Hiring is the new Firing!
Today the New York Times (among others) is reporting Big Companies Join Obama in Initiative to Help Long-Term Unemployed. Essentially the President is asking companies to revamp the recruitment process by not eliminating candidates with long stretches of unemployment. Maybe some of these companies will discover that adding labor can actually enhance profitability by improving the experience they provide their customers. Our own Gregg Gordon is certain that’s possible, and he’s now leading a Kronos team to “demonstrate that labor is not just a cost and compliance burden, but rather a strategic resource that is responsible for differentiating a company.” Gregg cites a recent Times article on how retailers like Ikea and Trader Joe’s are using the strategy for growth and profit.
It’s an interesting time in our history. Corporate profits are at all-time highs, yet wages have been stagnant for years, and the middle-class seems to be losing the buying power that has stoked the fire of our economy since WWII. The solutions are evasive, and they’re not as black and white as screaming pundits present them. For example, in the Ikea article, the author writes, “Costco pays its workers about $21 an hour; Walmart is just about $13. Yet Costco’s stock performance has thoroughly walloped Walmart’s for a decade.” Wal-Mart is often a corporate piñata, but while researching for this post, I found Why Wal-Mart Will Never Pay Like Costco. It compares the two retailers, and presents the case that Costco and Wal-Mart have very different business models and customer demographics that drive their compensation models. Now, could Wal-Mart pay a little more and shareholders accept a little less? Well, that’s a discussion for another blog…
Just one more thing for a Friday… Don’t forget that keeping your employees happy and engaged can also grow your profits!