Rent the Runway CEO Jennifer Y. Hyman bravely admits her company didn’t always treat employees with the fairness and compassion they deserve when it came to doling out perks and benefits.
The problem, Hyman says in a CNN interview, is she "just copied what best-in-class companies were doing” when founding the company. "It took a moment to realize that just because something is an established business practice, it doesn’t mean it’s right."
In a stunning and, at the same time refreshing, opinion piece in The New York Times, Hyman writes: "I had inadvertently created classes of employees — and by doing so, had done my part to contribute to America’s inequality problem."
In the Times, Hyman says business executives have a responsibility to be moral leaders. "It’s time for business leaders to step up and fulfill not only their fiduciary duty to shareholders, but also their moral duty to society to treat every worker equally."
That starts with equalizing the benefits of hourly and exempt employees, she says. In April, that’s exactly what she did at Rent the Runway, where customers can rent and return designer dresses.
"Our warehouse, customer service and store employees now have the same bereavement, parental leave, family sick leave and sabbatical packages that corporate employees have," Hyman says.
The 2018 Human Capital Insights Report from Gallagher urges employers to re-examine benefits strategies, especially in the face of greater competition for talent and new demands from younger workers. "First and foremost, there’s a need to center on the full spectrum of organizational wellbeing by strategically investing in employees’ health, talent, financial security and career growth," the report notes. "And developing benefit and human resource (HR) programs at the right cost structure to support a multigenerational workforce."
The goal is to create a "destination workplace," Gallagher says, by looking at both "human and total compensation."
But while the Gallagher reports that "determining the relative value of jobs should be part of the plan," Rent the Runway set out to remove the benefits divide, whereby non-hourly employees received generous parental leave, paid sick leave and flexibility to work from home while hourly workers did not.
Hyman believes believe her new policies will result in higher retention rates, lower training costs an improved productivity.
"I want Rent the Runway to be an example of what a modern workplace should be — a leader in creating a more human workplace, where the heart is just as important as the head, and where we show that we care about each and every member of our team equally."
Hyman challenges that status quo when thinking about benefits and creating a we’re-all-in-this-together culture at Rent the Runway. At the same time, the Gallagher report makes an important point that benefits are only part of employees' physical, emotional, professional and financial well-being.
As Hyman says, however, don’t just copy a best-in-class practice and assume it will work for your organization. But do think in new and innovative ways that will give your organization a competitive edge.
What do you think about Rent the Runway’s remarks that business executives have a responsibility to be moral leaders? What is HR’s role?