Why Do So Many Workers Have Bad Jobs?
About one in five American workers today have jobs that offer low wages, poor benefits and few opportunities for advancement. But what can you do, right? After all, don’t we know that what’s good for business is often not good for people?
Not really, argues Zeynep Ton, an adjunct associate professor at the MIT Sloan School of Management, in this recent article. Although the conventional wisdom is that companies have no choice but to pay their employees poorly to remain competitive, Ton’s research suggests the opposite is true: When companies invest in their workforce, everybody wins.
Ton studied the practices of four highly regarded retailers – Mercadona*, QuikTrip, Trader Joe’s, and Costco – and found that “highly successful retail chains not only invest heavily in store employees but also have the lowest prices in their industries, solid financial performance, and better customer service than their competitors.” Indeed, low wages are “not a cost-driven necessity but a choice.” Her analysis suggest that one key to breaking the perceived trade-off is “a combination of investment in the workforce and operational practices that benefit employees, customers, and the company.”
What practices? Two examples from Ton’s paper:
- Reduce your offer and, by that, the complexity of your operation. Data suggest customers do not mind and sales do not have to suffer;
- Achieve flexibility and efficiency by cross-training employees. Instead of compartmentalizing tasks,
