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The Business Case for Good Jobs
Report

The Business Case for Good Jobs

Jobs that include employee training and good working conditions have higher worker productivity and lower operational costs associated with turnover, boosting firm profitability and economic growth.

Building an Economy for All, Economic Development and Governance, Jobs, +3 More

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In this article
Employees work at their desks in a San Francisco office.
Employees work at their desks in a San Francisco office on March 24, 2021. (Getty/Justin Sullivan)

Introduction and summary

Good jobs benefit workers, employers, and the economy. An overview of existing research shows that employers see greater profitability from improved job quality due to more productive workers, better employee recruitment, and greater worker retention.1 These benefits flow through to the economy at large by promoting higher productivity and increased consumer spending, driving economic activity, and creating broad economic benefits that allow employers, employees, and their communities to thrive.2 In short, investing in employee training and ensuring that workers feel safe at work makes them happier and more productive, leading to better products and services, helping organizations grow and succeed, and fueling a strong economy.

Over the past several years, government agencies and nonprofit organizations have proposed varied definitions of what constitutes a good job.3 Notably, in 2022, the departments of Labor and Commerce released their “Good Jobs Principles,” which outline the following components: recruitment and hiring; benefits; diversity, equity, inclusion, and accessibility; empowerment and representation; job security and working conditions; organizational culture; pay; and skills and career advancement.4

Higher productivity, paired with decreased turnover, equals better organizational performance, which leads to broad economic gains.

This report focuses specifically on two actionable and often underappreciated components of good jobs: worker training and working conditions, the latter including components such as physical safety and sexual harassment. Both training workers and improving working conditions help people get into and stay in jobs, which benefits employers and businesses. Two other components of good jobs—pay and paid leave—are briefly highlighted as well, as these features also benefit businesses and the economy.

Good jobs have good pay

Considerable evidence shows that when workers earn competitive wages, employers benefit from increased worker productivity and higher effort; in many cases, the wage increase pays for itself over the long run. Additionally, better pay improves worker morale, reduces discipline issues, attracts higher-quality candidates, and reduces worker turnover, resulting in a more experienced and productive workforce and savings in restaffing costs.5 Often, the net results are increased business profits: A 2020 study of hotel general managers showed that, on average, every 1 percent increase in annual compensation per worker nets an additional $1,213 in pretax profits over the same time period.6 Another study looking at warehouse workers showed that productivity increased by more than the cost of the wage increase, and the quit rate declined by about 19 percent.7 Better pay is also associated with direct benefits for local economies, through increased consumer spending, that flow through to businesses.8

How worker training benefits employers

Employer-provided training makes good business sense. Employer support for training, however, has decreased over time, meaning that many businesses are missing out on the benefits and opportunities of designing training specific to their organizational needs.9 When workers have access to quality employer-provided learning that enhances their knowledge and skills, employers see increases in worker productivity, decreased rates of absenteeism and turnover, greater innovation, and higher profitability.10 In fact, one study that evaluated the effects of employer-provided training showed an 8.6 percent return on investment.11 Studies focused on general training—training focused on generic, highly transferrable skills such as communication or project management—found mixed results regarding turnover,12 but training specific to a certain sector or firm, such as apprenticeships, has been shown to reduce turnover.13 Furthermore, investments in training benefit employers by helping workers become more productive, making them less likely to be injured, and ensuring they are less likely to leave. This helps organizations complete projects and meet long-term objectives.14

Several mechanisms can shift employee retention through behavioral choices. From a human resources management standpoint, training can increase workers’ commitment.15 Employers investing in employees’ skills and abilities improve worker attitudes and behaviors and decrease turnover,16 which benefits operational outcomes and leads to enhanced quality of products and services as well as increased innovation.17 All these things lead to improved financial outcomes, including return on training investment, increased profits, market returns, and better financial performance overall.18 A 2015 review of 92 training and human resources studies in the United States, United Kingdom, and other countries found that 73 percent showed positive financial performance.19

Benefits of training: By the numbers

8.6%

Estimated return on investment of employer-provided training

73%

Percentage of human resources studies that showed positive financial performance

$25,045

Estimated value of apprenticeship investments for the median employer, per apprentice

$1.44

Median return for every dollar employers invested in apprenticeships

Apprenticeships—which are longer-term, often sector-specific programs that allow workers to earn and learn—make particularly good business sense, as they are associated with decreased turnover and hiring costs as well as increased workplace diversity.20 A survey of employers using apprenticeship programs found a wide degree of productivity benefits, including improving workers’ skills, enhancing employers’ reputations, and investing in relationships with schools and training providers.21 In addition to these qualitative benefits, more measurable financial advantages are associated with apprenticeships. For instance, a U.S. Department of Labor evaluation of the American Apprenticeship Initiative found that two-thirds of the employers surveyed recouped their investment in apprenticeships, with a median return on investment of $1.44—a return of $144 for every $100 invested.22 In a separate study of the same program, businesses that invested in apprenticeships experienced reduced turnover and improved company culture, valued at $25,045 per apprentice for the median employer.23

