Talent acquisition and retention are understood as a core competitive advantage for companies in the tech industry. Amazon’s much discussed HQ2 RFP process includes the “potential to attract and retain strong technical talent” as one of the top four criteria. Amazon received 238 proposals providing arguments that their site was the right location help draw the talent that Amazon needs. Amazon is in a unique position to attract the talent to perhaps anywhere they decide to build HQ2. The great majority of companies do not have that luxury.
As automation and technology continue to advance, I believe that talent acquisition, development, and retention will increasingly become more important for all industries and skill levels. As the industrial revolution emerged, human beings were effectively treated as mechanical components within a straight production line. This perception of human labor remains in many manufacturing industries and is now particularly prevalent in retail, customer service, and other low skill and low wage industries. Jobs are not designed around human beings. Human beings are slotted to play a particular role with in a “machine” delivering products, food, customer service, or other typically lower value products. This mechanistic view of labor is both harmful to the people doing those jobs and short-sighted for business owners and managers.
As an investor and advisor to early-stage companies and a consultant to larger companies seeking tax credit subsidies, I have been focused on creating quality jobs accessible to lower skilled workers for over 15 years. Unlike other impact focus areas, there is an inherent tension between employee wages and investor returns within shorter time frames. In a short-term view, employee wages are simply seen as an expense to be minimized. Many companies view the majority of their workforce this way. However, if we take a longer-term view, employee wages should be seen as an investment in future growth and competitive advantages. If we take that view, we can begin to design our businesses around the employees rather than seeing employees as disposable parts of a machine to be replaced when necessary.
I am an investor in Knotty Tie Co., an early stage for-profit social enterprise. The founders of the company had connected to resettled refugees in the Denver area who were coming into the job market with high level tailoring and textile industry skills. Unfortunately, these skilled workers were often unable to find work utilizing their highest skill. They fell into the unskilled labor market with low wages, little stability, difficult schedules, and few benefits. Knotty Tie Co saw these skilled workers as an untapped asset in the community and designed their business around employing them. Merging this deep and skilled labor force with emerging technology in digital fabric printing has led to steady growth and success for the company and stable incomes for refugee families. They have generated over $3 million in lifetime revenue and have created 18 additional jobs, including 9 refugees all earning at least $16/hour.
One of my larger company clients is Danimer Scientific based in rural Bainbridge, GA. Danimer is a bioplastics company that has recently finalized an agreement with PepsiCo to create rapidly biodegradable plastic bottles made primarily from canola oil. Rural Georgia is not a typical location for a green tech company. The company is able to offer compelling work opportunities to highly skilled scientists and engineers who may not desire to live in major metropolitan areas. The lower cost of living and quality of life in Bainbridge can be a recruiting benefit for some workers. Nevertheless, being in a very small labor market does present challenges. Few local young people have traditionally developed the interests or skills necessary for jobs at Danimer. The company takes a long-term view toward the labor force that they will need to be successful. The company works with local schools to host tours of their facilities to provide inspiration and education regarding bioplastic technology. They fund programs at the local community college to train people for work in their industry and have even helped fund one promising employee’s PhD studies. These investments in their current and future employees will set Danimer apart in the future.
For my own investments and those targeted by Impact Charitable, we take a long-term view towards labor costs. We see employees as long-term assets worthy of investment. We target companies that are designing the work around the people they want or need to hire. We look beyond the product or service that will be sold and analyze the human implications of how they will be made and delivered. Finally, acknowledging the tension that can exist in the short run between wages and investor returns, we work to break out of the traditional investment structure limitations to provide funding that is designed to maximize the impact and support the longevity of businesses that will create good jobs for those that need them.