Joe Fuller: Many pundits advocate that employers should pursue enlightened self-interest in the treatment of their workers—to do well by doing good. That's a noble sentiment but does such an approach actually yield an acceptable return on investment? And where does the line fall between those issues that an employer can and should seek to address and those that remain outside a reasonable definition of their responsibility? Has Covid moved that line? Welcome to the Managing the Future of Work podcast from Harvard Business School I'm your host, Harvard Business School professor and visiting fellow at the American Enterprise Institute Joe Fuller.

My guest today brings several decades of experience and data to the discussion. Mark Peters is CEO of his family firm, Butterball Farms in Grand Rapids, Michigan. Mark co-founded The Source, a nonprofit employee assistance organization funded by private employers in Western Michigan. The Source helps companies address issues that their human resource functions are ill-equipped to deal with. It works with nonprofits and government agencies to link workers with a range of resources, from health and social services to housing and career development. We'll talk about Mark's efforts to align his vision of fairness and opportunity for workers with his business strategy. We'll also discuss the economics of good jobs and what it takes to build a coalition of employers, nonprofits, and the public sector. And we'll discuss how The Source can provide a model for similar efforts emerging around the nation. Welcome to the Managing the Future of Work podcast, Mark.

Mark Peters: Thank you, Joe. I’m super happy to be here today.

Fuller: Mark, many of our listeners won’t be familiar with your business or your background, even though you’re a published author now. So tell us a little bit about your journey into becoming a CEO and how you found yourself focusing on the issues of low- and middle-skills workers as a function of that.

Peters: So first of all, our company is Butterball Farms. My father was involved with the development of the Butterball turkey and had some of the intellectual property surrounding it, which he ultimately sold the Swift & Company and licensed the name back from them for the use with butter and margarine products in the United States. I grew up in our family business, started when I was 12 years old. And I think starting on the plant floor of our business and getting to know the people that worked in our organization is really what got me interested in the disparity and the differences in their lives, compared to the life that I lived when I went home. I grew up in the context of a conservative Christian home, where we believe everybody’s created in the image of God. And we grew up in this country with everybody’s got inalienable rights, but the way I saw people treated in our enterprise didn’t seem to match up with that very well. And I saw people who struggled to survive every day and lived in high-stress situations and were stuck in low-wage jobs with, really, no opportunity to go anywhere. And I really began to question if the actual structure of the enterprise wasn’t somehow contributing to these system problems that we see in America today. And over the years, I think what I’ve learned is that we, as business leaders, have an opportunity to have an impact with our enterprises, and we often don’t think of our enterprises that way.

Fuller: Well, let’s talk about your transition from being in a family business to running the family business and how you started to try to change the operating model, the company, to reflect these issues that you just raised, and also a couple of times when you faced pretty challenging times as a CEO, how you engaged the workforce in trying to overcome those challenges.

Peters: My father died when I was 30 years old, and I had no training, and I had no advisers, and basically got handed the family business without, really, any blueprint for running it. And so I was pretty idealistic. And I wanted to make the cultural changes that I thought the business needed, and I did so at the financial peril of the business. So in about five years, I almost bankrupted the company. And it wasn’t until I truly engaged everybody in the organization to help me solve those problems that we were able to walk out of the financial valley that I created. And it was really, truly working side by side, hand in hand, with people on the plant floor trying to figure out where our productivity and waste and safety issues were coming from and how to fix them on a day-in and day-out basis.

Fuller: When you think about engagement and what really turned the business around, could you just speak a little bit more about what that took in terms of what you did and how you chose to go about engaging people?

Peters: In terms of what we did—and relative to The Source—it was really starting to understand the problems that people were bringing to work and having some concern over helping people solve those problems. I think engagement, as defined by helping somebody else be successful, is probably a better way to look at it. The most interesting thing about this to me is that this is not a skill set that’s absent in our businesses. If we’re running a successful business, we are solving problems for our customers all the time. And if we take that sort of an approach with some of the people that work for us—especially the frontline people who live very destabilized lives—I think you come to a very different definition of engagement.

Fuller: Well, Mark, you mentioned The Source, which is an employer group up in Western Michigan, where you’re located. Can you talk a little bit about what it is and how it came into being?