Good jobs have paid leave

Paid leave is an essential component of good jobs that helps both employers and employees. It includes paid sick time and paid family and medical leave, which enable workers to care for themselves or others in the short or long term.24 Yet almost two-thirds of low-wage workers in the United States lack access to paid sick leave, and America is the only industrialized nation without a federal paid family and medical leave policy.25

Despite opponents’ claims, research and data show that paid sick leave helps, rather than harms, businesses.26 There is extensive evidence of the benefits of paid sick leave, including increased worker productivity through reduced presenteeism and improved morale.27 Paid sick time is also specifically associated with a reduction in the number and severity of workplace injuries, with studies showing that stress and illness can impair decision-making.28 Additionally, paid sick leave reduces direct business costs through decreased employer-sponsored health insurance premiums, as the leave allows workers paid time off to see doctors and access preventive care.29 Paid sick time also increases firms’ profitability and performance alongside the broader economic benefits of improved public health and reduced contagion.30

It follows, then, that paid sick leave is associated with stronger, more robust labor markets.31 Because paid sick leave benefits businesses in locations that mandate it, most companies have supported the policy after its enactment and enforcement.32

Similarly, paid family and medical leave benefits employers through increased worker productivity, employee retention, and improved recruitment.33 While the United States does not have a federal paid family and medical leave policy, 13 states and the District of Columbia have enacted their own guarantees.34 In the absence of government paid family and medical leave programs, employers can choose to provide the benefit. When they do, workers are more likely to recommend their employer to friends, bolstering talent acquisition.35 Crucially, access to paid family and medical leave increases employee commitment and retention, with employees more likely to return to work after taking paid leave for health or caregiving reasons.36

Employers in states with paid family and medical leave experience productivity increases of about 5 percent compared with employers in states without it, partly because of associated improvements in morale and increases in productivity for employees with chronic conditions.37 Paid family and medical leave helps drive improved revenue and profits; and in states that offer it, employers support the programs because they have proven successful for employees and employers alike.38

How good working conditions benefit employers

Good working conditions are broad in scope. They include, but are not limited to, conditions that allow workplaces to be free of sexual harassment and retaliation, as well as safe and healthy, for all workers.39 When employers create these elements within workplaces, worker productivity and retention are higher and employers have better reputations and perform better financially.

This section highlights two components of good working conditions: allowing workers to be free from sexual harassment and protecting their physical safety.

Workplaces free from sexual harassment

The U.S. Equal Employment Opportunity Commission (EEOC) defines sexual harassment in the following way:

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.40

While people of all gender identities and racial and ethnic groups face sexual harassment in the workplace, respondents to a 2022 survey who identified as transgender or gender nonconforming reported experiencing higher rates of harassment.41 Sexual harassment also disproportionately affects women, with more than 1 in 3 women experiencing workplace harassment.42 These experiences are often exacerbated at the intersection of sex and race, with cis women of color—especially Black women—often experiencing sexual harassment layered with racial discrimination.43 The majority of workplace sexual harassment goes unreported as workers attempt to avoid employer retaliation, and with good reason: Between fiscal years 2018 and 2021, 44 percent of harassment complaints filed with the EEOC also included a charge that employers had retaliated.44

Ensuring that employees are free from sexual harassment is good for business. Sexual harassment has a significant detrimental impact on worker productivity, directly inflicting harm on survivors, bystanders, and employers.45 Evidence shows that sexual harassment harms mental health and decreases job satisfaction for survivors and bystanders.46 This is problematic for employers because employees’ well-being and job satisfaction are directly linked to higher worker productivity and retention.47 Additionally, employee satisfaction influences customer loyalty, profitability, and long-term stock returns, with companies that employ satisfied workers surpassing industry benchmarks by 2.1 percent from 1984 to 2009, likely because satisfied workers are more motivated and less likely to leave.48

Moreover, survivors of sexual harassment are more likely to experience additional harm that can lead them to be less productive, with one study showing that women in the construction trades who experience gender discrimination or harassment are two times more likely to be injured at work.49 Insensitive, inappropriate, or retaliatory responses to reports of sexual harassment exacerbate and increase survivors’ trauma and distress. This, in turn, allows a toxic work culture—“disrespectful, non-inclusive, unethical, cutthroat, and abusive”—to persist, causing widespread harm across workplaces.50

