Accounting for Employment Impact at Scale

61 Pages Posted: 20 Sep 2021 Last revised: 12 Jan 2022

See all articles by Adel Fadhel

Adel Fadhel

Harvard Business School

Katie Panella

Harvard University - Harvard Business School

Ethan Rouen

Harvard Business School

George Serafeim

Harvard Business School

Date Written: December 1, 2021

Abstract

Using new data on workforce composition and wages, we systematically measure the employment impact at U.S. firms from 2008 to 2020, including 2,682 unique firms and 22,322 firm-year observations. We document significant variation across industries and firms within each industry suggesting substantial heterogeneity of firm human capital strategies. Employment impact is moderately associated with lower employee turnover and higher firm valuation, while firms that have higher sales and invest more in innovation exhibit higher employment impact. Our results collectively demonstrate the feasibility and value of employment impact accounting.

Keywords: human capital, impact accounting, ESG, employee turnover, diversity

Suggested Citation

Fadhel, Adel and Panella, Katie and Rouen, Ethan and Serafeim, George, Accounting for Employment Impact at Scale (December 1, 2021). Harvard Business School Accounting & Management Unit Working Paper No. 22-018, Available at SSRN: https://ssrn.com/abstract=3925248 or http://dx.doi.org/10.2139/ssrn.3925248

Adel Fadhel

Harvard Business School

Boston, MA 02163
United States

Katie Panella (Contact Author)

Harvard University - Harvard Business School ( email )

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

Ethan Rouen

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States
617-495-6275 (Phone)

HOME PAGE: http://www.ethanrouen.com

George Serafeim

Harvard Business School ( email )

Boston, MA 02163
United States

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

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