Many companies claim to be good places to work. The reality to those inside the shop, however, might feel very different. In the process of churning out cool products or some memorable service, something (okay, sometimes it’s many things) gets neglected. Maybe people are being paid differently to do the same job or dealing with ornery upper managers. Trace the supply chain of that company back far enough, especially if it’s dependent on the developing world, and the problems could become more nefarious: child labor, inhumane working conditions, and unlivable wages. Some leaders probably know this. Others may be woefully apathetic.
To cut through the confusion, GoodWell, a Boise, Idaho-based company has created a new kind of auditing process for companies, nonprofits, and governments to measure their success: Rather than just being profitable and fiscally responsible, they can earn a certification as a fair, equitable, and humane place to work. “We’re providing big companies with a methodology to say, ‘Hey, these are really simple, easy ways to make sure that we’re not doing really, really bad things,’” says chairman and founder Pete Gombert.
GoodWell does that through a scoring rubric designed to measure 11 key indicators of a healthy workplace. The categories include obvious affronts—there’s no tolerance for underage workers—and extremely low thresholds for more complicated problems, like the percent of employees working part-time or earning below poverty-line wages. Other factors include whether there’s reasonable wage parity between executives and average employees. (It’s not exactly a humbling standard, with the cap for CEOs at less than 100 times the average worker’s compensation.) And whether there are substantial pay gaps between men and women doing the same work, and between all people within the same position. (Again, not ideal: The math allows for up to a 10% disparity, plus extra adjustments for years of experience.)
Most inventively, GoodWell created a new metric for overall employee satisfaction based off the consumer satisfaction concept of “net promoter score” or how likely a buyer would be to recommend some product to others. The company’s “eNPS” or “employee-based net promoter score” asks current employees how likely they would be to recommend their workplace to others on a scale of 1 to 10 and creates a metric about how good a place a given company is to work at. “Most companies do kind of an employee happiness survey or something along those lines, but they don’t really have a scientific approach to measuring how they are perceived by their employees,” adds Gombert. “We provide a methodology to be able to do that, which is tremendously valuable for them.”
The test is pass-fail on a per category basis: Employers must achieve a favorable result for each of the 11 metrics or revamp their practices and complete the entire audit again. While there are three levels of certification (blue, gold, and platinum), ascending that scale isn’t about earning a higher score but rather auditing ever more of your supply chain, which for big companies may mean figuring new solutions to human rights issues they don’t often talk about: Whether their product is made by child labor, and if workers in developing countries are being overworked and paid fairly.
The price of certification depends on scale. It’s a flat fee of $150 to get started, plus $10 for each employee on payroll. To retain their ranking, each group must be re-audited annually. So far, about a half dozen groups, mostly in the Boise area have earned the basic certification, including the City of Boise. “From a somewhat selfish standpoint I think it’s a recruiting tool for the city,” says Nic Miller, the city’s director of economic development, who notes that it’s an easy way to telegraph the city’s values. “If I hear the words ‘millennial’ and ‘mission driven’ a few more times I am going to lose it, but there’s a growing contingent of people who say, ‘I want to be part of something larger than myself and that has a service element to it.’ [This] is a signal to people within the community that as an organization we feel the same way.”
Russ Stoddard, who heads the branding and marketing agency Oliver Russelland is currently undergoing certification, also considers it a retention tool. While the certifications may still have some wiggle room within categories, at least a GoodWell-approved place is clear about exactly how wiggly things are allowed to be. “It’s great for the people who work here to actually have a better understanding of how their jobs and workplace compare to other places,” he says. If managers want to get more specific, they can share the results of their audit internally.
Over time, both Miller and Stoddard like the benchmarking aspects of the program. Scores are shared among members, so people can see how they’re measuring up against others within their industry—and track how they’re improving over time. (The giving network 1% For The Planet, which encourages companies to pledge that amount of their profits toward environmental causes and has generated more than $150 million in funding, is also in the process of becoming certified.)
Gombert, a serial entrepreneur, has learned the importance of such audits firsthand. In 2004, he started Balihoo, a marketing services and tech company that raised $23 million in venture capital and expanded to 120 employees. During the recession, he adopted what he calls a “head down, figure out how to make it to tomorrow” approach to management. “Inherently I knew that I wanted to build a strong culture and a good culture,” he says. “But I never really aligned my actions with my intentions. I used my gut to do that.”
Around 2010, he decided to formalize that process for Balihoo. (“Call it the midlife crisis or whatever you want, but I kind of needed to find some more purpose in my daily work,” he says.) When he couldn’t find a set of procedures to do that, he began inventing his own, and was surprised by the results. “I had hired every single person at that company and negotiated everybody’s salary. This is obviously not something that I was proud of and I’m not proud to admit. We had a gender bias that we were underpaying women,” he says. “We corrected it, but wouldn’t have known about it if I didn’t measure it.”
The idea to open up that process to others came in 2014, after Gombert transitioned from CEO to board chairman at Balihoo. While taking some time off, he traveled the world with his family, stopping to do service projects in places of need. The group ended up building a school in Phnom Penh, Cambodia, which was suffering from the fallout of a globalized supply chain: Despite working full-time, many of the residents still lived in abject poverty. One of the main employers enabling that, he says, was a nearby factory that supplied goods for the U.S. military.
When he returned home, he decided to create a system where companies might be incentivized to replace unsavory or inhumane business practices in a way that adds value instead. As the certification becomes more widely adopted, not having one may be its own warning signal that some seemingly positive places are actually toxic work environments. Gombert started in Boise because he lives there. He hopes to expand quickly—something the 1% For The Planet deal may help with—to the point that organizations everywhere feel pressure (or excitement) to become certified or else miss out on the best employees.
Eventually, GoodWell may move toward creating a seal for product packaging or group promotional materials to help customers and clients make more informed decisions about purchases and partnering deals. Either way, with enough public pressure perhaps bigger companies may move toward being audited, cleaning up workplace problems on a larger scale.
Perhaps the most surprising part is that the current standards make some allowances for wiggle room on troubling issues. There’s a small length-of-tenure adjustment that takes into account experience in each role for the fair pay measurements. The line for employees earning below the poverty level is less than 10%, not zero, and the annualized attrition rate is less than a quarter overall. “The idea is not to be perfect,” says Gombert, especially considering these broad standards will be applied across many industries and among different companies worldwide. “The idea is again to kind of align your intentionality with your actions such that you’re not wildly off.”
To quote a classic business mantra: “You can’t manage what you don’t measure,” he adds. Toss in a certification so everyone knows you’re doing it, and the result could be even more profitable.