Zeynep Ton, an adjunct associate professor at the M.I.T. Sloan School of Management, recently spoke at a TEDx event in Cambridge, Mass., and delivered a provocative analysis of the economic advantages retailers can achieve by investing in their workforce. Drawing on a decade of research, Ton maintains that retailers such as Costco that invest in their employees—including higher pay, better benefits and schedules, and more training—have seen positive results, including healthy sales and profit growth, higher labor productivity, lower turnover and higher customer satisfaction.
Unfortunately, many retail employers have followed Walmart’s lead by skimping on hours and preventing full-time schedules so they won’t have to provide benefits to their workers. This low-wage business strategy has, in turn, led to depressed earnings across the retail sector, as well as operational problems in stores, including out-of-stocks; a shortage of employees on the sales floor; and long checkout lines and wait times.
To view Ton’s lecture at the TEDx event, visit http://www.tedxcambridge.com/portfolio-item/zeynep-ton/. Ton’s research and articles can be viewed at http://www.zeynepton.com/.