I’m a leader in private equity and see a simple fix for America’s job-quality crisis: actually give workers a piece of the business

Decades later, I see the same tensions playing out across the American economy. The new American Job Quality Study, conducted by Gallup and developed by Jobs for the Future, the Families and Workers Fund, and the Wee Upjohn Institute for Employment Research, aims to measure what makes a job “good.” It addresses five things: financial security, safety and respect, opportunities for growth, a voice in decisions, and a manageable schedule. By this definition, only about 40% of American workers have good jobs.

As an investor, I evaluate hundreds of companies every year, and this data is consistent with what we see on the ground. Many companies don’t even measure employee engagement or quit rates. What cannot be measured certainly cannot be managed. We routinely see companies that have such high turnover that they rehire their entire front line every few years. All this chaos is bound to spill over into other areas such as safety, since less experienced workers are more likely to get hurt. In one particularly ironic case, one safety equipment manufacturer’s injury rates were three times the OSHA standard.

For workers, the consequences are clear. People who work in high-quality jobs experience greater health, happiness, and greater life satisfaction. But it is no less important for companies. Every “human” statistic has business consequences. When you replace your entire front line every few years, you’re wasting resources on recruiting, training, and onboarding. If you have a safety issue, obviously that’s terrible for the workers, but you’re also wasting money on workers’ comp and lost work days. And if safety is poor, product quality is usually poor as well because both are a direct result of poor processes and disengaged colleagues.

This new study brings all of these elements together into one clear, data-driven picture. It highlights the reality: we are stuck in a perilous cycle. High turnover discourages investment in people – things like upskilling, diversity training, and career development. The workers feel this and give the bare minimum in return. Leaders begin to see employees as “bosses” – interchangeable units of work. Empathy erodes. Companies focus their attention on the next quarter, and workers keep their eyes open for a better offer. Everyone falls into the trap of short-termism.

How to break the cycle? Changing the way companies operate; Empowering workers to think and act like owners.

That’s why my work as an investor has increasingly focused on employee ownership broadly as a tool for uplifting workers and changing corporate cultures. Over the past fifteen years at KKR, we have partnered with more than eighty companies to give stock ownership to approximately 180,000 front-line employees. When it’s done well, it changes everything.

I’ve seen factory workers start tracking quality returns with the intensity of CFOs. Engagement scores go up, quit rates go down, and productivity goes up because people finally feel respected, trusted, and included. They have a stake and a voice. They can see how the business is going, and how their efforts are driving the numbers.

Just last month, we completed our investment in an insurance services company called Integrated Specialty Coverage. Employees who had been there for at least three years received shares worth 100 percent of their annual income — a bonus that did not replace any of their regular salaries. More permanent workers performed better, with some receiving three years’ wages. In addition to significantly boosting its growth rate and profitability, the company was rewarded with engagement scores at the top of its peer group and drop-off rates by more than half.

Equity sharing is not a magic bullet. Employee ownership only works when combined with education, transparent communication, financial literacy training, and worker voice. It is also not a substitute for wages or other benefits – and it is not charity. It is a tool for cultural alignment and performance improvement. It is one of the few structural levers we have to shift incentives away from the short term and toward shared success.

Studying the quality of American jobs is important because it gives us a data-supported picture of what too many Americans know from experience: that most jobs do not provide dignity, stability, or a path forward – and we all reap the consequences. Let’s take the lessons from this study and apply them. It’s time to start rethinking how value is shared, so that the people who create it can share in it. I’ve seen what happens when they do that. My father would have considered this to be high quality work.

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