Speaking out politically as an employer now yields more than a 10% salary increase

Remarkable research out of the United States shows that employers who dare to take a political position benefit more from it in their recruitment than employers who increase their salaries by more than 10%. How exactly does that work?

Victoria Egba on December 01, 2023 Average reading time: 4 min
Share this article:
Speaking out politically as an employer now yields more than a 10% salary increase

Now that polarization in society is sometimes high, there are few employers who dare to burn their fingers by making political statements. Afraid of commotion on X, or afraid of accusations of ‘wokeism’, ‘greenwashing’ or ‘pinkwashing’, many people prefer to stay away from sensitive conversations. However, a recent American research sheds a different light on the matter, and shows that employers who dare to speak out on politically controversial issues are actually much better positioned in the labour market. It turns out that a 10% salary increase cannot compensate for this.

Speaking out politically is no match for a 10% salary increase

The researchers came to their conclusion by looking at how companies responded to the Supreme Court’s controversial decision in Dobbs vs. Jackson , which reversed the nationwide right to abortion in the US. In their research, titled: We’ve Got You Covered: Employer and Employee Responses to Dobbs v. Jackson, Emily Nix, Pawel Adrjan, Svenja Gudell, Allison Shrivastava, Jason Sockin, and Evan Starr show that companies operating here anticipated and immediately gained appeal on the labour market.

3 billion clicks analyzed

For example, companies that publicly pledged to cover out-of-state travel for their employees to obtain an abortion or related reproductive health care such as miscarriage care reaped the rewards almost immediately, according to an analysis of 3 billion job seeker clicks on job postings and 6,000 jobs. 5 million business reviews on Indeed and Glassdoor, covering nearly 500 companies.

‘Companies that speak out on controversial issues benefit from this in recruitment.’

“While polarizing political views divide friendships and families, some wonder why politics should come into the office,” Nix said. ‘But when companies decide to speak out on controversial social and political issues, there are benefits for staff that are difficult to ignore. Based on our research, we see that companies that made announcements about reproductive care after the Dobbs ruling benefited greatly during their recruitment.”

Women and location

The study found that the gender and location of employees were two important factors. Companies with a higher proportion of women – from the CEO to employees – and companies in predominantly Democratic states were found to be more likely to publicly announce their commitment to covering reproductive care. ‘When we compare the companies that announced this with their counterparts that did not, our research shows that vacancies from companies that announced this receive 8% more interest from potential job seekers.’

‘Companies would need to increase wages by 12% to achieve a similar increase in job seeker interest.’

Particularly in states where the Dobbs ruling led to an immediate abortion ban, this positive jump in hiring can be seen for traditionally more female-dominated positions, the study found. “This result suggests that company policies could be a lifeline for the women most affected by the abortion ban,” Nix said. “These types of announcements have a major impact on attracting new workers: companies would have to increase wages by 12% to achieve a comparable increase in job seeker interest.”

Reflection

Yes, political statements always lead to a backlash, the researchers see. “On Glassdoor, we find an immediate 8% drop in how current and former employees rated senior management and company culture. This decline in satisfaction is particularly pronounced in male-dominated roles such as engineering (the decline in satisfaction is 277% steeper than average) and data scientists (where satisfaction fell 143% more than average).”

‘The average deterioration in job satisfaction could be driven by a vocal minority.’

There has also been a 325% increase in the use of the word ‘ woke ‘ in the cons reported on Glassdoor. “That suggests that some employees do not agree with a “woke policy” in the workplace,” Nix said. ‘We also find evidence that the composition of employees leaving negative reviews changed after Dobbs vs Jackson in a way that suggests this average deterioration in job satisfaction could be driven by a vocal minority.’

Blessing for recruitment

Her conclusion based on the research is that these companies generally benefited from their announcements, ‘at least when it came to their workforce. We find that companies making these announcements increased wages by 4%, likely to offset the dissatisfaction of a vocal minority. But the benefit to recruitment was equal to what could’ve been achieved with a 12% increase in wages. These companies will therefore most likely have greater access to eager future employees without paying a wage premium, an important labour market advantage over their competitors.’

“These companies will most likely have greater access to eager future employees.”

While it will take some time to see whether this increase in hiring translates into long-term gains, Nix says the early results are clear: “It is unknown how each company weighs the economic and moral reasons for getting involved in polarizing issues, but the workforce benefits we document suggest that the companies that announced their support for women’s reproductive rights likely made the right choice. By offering to help women after Dobbs, these companies reaped the rewards in terms of recruitment.”

If you liked this article and want more insights on attracting and retaining the best talent in Europe, subscribe to ToTalent’s weekly newsletter. You’ll get exclusive content, events, and expert insights.

 

Read More:

Share this article:

Premium partners View all partners

Intelligence Group
Ravecruitment
Recruitment Tech
Timetohire
Werf&

Read the newsletter about total talent acquisition.