This means that, as mentioned above, the harms and costs of sexual harassment spread beyond those directly affected and infect the broader workplace.51 Workers who witness harassing behaviors have higher presenteeism, absenteeism, and turnover and decreased satisfaction.52 Furthermore, productivity decreases for individuals and teams when sexual harassment occurs: One study found that workplaces lose an estimated $22,500 in lost productivity per survivor and that team financial performance suffers due to increased conflict and decreased team cohesion when sexual harassment occurs.53

Workplace sexual harassment: By the numbers

$22.5K

Estimated lost productivity in workplaces as a result of sexual harassment, per survivor

44%

Share of harassment complaints filed with the EEOC that also included a charge that employers had retaliated

1.5%

Loss in an employer’s market value, on average, after a public announcement of sexual harassment

17%

Loss in stock returns for employers associated with persistent rates of sexual harassment allegations

Other increased operational costs include more difficulty attracting talent. A full range of unfair and discriminatory behaviors, including sexual harassment, increase workers’ likelihood of leaving their jobs.54 Sexual harassment is more common in male-dominated fields, including STEM, where it is linked to workers wanting to leave their jobs; yet each STEM departure has a hefty price tag, ranging from $110,000 to $1.5 million.55 The concentration of sexual harassment in male-dominated fields impedes recruitment and further ingrains occupational segregation and the gender pay gap.56 Sexual harassment is also linked to direct employer costs around legal liabilities.57

In addition to decreased productivity and retention, sexual harassment in the workplace is associated with decreased financial performance for employers. In the short-term, a public announcement of sexual harassment is linked to a 1.5 percent loss in market value, on average, and harms public sentiment about the firm.58 One evaluation reviewed 1,100 firms and found that persistent rates of sexual harassment allegations are associated with a loss of 17 percent in stock returns, decreased operating profitability, and increased labor costs for up to five years.59

The evidence is clear: It is in the best interests, financial and otherwise, of employers to both proactively prevent and appropriately respond to sexual harassment.

Protection of physical safety

Ensuring that workplaces are physically safe can reduce incidents that hinder productivity and increase direct operational costs. In 2021, the direct costs of work-related injuries were $58 billion in the United States.60 Across all private and public sectors in 2021, employers reported that nearly 3.2 million workers had work-related illnesses and injuries.61 Additionally, 5,190 people died on the job, with Black and Latino workers disproportionately represented among workplace fatalities.62 These illnesses, injuries, and deaths—many of which are preventable—harm families, communities, and employers.63 Efforts to increase workplace physical safety can target a multitude of issues that vary across industries. Preventive measures can address prolonged exposure to high temperatures and extreme weather, ergonomic issues, musculoskeletal injuries, back problems, and injuries arising from slips, falls, and other accidents.64

Investing in safety prevention is a cost-effective way to reduce productivity losses and other costs associated with safety incidents.

Employers who prioritize physical safety in the workplace can expect fewer accidents, injuries, and illnesses.65 This leads to cost savings in various areas, including lower workers’ compensation expenses and reduced medical costs. In addition, investing in safety prevention is a cost-effective way to reduce productivity losses and other costs associated with safety incidents.66 Businesses also benefit from increased safety by avoiding fines and reputational costs. For example, the Occupational Safety and Health Administration (OSHA) recently increased its maximum penalties for fines—up to $156,259 per violation—and publicly names offending companies.67 Safety protections also can help employers attract and retain workers. A 2017 survey showed that employees count a safe working environment among their top considerations when weighing job options, giving safer employers a recruiting edge.68

Protection of physical safety: By the numbers

$58B

Direct costs of U.S. work-related injuries in 2021

3.2M

Number of reported work-related illnesses and injuries in 2021

7.5%

Increased safety measures’ rate of return on capital

200%+

Greater performance by companies that prioritize worker wellness and safety versus the S&P 500

Moreover, employers’ efforts to improve physical safety in the workplace are linked to significant increases in productivity and financial performance. An economic analysis of net present value showed that increased safety measures have a 7.5 percent rate of return on capital.69 More holistically, companies that prioritize worker wellness and safety outperform the S&P 500 by more than 200 percent, delivering greater value for their investors.70 Employers of all sizes benefit from prioritizing safety. Injury prevention is linked to small business’ success, and small businesses that survive for more than five years have average injury rates that are less than half of those that fail within a year or two.71

Policy recommendations for creating good jobs

The federal government is investing in industrial policy to grow the middle class, and investments will be best served by ensuring that good jobs drive those policies forward.72 Many policy recommendations can contribute to consumers’ ability to afford necessities and bolster an economic climate that allows businesses to thrive. Policy solutions focused on creating good jobs can increase worker productivity, reduce turnover, and improve employers’ financial performance. A recent analysis indicates that turnover is higher in states where, on average, jobs have fewer benefits, lower pay, and fewer training opportunities.73

In particular, policymakers should pursue the following measures:

Support effective training opportunities

Policymakers need to focus on the provision of, and effective and additional support for, training and working conditions—two essential components of many other overlapping factors that support workers but often do not receive enough investment.74

