Accounting for Organizational Employment Impact

88 Pages Posted: 9 Oct 2020 Last revised: 26 Jan 2021

See all articles by David Freiberg

David Freiberg

Harvard University - Business School (HBS)

Katie Panella

Harvard University - Harvard Business School

George Serafeim

Harvard Business School

Rob Zochowski

Harvard University - Business School (HBS)

Date Written: January 15, 2021

Abstract

Organizations create significant positive and negative impacts through their employment practices. This paper builds on the substantial body of research regarding job quality and impact measurement to present a framework for monetized analysis of employment impact. We identify and propose a framework for measuring the four most salient dimensions of impact for employees, including wage quality, career advancement, opportunity, and health and wellbeing, as well as two principle impacts, diversity and employment location, for the broader labor community. The framework and methodology for calculating employment impact-weighted accounting figures is applied to several large corporations, resulting in positive impacts that range between 25 and 249% of their EBITDA suggesting significant heterogeneity in employment practices across organizations. These results demonstrate the feasibility of calculating employment impact in monetary terms, and provide a foundation for future application across additional geographies and contexts.

Keywords: employment, wages, impact measurement, financial statements, benefits, childcare, gender, race

JEL Classification: J16, J24, J28, J53, J63, J71, J81, J82, M40, M41, M14, M51, M51, M53, M54

Suggested Citation

Freiberg, David and Panella, Katie and Serafeim, George and Zochowski, Rob, Accounting for Organizational Employment Impact (January 15, 2021). Harvard Business School Accounting & Management Unit Working Paper No. 21-050, Available at SSRN: https://ssrn.com/abstract=3707740 or http://dx.doi.org/10.2139/ssrn.3707740

David Freiberg

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Katie Panella

Harvard University - Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

George Serafeim (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=15705

Rob Zochowski

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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