Credit: Courtesy PayPal

Thanks for reading our briefing about what companies are doing to navigate the continued reality of remote work, to reopen safely, and to reset their practices for the long-run. You can sign up here to receive it by email as well.

The Virus

The latest virus forecast: The US has had a 40% increase from two weeks earlier, averaging about 260,000 new cases per day. Thursday was the deadliest single day of the pandemic in the US, with over 4,000 deaths for the first time. CDC director Robert Redfield predicted the outbreak would get worse before declining in February and said the storming of the Capitol by unmasked rioters would likely be “a significant spreading event.” The FDA warned Friday that existing coronavirus tests might not detect newly discovered variants, though said the impact isn’t significant so far and it’s working to resolve the issue. 

The business impact: US employers cut 140,000 jobs in December, the first net decline since the spring, leaving the US with more than 9 million fewer jobs than at the start of 2020. The leisure and hospitality industry suffered the biggest losses, though should bounce back when people travel and eat in restaurants again. Some manufacturers are having trouble staffing positions due to absenteeism and competition from e-commerce jobs and are resorting to putting their own executives on assembly lines.

Focus on Employee Financial Health

The practices we need to reset businesses to be fairer and more resilient already exist in many places—they’re just not always easy to find when you’re in the throes of managing your career or your team. My goal has been to scour for them and highlight what I find. 

Today I’m writing in some detail about an important effort at PayPal to take responsibility for and boost its employees’ financial wellness. I’ve been following this over the past year as PayPal rolled it out and recently spent time with company executives to better understand the details. Their pioneering approach offers a model for others to study and implement.

What PayPal is doing:

The financial technology company in Oct. 2019 announced a four-part program that does the following:

1 – Lowers the cost of health-care benefits. PayPal reduced the cost of employee health-insurance premiums by about 60% for entry level and hourly workers who represent roughly one-third of its workforce. Health-care premiums can be one of the bigger expenses for families, and are regressive in nature—they’re generally the same regardless of income, so represent a bigger percentage of pay for low-wage workers.

2 – Makes every worker a PayPal shareholder. Every employee regardless of their level received stock grants and now has the option to receive stock as part of their compensation. This is important because stock ownership is heavily skewed toward high-income Americans, making it a major contributor to wealth inequality. PayPal’s shares have more than doubled over the past year, which means those grants are even more meaningful.

3 – Raises wages for lower-paid PayPal employees around the world. The company says it was always paying at or above market rates. But as part of its new focus on financial health, PayPal saw that there were places where it needed to provide additional raises.

4 – Provides financial wellness education and coaching for all employees. In addition to personal finance coaching, PayPal provided staff with an app from Even Responsible Finance that helps budget expenses and savings, and allows them to access their earnings even before the next paycheck if needed.

PayPal created a new metric that it uses to guide its financial wellness efforts and track its progress. It’s called net disposable income (NDI). This is the income that employees have left after paying taxes and essential expenses like food, housing, and transportation. PayPal tracks NDI as a percent of the employee’s compensation.

PayPal set a goal that its lowest-paid workers would achieve an NDI of at least 20%, from a little as 4% in some places when it started. By the end of 2020, it expected to hit a 16% NDI for roughly the lowest-paid one-third of its workforce. PayPal picked the 20% target because its analysis suggested that level would allow people to “save and manage their financial health in ways that would give them more stability and security,” says Franz Paasche, senior vice president for corporate affairs.

How PayPal got there:

PayPal is one of the Silicon Valley financial technology giants, with a stock market capitalization of $284 billion. But many of its roughly 23,000 employees are hourly workers in call centers and other areas of its operations. 

The company in 2017 set up an emergency relief fund that it put $5 million into for employees to tap for grants when they experienced some unexpected financial crisis. “One sign of trouble came from a trend that we saw in applications to this fund,” PayPal CEO Dan Schulman has written. “We found urgent requests for help were increasingly the result of everyday events, like an unexpectedly steep medical bill, a student-loan payment, or a car breaking down.” 

In 2018, PayPal surveyed lower-wage and entry-level employees and found that almost two-thirds reported sometimes running out of money between paychecks. “This was disappointing and surprising, but provides a valuable lesson to other leaders,” Schulman explained in an article coauthored with Paul Tudor Jones of Just Capital. â€śAlthough PayPal’s internal analysis showed that it paid at or above market value for each of its employees, the wages were not always sufficient for many families.”

Schulman’s team had focused on wellness as one of its values after PayPal was spun out of eBay as an independent company in 2015. And while other financial companies focused on financial inclusion—making sure that people had access to bank accounts, for example—PayPal’s leadership thought financial wellness was a better ambition for its customers and staff. They also wanted social responsibility to be part of the company’s core activities rather than parked out in a corporate foundation.

The results so far:

  • Fewer employees are running into financial emergencies.
  • More employees are buying into expanded health-care insurance options that go beyond the basic plans.
  • More employees are putting money into their 401k retirement accounts and participating in employee stock-purchase programs.
  • PayPal internal surveys show greater employee intention to stay at the company since the initiatives were put in place. Employee retention rates increased.

Looking ahead, PayPal is focused on hitting its 20% NDI target. It plans to keep improving its financial wellness program as it better understands what makes a difference, and has been adjusting some of the way it’s been supporting employee wellness amid the strains of the pandemic.

What about the cost of the initiatives? And could companies who aren’t super-profitable Silicon Valley titans afford similar programs? 

