In a hyper competitive market, where customers look at the price tag before they look at the offering, it makes sense to keep your labour bill as low as possible. And so where you cannot ‘automate out’ the labour you simply minimise the investment in those workers that take up the so called ’bad jobs’.
Well according to the Harvard Business Review this approach to worker investment is flawed.
Zeynep Ton, visiting assistant professor in operations management at the MIT Sloan School of Management suggests that retailers can break the low-price low worker investment link by adopting the following practices:
- Reduce the catalogue of items sold. This reduces complexity both operationally and in what workers need to get to grips with.
- Rather than flexing the workforce in line with demand, cross train workers so that they can be reposted as required. Thus there are less clueless temp workers damaging the brand.
- Apply lean principles to eliminating waste so that worker productivity is maximised.
- Empower employees to make real-time decisions, which translates into better customer service.
As mentioned in previous posts, most organisations are in a ‘race to the bottom’. The winners will be those that can flourish when they get there. And they will be unlikely to achieve this unless they place great emphasis on their staff, new technologies and information management.