What was your last shopping experience like when you ventured into a discount retailer (and, yes you have been in one admit it)? If your experience was like many other individuals' you were greeted by a retail store with merchandise strewn about, items in the wrong locations, advertised items missing from store shelves, not many employees around to ask questions of, and (if you found an employee) were met with a gaze from a tired, distracted, and overextended (or worse - a disinterested) employee. Conversely, what was your last experience when shopping at a "full price" retailer? For the most part, polls have shown that shoppers are willing to pay a small premium for better service and a better selection. People like to feel their shopping list is as important to the retailer as it is to them (after all, you earned your money, they should earn the right to take it as well). Don't worry there is a human resource connection coming.....
Let's go back to the discount store with the unhappy employees. What we know, as human resource professionals, is that unhappy employees = lower productivity, increased use of sick time, and lower ratings on customer service. So why are discount retailers (and many other areas of industry) lowering wages and shedding experienced employees? Yeah, yeah - we know - it's to be able to make those shrinking budgets. What if, though, we were actually accomplishing the reverse with our actions? Instead of steering our organization through an economic downturn we were further jeopardizing its health by driving customers away?
Professor Zeynep Ton, of MIT's Sloan School of Management, has ten years of research to back up why it might not be such a good idea to put the squeeze on your employees. In the Future of Retail: Companies That Profit By Investing in Employees at Time.com, Ton's research finds "companies that buck the status quo and invest heavily in their workforce actually are able to not only compete with their competitors on service but on price too". This upends the notion that to compete in the market as a low-cost leader, a company must have a low-cost workforce. In fact, Ton states that retail chains that experience high levels of success "invest heavily in store employees, but also have the lowest prices in their industries, solid financial performance, and better customer service than their competitors".
What, exactly, makes successful companies successful anyway? It's in their "business card". Remember the old standby in business - it holds true today: your employees are the face, the "business card" of your company. The experience customers have with your company is heavily influenced by their interactions with your employees. Ton's research found "all sorts of efficiencies that become unlocked once you have a highly trained, highly motivated workforce".
So take a cue from those that are successful now, and are set to continue their success and growth once the economy turns in their favor: invest in your employees. Yes, pay them a decent wage, provide a content rich and inclusive training program, offer great benefits, and promote a culture of innovation - then, maintain as you enjoy success...
Agree for the most part, but we are now in a new economic reality, where a happy employee may just be an employee with a job. We have moved out of a phase where the job itself was a given, and the emphasis was on the motivated employee. But if employees know they are lucky to have that job, even if they don't like it or the pay, they may be still motivated, but by fear perhaps ?
ReplyDeleteWe are in a an economic pothole, if you will, on the road to recovery. We seem to be stuck here for awhile and many businesses are falling back on old, standard practices that tell them if they pay the employees less and reduce their budget on training then they can maintain or even increase their revenue and shareholder return. Unfortunately, they may be forgoing even better returns by relying on those old practices. It's similar to an equation where little effort in (by way of pay, training, and motivation) = little increase in returns and a miserable staff; greater effort in (better pay, well-developed training/guidance, support for autonomy) = greater returns for all.
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