, job training, and opportunities for promotion, perks that some even trade for lower pay.

Quality shareholders, who see competitive advantages, have long focused on these particularly valuable corporate cultures. When workers line up to deliver customers, both win, and so do shareholders.

The triple play is the bearer of lessons for the current union discourse. Employers can improve their attractiveness by developing a culture that attracts particular employees, so that factors other than pay and benefits matter. Employees can highlight intangibles that would support such an alignment. Some examples:

Volvo VLVLY,
+ 0.47%
: At an automaker with a reputation for safety, triple play could mean factories with the best safety records in the industry. In their recent contract renewal, the parties opted for hourly wage increases while boasting that the contract offers workers a “high quality of life”. Aligning worker safety with product safety would be an obvious way to make this boast a reality.

Kellogg K,
+ 0.70%
: In a recent standoff, the food company touted an annual salary of $ 120,000 while the union observed that this includes overtime 80-hour weeks, with base pay half of it. For a business that needs to meet the needs of today’s health-conscious food consumers, it may be more useful to train and reward a healthy workforce: cap overtime and add perks like breaks for exercise, gyms, or yoga classes.

Starbucks SBUX,
+ 0.27%
: Some staff at the café chain are agitating to form a union, seeking both a higher salary and more solid training. For a company whose commercial strategy is to promote its stores as recognized gathering places, the interest in training its employees is naturally part of the triple play. Train baristas in community development customer service, get them to love their jobs and thus attract more customers, sell more products and earn more profits.

The list could go on, responding to requests from Reno bus drivers and letting them help determine the best route times or giving Hollywood production staff some downtime during shows to think and develop. their talents. Wherever companies can align employee culture with corporate mission, triple play awaits.

Since the 1970s, the workforce has never been so volatile. Managers should see this as an opportunity to engage their workforce to a new level and embrace triple play, not talk like business is zero-sum. While labor disputes in a company can always be a red flag for investors, quality shareholders are likely to reward companies that do. Investors have long benefited from triple play, and a resumption of work could make this business model more important than ever.

Lawrence A. Cunningham is a professor at George Washington University, founder of the Quality Shareholders Group and editor, since 1997, of “The Essays of Warren Buffett: Lessons for Corporate America”. For updates on Cunningham’s research on quality shareholders, sign up here.

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