Peters: Absolutely. The Source is a 501(c)(3) nonprofit organization. Right now, we have 25 member companies, and it covers 9,300 individuals. And we work with over 50 different local organizations to provide “barrier resolutions.” The Source has also been replicated—in an organization called WorkLife Partnership—across the country. And there’s 114,000 people in their network across the country. And in The Source in West Michigan, we track the return on investment. We talked about that, and it’s 260 percent over the 19 years that we’ve been tracking it back to our member companies. And again, that’s primarily tagged to a retention number. But when we started, we didn’t really know what we were doing. There’s a gentleman in West Michigan, Fred Keller, who owns a business called Cascade Engineering. He was doing some interesting triple bottom line work with his company, and I was interested in doing the same kinds of things. He helped me get 16 business leaders together, and he kind of made this triple bottom line pitch. We outlined the organization, and I made the ask: $500 a month for 12 months to see if this idea would work to create this new organization. And I only got eight of them to sign up. We got matching funds from the local community foundation, and we had enough money to get started. And I hired an executive director, actually, who came from my HR team.

Fuller: So, Mark, tell us. What does The Source do? And why did it take a collaborative effort from multiple employers, as opposed to something that you or the Cascade Engineering people could have just done on their own?

Peters: One “aha” was from the work that Fred was doing within Cascade and really trying to get people to move from welfare to career. But the other “aha” came from some of the nonprofit boards that I was serving on, and the understanding that some of the clients of the nonprofits were probably working for me. And the people who were working for me didn’t even know about these services in our community. So realizing that I didn’t have enough bandwidth or budget or financial resources or staff to address all the needs that kept people from coming to work or kept people from being present and productive when they were at work, that I needed—in order to address those problems holistically—I needed far more scale to do that. And so, in talking to other employers within a half a mile of my plant, I realized that they needed the same sorts of things. So I thought, if we could design an organization that could really become the specialist to take care of our employees’ needs—so that they can stay at work and stabilize their lives and, ultimately, become more productive and secure in their lives—that we’d have a better workforce.

Fuller: I think we can all imagine the types of challenges that people face outside of working hours. I’ve written extensively about caregiving and its effects on career paths, productivity, what’s called ”presenteeism”—where people show up for work, but they’re so distracted that they’re not being productive, which is one thing when you’re a white-collar worker working on a pitch deck, quite another thing if you’re working on a manufacturing line. What sorts of life issues were most important? And how is it that you engage these resources you mentioned as an employer? Because I associate that with kind of social services, where people, individual citizens, present themselves and seek help, as opposed to an employer acting as some type of broker or market maker.

Peters: I think that the top three things that The Source deals with is really housing issues, transportation issues, and childcare. None of that would be a surprise to you. But there are all kinds of other things. There’s domestic violence, there’s substance abuse, there’s kids being sick, right? Healthcare issues. The other thing that they deal with is, if they have any sort of a social-service benefit, they have to go see those people. And you’re usually in different offices in different parts of the city, and they’re usually only open during the day. And so, if you’re going to be holistic about addressing some of these problems, again, you really just cannot do it as an employer. So having an expert intermediary, like The Source, you sort of pay that organization so that they can do all those things. And in our case, The Source resource navigators will actually come into our workplace and meet with people, or people can go to their offices and meet with them, or they can do it online if that works better for them now. But the idea, really, is to directly connect them to the services that they need without them having to travel all over town and spend tons and tons and tons of time, which, if it doesn’t come out of their workday, it comes out of their family day, and it makes it very difficult for them to ever get to a point of stability.

Fuller: So you mentioned a phrase, “resource navigator.” Is that a job title? And if it’s a person, tell us more about their role.

Peters: So the resource navigators are employed by The Source, and every one of the member companies is assigned at least one resource navigator, depending on the size of the organization. It could be three—up to three, probably. And those individuals will have office hours with the member company at their sites—some of our member companies have more than one site—and then they’ll just meet with employees and address the needs that they have. So they may sit there and make appointments for them with somebody about housing or banking or helping them get the skill sets they need to become a home homeowner. They may help them make a doctor’s appointment. They may help them talk to their school counselors for their kids. I mean, the myriad of things that they do is astounding.

