State of the Global Workplace (Part 1)

A Complete Breakdown and Analysis

Reading Time: 8 minutes

Gallup's State of the Global Workplace report contains critical information to improve people and culture. Read or listen as Fionna summarizes this 215 page report, starting with part one.

Last time I thought about how much work I have to do in one day, the last thing I wanted was to sit down and commit to reading a 215-page report. I don't know about you, but for me, I didn't see it in the cards.

Fortunately, when I stopped to think about how much work Gallup put into the report — research conducted across 49,495 businesses, 1.2 million employees across 45 different countries, and delivered by an organization that's upheld its reputation since 1935 — I knew I had to do it. 

It was worth it to me to learn more about the findings Gallup had uncovered. To meticulously dig in and apply anything, and everything, we could learn from it to help our users. 

So, I thought: How could I make myself do this?  How could I turn the work of reading this behemoth of a report into something more pleasurable? 

Then, it hit me. 

I'll share it with all of you. You, the people reading (or listening to) this audioblog. The people with relevant curiosities about this report — or others like it — without nearly enough time to go through every single page.

So, without further ado, I bring you my recapitulation and analysis of Gallup's State of the Global Workplace report — distilled for you, with a kick.  

Let's get it.

Is GDP a proxy for measuring welfare? 

Before immediately diving into the first chapter, I notice an introductory message from the CEO of Gallup, Jim Clifton. There, Jim shares his views after also reading the findings in the report. Wait. What? 

Right off the bat, I realize I've already been living in startup-land long enough to forget that most CEO's of large corporations have no clue what's happening on the ground floor of their own companies until they read about it in a report.  

I digress.

Per Jim's message, GDP is synonymous with worker productivity, and "poor productivity" can stunt economic and societal growth. Jim is sure we can fix this. And while I can certainly appreciate an optimistic viewpoint, I can’t help but feel conflicted. More specifically, conflicted about the focus on GDP, or Gross Domestic Product.

For starters, if you ask most people, what is GDP or how is GDP measured, you're likely to be met with quite a few blank stares.  

It's kind of weird, too, if you think about it, since it's arguably the number one criteria most countries use to gauge the health of their nation's economy.  

Nonetheless, my confliction doesn't stem from the general lack of knowledge on the topic; it derives from my curiosity as to why we still use GDP to measure economic success in the first place.  

Let me explain.

The original concept of GDP dates back to 1645. It was used to prevent unfair taxation by landlords during a conflict between the Dutch and the English. 

Several hundred years later, in 1934, GDP as we know it was developed and implemented by Simon Kuznets. Kuznets was an American economist and statistician whose work would go on to receive the Nobel Prize. 

While that all sounds great, in the report Kuznets submitted to the US Congress, he warned against using GDP as a measure of welfare.  He even devoted an entire section to the "Uses and Abuses of National Income Measurements."  

In that section, Kuznets explains that the measurement of income can not also measure "the intensity and unpleasantness of effort going into the earning of income," which brings me to the core of my confliction.

MATH* (*this is not an endorsement of Andrew Yang)

M-A-T-H, math.  

GDP is calculated using the equation:  

GDP = private consumption + gross investment + government investment + government spending + (exports – imports) or GDP = C + I + G + (X – M)

Pretty much, GDP is everything that's bought and sold in a country each year, plus some other stuff.

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A focus on GDP, however, often leads to a shifting focus, away from employees and toward ratcheting up sales. No matter which way you slice it, revenue becomes king.  

You see, it isn't that small or growing companies — or most companies at all — care, specifically, about contributing to GDP.  

I mean...when's the last time you heard a business owner say: "I want to increase our revenue so we can further contribute to the Gross Domestic Product of our country!"? #Never   

So, then, how are revenue and GDP connected? 

In short, just like a company's culture starts at the top, so does the focus on increasing GDP.  Ultimately, there is a trickle-down focus on job creation and revenue growth. 

And, no matter where your company is registered, it's still registered, legally, with a country.  

That country has tax breaks, incentives, legislation, and other means to motivate your enterprise to produce more viable goods, create more jobs, invest more in the economy; you name it.  

I should probably take this moment to state:  I love the government.  I've got no issues with the government.  I am not a conspiracy theorist who thinks the government is out to get us all.  I'm just merely doing the math

When more goods and services are bought and sold, when more people are working, when the economy is "bubbling," there are more taxes (i.e., revenue) paid, and the government has more leverage and bargaining power.

If you look at it from a business perspective, it appears to be a win-win — until you get to people and company culture.

A company culture lesson from Amazon 

Take the most famous example, Amazon.

While researching on Glassdoor, I came across a review from a former manager.  In this review, the manager refers to Amazon as their mistress, and continues by stating, "...she's emotionally abusive, but she's so sexy that I go back for more punishment."  

While, at a glance, the overall reviews for Amazon seemed decent, another line from this highly-descriptive former manager caught my attention.  It was a nod to a piece in The New York Times, referencing an abusive culture.  

