When it comes to jobs, it’s hard to find an industry with a heavier employment footprint than retail’s 60 million jobs. But, as technology begins to change consumer behavior, many of those jobs are either changing or disappearing altogether.
Of those that remain, many are just plain lousy gigs, according to MIT Sloan associate adjunct professor of operations management Zeynep Ton. She’s been studying the retail industry for the better part of two decades, and in recent years founded the Good Jobs Institute, a nonprofit that works to help companies thrive by creating better jobs.
Ton recently joined Retail Dive’s Conversational Commerce podcast to discuss how the retail industry got that way and what can be done to fix it.
In studying retail supply chains, Ton and her colleagues discovered that most of the problems in the industry were happening on the sales floor. “Once they got the right product in the right store, at the right time, there were all sorts of problems that were leading to lost sales, lost productivity, lost processes. That was really hurting retail supply chain performance,” she said.
The major cause of the issue? A lack of investment in people — in the employees responsible for keeping each individual store humming. Low pay, unpredictable hours, and a lack of support led to a demoralized workforce more prone to making mistakes.
“Stores that had higher employee turnover, that had less training, or stores that were understaffed and just did not have enough people to get all the work done had more problems,” Ton said.
Those retailers were operating in what she calls a “vicious cycle.” That starts with the mentality that people are a cost to be minimized, which leads to the lack of investment. Eventually, that all compounds into operation problems, which result in lower sales and profits. Labor budgets shrink, staff is cut, and the cycle begins anew. The cycle is bad for all of the stakeholders in a company — the customers, the investors, and the employees, Ton said.
Now, more than ever, she argues, is the time for employers to find ways to turn the vicious cycle into a virtuous one. In her 2014 book “The Good Jobs Strategy,” Ton offered a framework to achieve that, emphasizing putting the customer first and adopting for operational changes: operating with slack, offering less, standardizing and empowering, and cross-training employees.
Those four choices, taken together, increase the productivity of employees, motivates them, enable them to be experts in what they’re doing, and allow them to continuously improve. They increase the opportunities to raise employee pay, provide better benefits, and offer more predictable schedules.
“Thinking about customers first, and that the employee is the most important resource, and that that approach is a way to win, that it’s not just nice to have, is a different mindset, because most retailers are not customer first,” Ton said. “I think what it takes is conviction, being customer first and having a motivated, productive workforce — those are essential ingredients of winning.”
But to make it all work, the employer needs to commit to it for the long term, Ton said. “Implementing the Good Jobs Strategy is not something that will happen in a few months — it will happen in a few years,” she said.
Companies that fail to adopt a Good Jobs mindset and keep the customer at the forefront of their efforts will likely evaporate, Ton said.