Fuller: And is this something where an employer or a supervisor says, “The resource navigator comes in every Wednesday. You should go meet them,” or is it purely voluntary? Would an employer make engaging The Source condition of continued employment?

Peters: I don’t know of any employer that’s ever done that, said, “You have to go see The Source, or you don’t get to work here anymore.” It’s normally voluntary. It’s confidential. The supervisors—we do encourage the frontline supervisors, managers, to be very aware of the resource of The Source. Our company embeds it in part of the orientation, so people know about it right from the moment they start working for us. The employers that do that actually get the best return on investment numbers from their membership in The Source.

Fuller: Well, that’s exactly what I want to talk about. Presumably the employers are funding The Source. What’s the pitch? Let’s say I’m about to open a new facility near Butterball Farms, and the Chamber of Commerce is going to have an event for me. And you go, and you buttonhole me and say, “I want to talk to you about something.” What’s the pitch?

Peters: Well, I’d bring some of the numbers that The Source has. But the interesting thing is, where we really see the impact is on retention and turnover. So one of the things that surprised me in the work around The Source is how many of us employers don’t really know our true cost of turnover. One of the understandings that we have is, the cost of turnover is $3,500 per event. Now, most of the research would say that’s a low number, and that’s okay. And we say that, if there’s four barrier resolutions—so four problems that have been solved by The Source in your organization—it counts for one job save. So the more often your organization interacts—or the people in your organization interact—with The Source, and The Source solves problems in those individuals’ lives for them, the better the retention numbers get.

Fuller: So is that the definition of barrier resolution—issues that I’m unfamiliar with?

Peters: Yes. When we say barrier resolution, we mean something like, if somebody gets an eviction notice, The Source goes and helps them solve that so they can stay in their home or their apartment. It goes all over the board if they’re having problems with their childcare, if The Source helps them solve the childcare, it’s a barrier resolution. Again, it allows them to be at work, it allows their kids to be taken care of. It could be helping somebody in their household get into a substance abuse program. Again, something that takes people out of the workforce—either physically or mentally, as you talked about presenteeism—any of those things contribute to higher rates of turnover for us as employers. And if we can reduce those, it strengthens our workforce.

Fuller: So let’s go back to that fictional Chamber of Commerce welcoming event for me, the new facilities manager for a plant that Acme Industries is opening down the road from your operations. What are the types of objections or doubts that you’ve heard from people you’re trying to solicit to join The Source? And how do you put people at ease or convince them that, in fact, their preconceptions about what drives turnover and the economics of turnover are actually misplaced?

Peters: In the beginning, we talked about doing good is good for business. Since we started The Source in 2003, we now have almost 20 years of data. So we can actually demonstrate how these barrier resolutions impact people’s lives and help them stay at work. And we have hundreds of people who have stayed with employers that are part of The Source and have been promoted, and even some that have moved between source member companies. People will actually request to go work for a Source member company, because it’s almost like it’s a cultural determinant for them and of an employer who’s interested in their success.

Fuller: Very often, when I’ve talked to employers, when they have a turnover issue, they almost always ascribe it to economic reasons: “Well, Amazon built a warehouse nearby, and they’re offering $2 more an hour than I can pay.” And they don’t understand, or they have only a vague sense of, things like transportation issues, health issues in the household—whether it’s a substance abuse issue or a chronic care, chronic disease, disability issue, a caregiving issue—is actually affecting the capacity of that individual to either stay employed at all or stay employed at a place that has unpredictable shifts, or it’s remote enough so you have to have a reliable personal car. Are people buying into the importance of what’s happening outside of the workplace, or do you have to convince them that that’s a much bigger driver than they may anticipate?

Peters: I wish it were an easy argument. As employers, we get used to pulling a few levers, and it’s usually wages and benefits, without having to really think very deeply about what are the people that are coming to work for us experiencing. The other thing that I like to say is, look, if we can solve for these complexities for the people who are working for us already, that’s our best chance of success. If we can do this with the people that are already working for us and create an environment that they want to be in, and that they know they can grow, and slow down the exit, then we can start working on the people coming into the organization. To be honest, there’s a lot of people who don’t understand their own economics. I mean, they will leave a full-time, 40-hour-a-week job with benefits and a great 401(k) plan for $2 an hour more. The Source resource navigators, who can talk to that individual about what they’re going to give up if they leave the job, are also very helpful, because a lot of people don’t do a good job of putting that in a larger context in their lives.

