Disgruntled Employees and Extended Black Friday Hours = Deflated Sales
If you are still exhausted even 10 days after Black Friday, chances are because you were one of those employees who had to bolt Thanksgiving dinner early to work at the earliest Black Friday opening ever. And if you rushed into a big box store on late Thanksgiving night or early Black Friday morning, but did not check off everything on your Christmas shopping list, it could have been because you could not find anyone to help you with that big screen TV or cashmere sweater newspaper inserts promised to those early risers. The chaotic holiday shopping season overlooks one important fact: that retail workers are now the face of poverty in the United States. The average full time salary for full-time retail employee is just over $21K a year, and they are the lucky ones. Many retailers, spooked by head count and chain-yanking from Wall Street, have cut workers’ hours to the point that many of them search for a second or third job--not an easy task as retail hours are often unpredictable week to week. Meanwhile retailers have often cut benefits such as health insurance; or, in the case of Walmart, they publish a directory of public assistance offices (pictured above left) so that their employees can sort out whether they can qualify for programs such as Medicaid or CHIP. Does it have to be this way? Is the push to stay open more hours on holidays--while overall cutting employee’s shifts and benefits--really smart business? In Inc., MIT’s Sloan School of Management Zeynep Ton argues that the ridiculous Black Friday openings do not necessarily translate into a healthier bottom line. Customers generally spend more on those days and less other days during the holidays; they are not automatically spending more overall. Then there are the quality of life issues, which result in long term problems: stores’ operations often suffer as exhausted and poorly-trained workers are not efficiently stocking the shelves and aisles. And of course, there is the human cost, as in stressed out employees not having enough time to spend with family. And marginal employee training, not to mention poor treatment of workers on the shop floor, cannot make up for a temporary boost from a successful Black Friday: just ask Circuit City, the management of which cut loose experienced sales professionals, replaced them with lower-wage workers and has since disappeared. Short term financial goals, however, often trump long term performance metrics in the retail sector. But Prof. Ton points out that some low-cost retailers turn the idea of modern day staffing on its head with a generous head count, extensive training, excellent benefits and better customers service--and in the end reap more revenues and actually have better sales per square foot and per employee. Costco, Trader Joe’s, Spain’s Mercadona and QuikTrip are among the outliers in the retail sector that boast more motivated employees, happier customers and higher profits. Uniqlo, a Japanese clothing company (pictured right), recently brought the Japanese and Korean department store model to New York and San Francisco--with generous staffing, exquisite customer service and the added twist of competitively priced clothing of which shoppers cannot get enough. It will take a while for consumers to figure out that when you shop for items on the cheap, the stubborn fact persists that they continue to pay a lot more in other ways: taxes going towards public assistance programs, time wasted in long checkout lines and in the long run, even higher prices because of inefficiencies. We hear a lot of retailers and their public relations mouthpieces of how stores are doing great things with solar, sustainable fish and organic products. It is now time to hear about what stores are doing for their employees’ welfare so they can live sustainably--as in having a decent life. Published earlier this morning on Triple Pundit. You can follow Leon and ask him questions on Twitter or Instagram (greengopost). Images credit: MakingChangeAtWalmart.org, Leon Kaye.