28 Feb 2021Working Paper Summaries

Measuring Employment Impact: Applications and Cases

by Katie Panella and George Serafeim

Employment impact-weighted accounting statements quantify the positive and negative effects of firm practices for employees and the broader labor community. This analysis of companies in different sectors shows how these statements are beneficial both at an aggregate and more specific level.

Author Abstract

Applying the Impact-Weighted Accounts Initiative’s employment impact methodology on eight leading companies, we document wide variability in employment impacts as a percentage of salaries paid, ranging between 59 and 80 percent. We identify opportunities for improvement and discuss transition plans for companies to create more positive employment impact. We conclude with a call for disclosure of Equal Employment Opportunity Commission EEO-1 reports, paid leave, childcare and healthcare benefits, which would greatly facilitate the comparable and reliable measurement of employment impact in the future.