Employment and Jobs

Shared Success: CDFIs Advancing Job Quality in Small Business

November 14, 2023  • Maureen Conway

Small businesses have long been recognized as the backbone of local economies. They’re credited with driving innovation, fostering local entrepreneurship, and creating jobs in their communities. But what kind of jobs are being created? Too often, this question receives little attention in discussions of promoting economic development, competitiveness, and prosperity.

And yet, good jobs are critical for a healthy economy, serving as the primary means to share the prosperity generated through the business success that economic development policies and practices aim to foster. Good jobs are not only a source of income; they also offer opportunities to learn new skills and build professional networks. Good jobs provide a means to save and build wealth, offer a sense of purpose and agency, and create an environment of equity and respect. And, as we think about small business development, good jobs can be the source of the skills, assets, and connections that people need to start a business.

Today, however, too many jobs are not good jobs. For example, Pew Research finds that approximately half of working people are satisfied with their job overall, and only about one-third of job holders are satisfied with their level of pay and with opportunities for advancement. Additionally , as in other research, they find the burdens of low-quality jobs fall more heavily on workers of color.

Advancing small business success and improving job quality are both critical goals to building an economy that supports human thriving. Building a practice that works toward both of these goals, while also advancing equity, is the purpose of the Aspen Institute Economic Opportunities Program’s “Shared Success: Scaling Financial Intermediary Strategies to Advance Job Quality, Equity, and Small Business Prosperity,” an initiative supported by a $15 million, four-year investment from the Bill & Melinda Gates Foundation, and in partnership with U.S. Bank. Last week, over the course of three days, my colleagues and I had the great pleasure of meeting with the 10 CDFI grantees participating in this demonstration.

Supporting small business success and ensuring equitable access to the capital and technical assistance entrepreneurs need to build their businesses has been foundational to the missions of the community development finance institutions (CDFIs) participating in the Shared Success demonstration. But in addition, these CDFIs are innovating to influence the quality of jobs their small business clients create, recognizing that advancing equity and resilient regional economies requires strategies that allow both entrepreneurs and their employees to thrive. Grantees came together to reflect on the past year of work, share tools and approaches, and refine strategies for advancing the work. Purpose, practice, and context are the key themes that continue to resonate from that discussion.

The group reflected on the larger purposes that drive the focus on job quality, drawing inspiration from research by A—B Partners on messages to engage small businesses. While job quality can contribute to improving the business bottom line, A—B found that messages that connect with more deeply held aspirations among small business owners, such as community leadership, independence, and the opportunity to focus on one’s passion, are far more effective in engaging entrepreneurs in the work of building quality jobs. Indeed, the role of job quality in supporting individual freedom and autonomy, both for the worker and the business owner, was a key part of the conversation, as was the critical role of job quality in building an economy that truly advances equity and economic mobility.

The group heard from colleagues at the Good Jobs Institute about business practices that can improve job quality and business performance at the same time, and CDFI leaders engaged in thoughtful discussions about how they could both encourage and monitor business practice changes that support job quality among their small business clients. 

The meeting provided the opportunity to dig into the range of practice innovations and ideas that the participating CDFIs had developed during their first year of work in the demonstration, and to witness the generosity with which they shared these ideas with their peers and worked to support the success of their colleagues. Indeed, the group demonstrated that they are not working just for the success of their own organizations, but for the shared success of the group as a whole and for the success of their industry to build the capacity needed to advance the demonstration’s goals.

Grantee innovations were grounded in the context of the communities they serve and the capacities of their institutions. Grantees shared a wide range of tools and strategies, from support for equitable hiring, to checklists to guide effective onboarding and training, to advising services related to employee benefits, to specific tools to track employer practice changes, and more. Innovations were shaped by the institutional capacities of the CDFIs, their geographic context, and the needs of their client base, but the CDFI leaders engaged in rich and substantive discussions about how their tools and strategies could be adapted to other contexts. These discussions reinforced the critical importance of practitioners’ rootedness in community and connection to their client base in effectively implementing a complex approach to expanding opportunity.

We need greater attention to job quality in our discussions of the health of the economy. We need new narratives that center good jobs as a fundamental goal for economic policy and for business practice. We need to ensure that we pay particular attention to the experience of workers of color and women in assessing whether we are making progress. And we need courageous leaders to build an intentional practice that deals with the difficult and complex challenges that arise as we try to move from how things are to how they could be. Last week’s discussions were a truly inspiring experience with courageous leaders who are making progress toward that goal.