I had to get the full scoop. 

So, I researched.  And, article after article, video after video, I was astonished at what I'd found.  Going back years, everything — all of it — supported the original New York Times piece.

Here's some coverage of that article from CNBC. 

An extreme focus on stacked rankings, a lack of time off, lack of adequate breaks, callousness toward the sick and injured (even in the case of cancer), thousands of workers receiving government assistance while the company celebrated its trillion-dollar valuation — and we're merely scratching the surface.  

Like, how is the company you work for worth a trillion dollars, but you get paid so little you qualify for food stamps? 🤔

Luckily, the company began listening to its critics.  

In 2018, Amazon instated a $15 minimum wage that positively impacted over 350,000 U.S. Amazon workers, and they plan to reinvest $700 million back into the company to retrain and develop current employees for more advanced work, like data science. 

Amazon also raised the minimum pay for U.K. employees to 21% higher than the national minimum wage. They created spots for 1,000 paid apprenticeships that lead to advancement opportunities and a program to boost women in tech roles for the company.  

In recent years, Amazon has also made the list of "Top Companies" where people want to work — in the U.S. and the U.K.

And frankly, those changes needed to happen.  With Amazon's 30,000 unfilled job openings — in a tight labor market — anything less would likely have resulted in an implosion.

A final thought on past mistakes

Revenue and profits are great. Consumption is great. They are the point of business: to generate profit and give consumers something to, well, consume.

However, where people, culture, and the #futureofwork are headed, ratcheting up revenue at all costs doesn't quite feel like the way to go.  

Many more companies come to mind: GM, Enron, Lehman Brothers. Ahh, Lehman Brothers. A family business started by three brothers who migrated from Germany to America and made a company that lasted for 158 years before its demise due to chasing unrealistic revenue growth.  

When Lehman went bust, they had $639 billion worth of assets and $619 billion in debt and caused markets to tumble, accounting for further losses around the world and one of the worst recessions of all time.  

Speaking of recession, did you know when we have two or more back-to-back quarters where GDP shrinks, it qualifies as a recession?

And, that the U.S. Federal Reserve (I'm guessing the U.S. likely isn't the only country that does this) increases and decreases interest rates to control inflation and boost or stabilize the economy? 

I don't know about you but, something about this, to me, feels manufactured

Alright. I'll stop sounding like a conspiracy theorist now. I promise I'm not one. 👀 

So, down with GDP? 🤷‍♀️

Most economists still use GDP to measure a country's welfare and "progress." They do this by adding up the value of the dollar of that nation over time.

If you're anything like me, you already see the problem.

It's like saying, "Hey, this company is super awesome to work for!"  Meanwhile, employee turnover is off the charts, company culture is cruel, and they offer little to no company benefits or flexibility. But hey, the company makes more money each year, so life is grand, right?

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When you decide to measure a nation's quality of life, instead of increased revenue, something awesome begins to happen.  

Take, for example, GPI or the Genuine Progress Indicator

GPI has been proposed to replace GDP (it still hasn't), for reasons that would make any millennial want to do the Dougie, Shiggy, Floss, or whatever else.  

GPI covers twenty-six indicators across three main categories: economic, environmental, and social.  These three categories matter — to everyday people, to your future employees. 

Since GPI measures the overall wellbeing and welfare of citizens, its goal is to help prevent the issues that occur when focusing only on economic growth and stimulation. 

Now, take all this economics talk and apply it to your company.  

Are you asking employees what matters most for them? What's vital to making their lives — not just their jobs — better? Are you asking for employee input before rolling out a new company policy? Are you practicing a people-first culture?

Would love to hear about it, if so. 

Four-point productivity plan  

Now that the topic of GDP is buttoned up, back to the final item in Jim's introduction. 

The four primary ways we can fix low productivity. 

Here they are: 

  1. Focus on employee development
  2. Stop managing, start improving employee strengths
  3. Mission and purpose are now top employee drivers; company culture should align  
  4. Implement a Net Promoter Score (NPS) or use the Gallup Q12

At the end of Jim's message, he states that employee engagement is at 15% worldwide.  Then, he poses a question.  

Here's the question:

"What if we doubled that? What if we tripled it? Imagine how quickly that would fix global GDP..." 

And while fixing low productivity is vital to the competitiveness of an organization, in response, I leave you with this final thought.  

Instead of focusing on how we can squeeze 15% more productivity out of our employees, why not work to find out how we can bring 15% more value to their daily lives? 

Join us next week as we break down and analyze the first half of chapter one of the report, and don't forget to subscribe.

Until then, reach out to me or leave a comment. I'm happy to help. 

Join hiring managers around the world on a quest to achieve kick-@$$ company culture. 💪
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November 3, 2019

Fionna Faulk

Co-Founder & CEO, Recruitsos
Co-Founder & CEO, Recruitsos
@fionnafaulk

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