From WBUR Cognoscenti
With retailers opening ever earlier on Thanksgiving Day and being rewarded with ever longer lines out their doors, it’s no wonder they see the holiday as a bottom-line bonanza that may benefit everyone — except employees who have to spend long hours at work and miss out on time with their families. Opening on Thanksgiving Day is yet another demonstration of how little retailers value their employees. That disregard is a natural result of the way most retailers view their labor force — a large cost that needs to be minimized. The result is millions of bad jobs with poverty-level wages, minimal benefits, very little training, and unpredictable work schedules.
Conventional corporate wisdom is that bad jobs are the only way to keep costs down and prices low. Otherwise, customers would have to pay more or companies would have to make less. But I have been studying retail operations for over a decade and have found that the assumed trade-off between good jobs and low prices is false.
Companies that go cheap on labor lose more sales and profits than they realize and can find themselves in a vicious cycle. In retail, overworked, unmotivated, or under-trained employees often cause problems, for example by shelving products where customers cannot find them or by leaving expired products on the shelves. Such problems frustrate customers and mean lower sales and profits. Lower sales mean tighter labor budgets, which lead to even worse jobs — and the cycle continues.
Read the full post at WBUR Cognoscenti.
Zeynep Ton is an Adjunct Associate Professor of Operations Management at the MIT Sloan School of Management.