00:00I had inadvertently created second-class citizens in my own company and perpetuated income inequality.
00:08I don't think that this responsibility should rest at the whims of business leaders.
00:13That's Rent the Runway CEO Jennifer Hyman, and she's pointing out what no CEO likes to admit,
00:20that most companies in the US have two tiers of employees. There are the salaried employees who
00:26receive health care, paid family leave, paid vacation days, and paid sick days. They can
00:31even work from home. But then there are the hourly employees who work in stores, call centers, or
00:37warehouses. They usually don't get any benefits other than their paycheck. In the US, this is how
00:43some of the biggest companies like Starbucks and Walgreens have decided to keep costs down,
00:49but increase profits while still retaining corporate talent. But this is also contributing
00:54to America's growing wealth inequality problem for anyone who isn't corporate talent. Jennifer
01:01realized that she was perpetuating deep-seated social problems by having these two tiers,
01:06so she got rid of them. She's probably not profitable in just using this as a PR stud, so
01:11who cares, right? I'm Elisa Kreisinger, and as a white woman on the internet, I have a lot of opinions.
01:17Each week, I set out to prove myself wrong by talking to an expert who might not have all the
01:22answers,
01:22but they certainly know more than I do. That's why this is Strong Opinions Loosely Held.
01:28When Rent the Runway CEO Jennifer Hyman started her company at 28 years old, she formed her HR
01:35policies based on other successful companies that she admired. Remember that two-tier system? Yeah,
01:41she did that. But then she realized that that might not be the best idea.
01:45We had super generous policies for our employees that worked in our corporate office. And then we
01:53had policies that kind of scraped the bare minimum in our retail stores or on our customer service
01:58team in our warehouse. I had inadvertently created second-class citizens in my own company
02:05and perpetuated income inequality. I knew that the only moral thing to do was to equalize our benefits.
02:13But after Jennifer equalized benefits for all of her employees, the response was a little different
02:19than she expected. They were looking for what the catch was. It was really emotional and humbling for me
02:28to understand that for the thousand-plus employees who work in my warehouse, nothing has ever been given
02:36to them because it's the right thing to do. I don't think that this responsibility should rest at the
02:41whims of business leaders. It was in the 1940s where we decided as a country to privatize benefits,
02:47and we took that responsibility away from the government. And what's happened is, in the case of
02:53let's say parental leave, the average American woman goes back to work 10 days after having a child
03:00right now, on average. When we have trusted the business community to make the right decision,
03:05they're not making the right decision, and they're hiding it behind words of,
03:09well, I need to do what's best for the bottom line. Which is very short-term thinking,
03:14because the bottom line is about growing a company over time. Americans tend to support policies,
03:20like the paid family leave Jennifer mentioned, but only 14% of us actually get it from our employers.
03:25Now, this is way behind most other developed countries. Look at all these countries kicking our asses.
03:38This isn't new news. Right. Like, the thing about this is, we're sitting here on this couch
03:43talking about how anything I've just said, like, as if it's revolutionary, it's not. It's a matter of catching up
03:49to where most of the world actually is. I think that if government is not going to step up and
03:55provide
03:56even a basic social safety net to its citizens, then business leaders have to do it. And businesses
04:03are doing it, for certain employees, like CEOs. For example, when Reed Hastings needed a break from
04:10building Netflix, his board let him go live in Italy for a year with his family.
04:18And when Marissa Meyer had a baby, the former Yahoo CEO, who eliminated the company's work from home
04:24policies, had a nursery built in her office. But most people working in warehouses, call centers,
04:31and retail stores around the country, don't have these luxuries.
04:35A CEO is already paid 271 times more than their average employee. So when they have a child,
04:41why are you also giving them a nursery in their office and a year off to spend time in Italy?
04:47Right, right. They got the money.
04:48They have it. Money buys flexibility.
04:52Right.
04:52The Dodd-Frank Wall Street Reform Act was passed in 2010, and it required corporations to disclose
04:58employee pay. Well, what we learned from that was that CEOs make a lot more than their employees.
05:05Like a lot more. For example, Whirlpool's CEO makes 356 times more than their average employee.
05:13And Honeywell's CEO makes 333 times more than the average employee.
05:19But do business leaders have a moral responsibility to their employees beyond making money?
05:25You mentioned that it was important for business leaders to also be moral leaders.
05:29What do you mean by that?
05:31Every business leader has to stand for something that's more than just dollars and cents.
05:36Because I've been given an opportunity to build a company, I have a responsibility
05:42to make the world a better place through my company.
05:45Now, I think a lot of people are going to say,
05:47well, you can't be profitable and have morals. What would your response be to that?
05:52I think that's bull .
05:54I think it's absolute bull . If business leaders are not doing it, who will?
05:59It's time to take this responsibility as a business leader seriously.
06:04And to not just use it as an opportunity to reap just solely financial benefits.
06:10I think a lot of people think that when you provide benefits to employees, you're less profitable.
06:14Since you guys have equalized benefits for all of your employees, have you been less profitable?
06:19No, we're not less profitable. And I think that doing well by our employees is something that
06:24will make us more profitable over time, not less.
06:27Talking to Jennifer made me realize that treating employees fairly isn't only in the best interest
06:32of employees, but it's also in the best interest of companies. As our government removes or refuses
06:39to install the social safety nets that every other developed country has, it's good to know that
06:46CEOs like Jennifer exist. After all, a company is only as good as its workforce.
