Zeynep TonHarvard Business Review
Originally posted 22 May 20
One thing we can predict: Customers who are struggling economically will be looking more than ever for good value. This will give the companies that start building a good jobs system a competitive advantage over those that don’t. After the financial crisis of 2008, Mercadona — Spain’s largest grocery chain and a model good jobs company — reduced prices for its hard-pressed customers by 10% while remaining profitable and gaining significant market share. Hard work and input from empowered front lines had a lot to do with it.
The pandemic is likely to accelerate the ongoing shakeup of U.S. retailing. The United States has 24.5 square feet of retail space per person versus 16.4 square feet in Canada and 4.5 square feet in Europe. This is almost certainly too much and the mediocre — the ones that don’t make their customers want to keep coming back — will not survive.
The pandemic is likely to speed up the adoption of new technologies. Although typically seen as a way to reduce headcount, adopting, scaling, and leveraging new technologies require a capable and motivated (even if smaller) workforce.
There is an alternative: A good jobs system that has already proven successful. Long before the pandemic, there were successful companies — including Costco and QuikTrip — that knew their frontline workers were essential personnel and treated and paid them as such. Even in very competitive, low-cost retail sectors, these companies adopted a good jobs system and used it to win.
There’s a strong financial case for good jobs. Offering good jobs lowers costs by reducing employee turnover, operational mistakes, and wasted time. It improves service, which increases sales both in the short term and — through customer loyalty — in the long term.
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