This recent New Yorker financial column made me feel a little better about our economy.
According to a recent Wharton School study, retailers that invest in hiring and training more employees make back between $4 and $28 for every dollar spent. While Surowiecki says that “the reasons for this aren’t hard to divine,” he omits what I believe is a really powerful reason: employee satisfaction. While there is a clear bottom-line benefit to lower turnover (addressed in the article), there is a more powerful benefit to keeping one’s employees satisfied–whether by paying them well, refraining from overworking them, or training them well.
One of the reasons I liked shopping at Trader Joe’s (when I lived near one) was not simply the quantity of Hawaiian party shirts available to direct me to the capers. It was that they seemed to feel pretty good about their jobs. It was just nicer to be around them. Contrast this to, say, a Macy’s. Staffers are hard to find, sure. But they also tend to have so little energy. They are helpful enough, and they even smile. But there’s a big difference between that and the genuine enthusiasm I felt in a TJs. Or even a Starbucks (where even part-time workers famously get full benefits).
Is it really so revolutionary to say that happier customer service employees will provide better customer service?
Surowiecki writes that “there’s a strong case to be made that corporate America’s fetish for cost-cutting has gone too far.” While his article focuses on the retail space, citing Best Buy and Home Depot as examples, I would love this statement to be true across sectors. I have experienced first-hand the limits of overzealous cost-cutting, whether in universities or in private industry. I would be curious to see this research applied in other sectors. My hunch is that it will hold up.