Fuller: I can imagine we’ve got some listeners saying, “Well, gee, I understand that I may have employees that have loved ones at home who are chronically ill or with a substance abuse problem. Or I’ve started the second-chance program for people who were formally incarcerated, and I’ve followed all the guidelines and, gosh, how far do I have to go? These are adults, and eventually they have to take care of themselves, to a degree.”

Peters: Right. At the risk of maybe not making a lot of your listeners very happy, I think we should take on as much as we can. We just can’t do it ourselves. We can’t have our HR teams doing it. And creating organizations or structures like we did with The Source, it’s really our only hope of getting massive amounts of people out of this churn of low-wage jobs. But that’s a really hard proposition, and that’s why we need to build these structures, as outlined in the book The Source. One of the things that we’ve done really well with The Source is to demand a certain level of value that, when they meet with people, they do, in fact, resolve barriers, that there’s a performance level that’s expected. If we’re not getting the services, we’re not going to pay for them.

Fuller: So when you talk about people providing those services, I’m assuming you’re talking about both state agencies, maybe county or municipal services, and also charity, social entrepreneurs, outfits like that.

Peters: For us to go out and, as employers, interact with the social-service systems is a very difficult thing. Again, The Source team works with over 50 different organizations within West Michigan to solve problems for the people that work for us. They act as that translator and that connector, so that we don’t have to take our business resources—especially our personnel resources—to do that thing for the people that work for us. But we can still do it with a high degree of performance and excellence.

Fuller: Have the challenges that you’re facing through The Source changed materially over time?

Peters: Yeah. I would say that the top three are, consistently, housing, transportation, and childcare. I think you start getting into healthcare issues as well. I think that the similarities between companies are probably more linked to wage levels. So, in the $12–$20 an hour range across companies, they’re pretty similar. I think when you start getting into some higher-wage categories, and homeownership becomes more possible, people start looking for higher education for their kids. I went to The Source and took a public speaking course, so there’s applications for all of us.

Fuller: What is the employment situation currently in West Michigan in terms of ... are you also there experiencing the type of tightness in the labor market that we read about nationally? And if that’s the case, how does The Source help alleviate that by maybe drawing more people into the labor market or keeping them in the labor market?

Peters: Well, I would say that West Michigan is not exempt from the trends that the rest of the country is experiencing. But I do think that the amount of destabilization that has happened in people’s lives has just never been experienced, at least in my lifetime, 58 years. I think that’s an opportunity that we have as employers, where we get to design that work environment in a way that becomes a place of attraction. And if people find that place of stability and that place where opportunities are given, and they know there’s a structure to help them work through how to take advantage of those opportunities, I think we’re better off. I think that, across The Source member companies, our experience rating is better than what the average marketplace is.

Fuller: It’s interesting to go to some fundamental issues of job design, thinking about it through the lens of, how do I design a job and benefits and other support that maximizes the chances of continuity of employment, as opposed to maximizes productivity of the current worker in the role, which is the traditional logic of work. Most of work is still rooted in the designs of Frederick Taylor and scientific management, where we’re trying to design jobs where we cause the person to be as efficient as possible. And that often comes at the cost of really thinking through how to keep engaged with that worker, keep them enthusiastic about what they’re doing and committed to going beyond just what they’ve been told they’re supposed to do—to things they ought to do but are not integral to their role. Mark, let’s go back. You mentioned the WorkLife Partnership chapters beyond Western Michigan that share, presumably, quite a lot of the DNA of The Source. How did that get started? What was your role, the role of The Source, in propagating that and catalyzing it? And if there are listeners who are curious about what they could do to get started—or to at least investigate the WorkLife Partnership—what do they do?

Peters: In the beginning, once we had a few years under our belts with The Source, we got the attention of some sector skills alliances, and there were a few organizations around the country that wanted to replicate what we were doing with The Source. And this group out of Denver, which ultimately became WorkLife Partnership, did pattern their organization after The Source, and they put their arms around the other adaptations of The Source around the country. So going to their website would be an easy thing to do to get connected with them. And they now operate in 28 different states, and they cover financial services to manufacturing to service industries.

