The real cost of raising the wages of retail workers
The New York Times Sunday Magazine of January 5th had an interesting article raging the real cost of raising the wages of retail workers. The premise of the article was based on the following:
- Big Retailers classify workers as a “cost”
- But they can be a major source of profit
- The quicker retailers understand this the more profitable they will become.
Treating workers as an asset rather than a cost will usually result in happier customers. Happier customers spend more and remain more loyal to a store. This is not a new concept, Fred Reichheld the author of “The Loyalty Effect” and “The Ultimate Question” has made this point in both books. According to him there is a direct correlation between a stable, happy workforce and customer loyalty. The more customers become familiar and comfortable with store personnel the more they develop a relationship with that store. The beginning of a new year is a perfect time to reflect on the concept of treating your retail workers as an asset rather than a cost. Loyal customers and happy employees increase profits, what a concept.