“We made a significant investment in these programs,” says Paasche. “But we feel strongly as a leadership team that investing in our employees is the smartest thing that we can do to build value for all of our stakeholders. Employees who feel financially secure, who feel connected to the company and its mission are going to invest in the future of the company, feel a stake in the company. They’re now all shareholders. And that is going to have benefits for our customers. That’s going to have benefits for our investors.”

For more information, you can download a worker financial wellness assessment guide from Just Capital and PayPal. There’s a TED conversation with Schulman from last year, and an August 2020 Harvard Business School case study on PayPal, with Michael E. Porter as the lead author.

I’m interested in hearing about other pioneering specific ways for resetting business practices. Please reply to this email and pass them along. I wrote about the related question of what people are paid last week—if you missed that, you can read it here.

Content from our partner McKinsey & Company

On trend. 2021 will be a year of transition. Equip yourself for what’s ahead in the global economy, business, and society with a look at 13 crucial themes emerging as the next normal arrives.

What Else You Need to Know

The “Faustian bargain” with Trump was always clear. And now with the violent attack on the Capitol incited by the president, business leaders are publicly acknowledging it went too far. 

  • Many corporate leaders stood by Trump during much of his presidency, or at least kept quiet about his rampant lies, self-dealing, and mismanagement—and they were rewarded in turn with massive tax breaks for corporations and the wealthy. Trump’s 2020 campaign raised five times as much money from top CEOs as Biden’s did, according to MarketWatch calculations. 
  • But that changed with Trump’s latest efforts to overturn the election, culminating in Wednesday’s riot. “There’s not a major chief executive who’s a Trump supporter now,” Yale School of Management professor Jeffrey Sonnenfeld told the Financial Times. Sonnenfeld said that 33 top CEOs he surveyed this week unanimously supported the idea of warning their lobbyists not to fund “election result deniers.”
  • Political contributions by corporations and executives are likely to get even more scrutiny by employees and shareholders. And the Capitol attack will certainly increase pressure for businesses to cut ties with extremists. 
  • One example: an Amazon employee group publicly called for the company to stop hosting the social network Parler on its servers because of Parler’s lax approach to extremism and inciting of violence, including in connection with the attack on the Capitol. Amazon later confirmed it was among the companies cutting off Parler.

Faustian bargains aren’t good bargains—Faust was carried off to hell in the original German legend—and companies need to be held accountable for acting in sync with their stated values and societal interests. “Character really counts,” is the takeaway of former Goldman Sachs CEO Lloyd Blankfein, a Trump critic. 

  • Beyond that, business leaders can speak out in support of democracy, support institutions that strengthen democracy in areas such as voter rights, and treat workers with dignity while addressing societal inequality that feeds unrest, proposes Harvard’s Rebecca Henderson. I’d add speaking out and acting against white supremacy to that list.

Employers would have to let job candidates know when they’re being screened by software, under legislation being considered by the New York City Council. Companies increasingly use services to help automate parts of the hiring process by filtering resumes and analyzing video interviews. 

  • The New York measure would also require those hiring-technology services to conduct annual audits to demonstrate that they’re not discriminating. 
  • Amazon reportedly abandoned an experimental tool to analyze resumes it was developing a few years ago because it discriminated against women. 

The Consumer Electronics Show kicks off tomorrow with an entirely virtual program. Usually around 170,000 attendees descend on Las Vegas for the annual tech industry blowout, with its expensive keynote productions and endless convention floors full of tech wares. Home-office and health-related technology are among the gadgets expected to get virtual spotlights this year, but some big tech players are skipping CES and others say it’s not worth it without in-person networking.

Here are some of the best tips and insights from the past week for managing yourself and your team:

  • Skip the stand-up meetings. Harvard researchers found that the regular stand-up check ins that are a hallmark of “agile” product development get in the way of creativity. “Stand-up meetings encourage team members to coordinate their work at the cost of independently pursuing new ideas,” the researchers concluded. Their recommendation is to have fewer meetings.
  • Have a “hunch hour.” This is a meeting where everyone shares a prediction about something, work-related or not. And Fred Dust, author of Making Conversation, suggests setting a rule that the hunch can’t be about the pandemic. Thinking about predictions outside of the constraining frame of Covid could help stimulate creativity, Dust argues.
  • Play a videogame with your colleagues. Online games provide structure for the sorts of valuable social interactions that you might otherwise be having over drinks or lunch. The game should have broad appeal and be easy to pick up—and the truth is the ideal game for coworkers might not be invented yet.


If you’re going to commit a federal crime, you might want to take off your employee name badge first. That’s apparently not obvious to everyone: a Maryland direct marketing company fired an employee identified in photos of rioting inside the Capitol building by the employee badge clearly visible around his neck.

The peak of Silicon Valley cafeterias is behind us. Lavish free meals for masses of tech workers won’t exist on the same scale after the pandemic, as companies close offices, decentralize their operations, and embrace hybrid and remote work. Dropbox, Airbnb, and Twitter are among the tech players that have already let food workers go.

Never mind the vaccines, Queen Elizabeth has cancelled all of her garden parties for 2021. The Queen usually invites over 30,000 people to the four annual events held beginning in May. The invitations are extended as a thank you for public service. This will be the second year in a row that the garden parties are a Covid casualty.  

The TGI Fridays restaurant chain thrives on stimulus checks. Daily sales have been up about 20% since the latest $600 government aid checks started going out. Just imagine if the checks were $2,000.

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email. Have a great week!