Fuller: Are most of the participants family owned? Small, medium enterprises? Or are there some big, iconic public companies that are involved?

Peters: Right. So I think one of the things that is complementary to what we started at a small scale in The Source is that there are some very large companies now that work with WorkLife Partnership. Starbucks is probably the largest example, currently working with WorkLife Partnership across the country. And locally we have Spectrum [Corewell] Health. Herman Miller [MillerKnoll] is another one that’s a member of our local Source organization. So there are large companies that have determined that their standard benefits, including their EAP programs, don’t actually cover all of these things that disrupt people’s lives, and that there really is, there’s a gap in what they’re doing to help their people be successful. And so they’re making investments in organizations that are Source-like in their structure.

Fuller: In describing both what you’re doing in your company and also The Source, you’ve talked lot about maintaining continuity of employment, removing barriers to continue to stay employed and build a career. What about upskilling? What about creating opportunities for people to advance? Is how does that factor into the program?

Peters: The Source goes out and interacts with educational institutions, as well. We have a great community college in West Michigan that can actually bring coursework into a common location across employers, and we get some benefits in the cost of those classes by doing that. There’s also resources available for training and development that The Source can help the individual companies find. And interestingly enough, they’re common across the companies. So we can go to market and source some of those services for the people that work for us with a little bit of a discount when we do it through The Source, if there’s common courses that we need to have. I do think that we need to start thinking about education and development for the people that work for us in a very different way. The education and development benefit that we’re going to need to offer in the future is not going to be contingent on somebody staying with our companies. It’s going to be the greens fees to get great people to come work for us. And that’s not very common in the conversations that I have with employers these days. But I do think that, as the demographics change in this country, it’s a benefit we’re going to have to wrap our heads around as employers.

Fuller: Certainly, our research indicates that what employees are looking for is an employer that’s going to continue to invest them, give them at least the opportunity to grow, to earn more, to get advanced, to be more productive, to keep learning. And you’ve got to win at both levels. You’ve got to keep the workers in a position to build a strong skills base and then keep moving that horizon out for them so they don’t start looking for $1.50 more down the road or just start losing their commitment to the organization. So, on that note, just one final question. What do you think is going to be the definition of a good job 10 years from now—through the lens of an employer? When someone says, “Butterball Farms offers good jobs,” what’s that going to mean? What’s the standard going to be?

Peters: I like the way that you asked that question, Joe, because it gives me the opportunity to answer it through my particular company’s lens. And I think, for me, the answer to that question is, Butterball Farms creates great jobs because we earnestly take on the responsibility of helping people figure out what it’s going to take to be successful, whether or not that’s a job with us or whether it’s with another employer. One of the interesting things in some of the work that I’ve done around this is that for most of our companies, we can promote people to a certain point, and then there’s a gap. Or there’s somebody who’s not going to go anywhere for a while. And so somebody is limited out inside each of our organizations at different points, which means if they’re highly motivated or they’ve gotten bit by this bug that, hey, they can take on more education and more learning, and this is fun and “I want to go do some more with it.” We’re not going to be able to promote people at the rate that they’re going to need to be promoted to stay active and growing in our economy. So I think one of the big things that we’re going to have to learn as employers in the future is being okay and possibly even helping people find that next job, even if it’s not with our company. The world is changing so fast, and our businesses are changing fast, and the roles and responsibilities of people within our businesses are changing so fast that, if the best we can do is to continually prepare people to be more employable—with us or anywhere—I think that’s going to make a great company to work for.

Fuller: Well, Mark Peters, CEO of Butterball Farms and originator of the concept of The Source, which is now growing across the United States happily, I’ve just been delighted to have had you join us on the Managing the Future of Work podcast.

Peters: Thank you, Joe. It’s been my pleasure.

Fuller: We hope you enjoy the Managing the Future of Work podcast. If you haven’t already, please subscribe and rate the show wherever you get your podcasts. You can find out more about the Managing the Future of Work Project at our website hbs.edu/managingthefutureofwork. While you’re there, sign up for our newsletter.