Policymakers should provide better support for training that is more likely to have successful outcomes—specifically, training programs that are tailored to the unique needs of individual employees. Policies could include those that better connect secondary and postsecondary education, apprenticeship programs, and local workforce development agencies75 to build training programs aligned with employer needs.76 Finally, voluntary recognition and support of collective action would allow workers to voice their specific needs and promote safer workplaces.77

Address sexual harassment in the workplace

Policies addressing sexual harassment must be based on the fundamental values of equality and respect for diversity.78 In particular, EEOC recommendations and practices, alongside those of the White House “U.S. National Plan to End Gender-Based Violence,” should be operationalized to prevent and address sexual harassment in the workplace.79

Improve physical safety in the workplace

Although physical safety within the workplace will vary greatly depending on context and situations, it should be tailored to workers’ changing needs. OSHA recommends that broader workplace safety measures include robust health and safety programs that address risks and prevent workplace injuries, illnesses, and deaths.80 The process of implementing the programs should include worker participation in hazard identification and control, education and training, and program evaluation and improvement.

While it makes sense for employers and businesses to consider workers’ needs, policy levers are also necessary to create strong incentives for employers to ensure that all employees have access to good jobs, regardless of where they work. Policies such as the Family and Medical Insurance Leave (FAMILY) Act—a proposal to create a national paid leave program—can also help level the playing field, particularly regarding upfront investments from employers.81 Furthermore, fully funding agencies, such as the EEOC and OSHA, that provide technical assistance and have enforcement authority, can strengthen existing laws designed to protect workers.82

Conclusion

Good jobs drive successful employers and businesses. They also benefit all workers—particularly workers of color and women, who are disproportionately represented in low-wage jobs that lack training and safety. Investing in the provision of job training opportunities and better working conditions increases worker productivity and decreases turnover. As a result, employers see improved financial performance. Firms and workers, together, contribute to more economic activity, growing the middle class and strengthening the economy.

Endnotes

  1. Heather Boushey and Sarah Jane Glynn, “There Are Significant Business Costs to Replacing Employees” (Washington: Center for American Progress, 2012), available at https://www.americanprogress.org/article/there-are-significant-business-costs-to-replacing-employees/.
  2. Marc Jarsulic, “Investing To Be Competitive: The New U.S. Industrial Strategy” (Washington: Center for American Progress, 2023), available at https://www.americanprogress.org/article/investing-to-be-competitive-the-new-u-s-industrial-strategy/.
  3. Maureen Conway and others, “To Build Back Better, Job Quality Is the Key” (Washington: Aspen Institute and others, 2021), available at https://www.aspeninstitute.org/wp-content/uploads/2021/03/To-Build-Back-Better-Job-Quality-Is-the-Key.pdf.
  4. U.S. Department of Commerce and U.S. Department of Labor, “Good Jobs Principles,” available at https://www.dol.gov/sites/dolgov/files/goodjobs/Good-Jobs-Summit-Principles-Factsheet.pdf (last accessed June 2023).
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  8. Michael Reich, “Likely Effects of a $15 Federal Minimum Wage by 2024,” February 7, 2019, available at https://www.congress.gov/116/meeting/house/108844/witnesses/HHRG-116-ED00-Wstate-ReichM-20190207.pdf.
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    Youngsang Kim and Robert E. Ployhart, “The Effects of Staffing and Training on Firm Productivity and Profit Growth Before, During, and After the Great Recession,” Journal of Applied Psychology 99 (3) (2014): 361–389, available at https://www.apa.org/pubs/journals/features/apl-a0035408.pdf; Stéphane Renaud and Lucie Morin, “The impact of training on firm outcomes: longitudinal evidence from Canada,” International Journal of Manpower 41 (2) (2020): 117–131, available at http://doi.org/10.1108/IJM-05-2018-0169; Patrick Kampkötter and Kathrin Marggraf, “Do employees reciprocate to intra-firm trainings? An analysis of absenteeism and turnover rates,” The International Journal of Human Resources Management 26 (22) (2015): 2888–2907, available at https://www.tandfonline.com/doi/abs/10.1080/09585192.2015.1005655; Francis Green and others, “The Impact of Training on Labour Mobility: Individual and Firm-level Evidence from Britain,” British Journal of Industrial Relations 38 (2) (2000): 261–275, available at https://doi.org/10.1111/1467-8543.00162; Phyllis Tharenou, Alan M. Saks, and Celia Moore, “A review and critique of research on training and organizational-level outcomes,” Human Resource Management Review 17 (3) (2007): 251–273, available at https://www.sciencedirect.com/science/article/abs/pii/S1053482207000393.

  11. Almeida and Carneiro, “The return to firm investments in human capital.”
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