Hidden Figures: The State of Human Capital Disclosures for Sustainable Jobs

Abstract

This paper addresses the increasing emphasis on sustainable business practices concerning employees. Sustainable jobs, as we refer to them, can lead to better financial performance, and represent a material impact for most corporations. Based on a multi-year investigation, we take a view that employment quality, and human capital disclosures, should focus on the set of job characteristics that enable workers to meet their needs from work – resulting in a conceptual framework resting on business basics, financial security, and job excellence.

Although the notion of a “good job” is widely recognized, managers and investors are hobbled by measurement challenges. Using data from six leading ESG rating providers, we demonstrate substantial reporting gaps. For example, we find that only 20% of social metrics are decision-useful and quantitative measures are missing for most firms (70-90% per metric across raters). Even turnover, a financially material metric, is only available for half of firms at best and lacks details. Two case studies, on Amazon and the quick-service restaurant industry, further illustrate the financial costs of ignoring employment quality. We also provide several practical recommendations for managers and other stakeholders.

Keywords: employment quality, good jobs, ESG, sustainability, responsible business