Why Improving Frontline Jobs May Be Your Company’s Ticket to Success–or Survival

BY Matthew Koehler | October 04, 2023

In the midst of several years of environmental, social, and economic upheavals, including the lasting effects of Covid on the workforce, consumers and workers have been pulling companies toward conscious capitalism. And while companies have been pulled, that isn’t the denouement of this story. 

Recently at a property summit in Australia, Tim Gurner expounded upon the need for there to be pain in the economy and for companies to flip the script on workers. Namely, workers should be afraid and feel lucky for their jobs, not the other way around. 

This seems to be the opposite direction of where companies should be going according to Zeynep Ton, a professor at MIT’s Sloan School of Management and author of The Case for Good Jobs: How Great Companies Bring Dignity, Pay, and Meaning to Everyone’s Work. 

“A good job could mean different things to different people. Right sense of belonging, achievements, purpose, recognition are all the ingredients,” Ton said, but there are “minimum conditions that all companies should have.” 

“Those minimum conditions are first, very obviously, being treated like a human with brains with a heart, not just a pair of hands. And then the second one is for pay to be high enough so that people can take control over their lives.” 

Ton was interviewed by Editor in Chief of the Harvard Business Review, Adi Ignatius. They spoke at a recent From Day One fireside chat in Boston

Market Rate Pay vs. the Good Jobs Strategy 

Taking a step back, Ignatius pointed out that Ton actually wrote two books about jobs, her current one The Case for Good Jobs and her previous The Good Jobs Strategy. In The Good Jobs Strategy, Ton used the low cost retail market as an example of how companies make a choice on two different ways to operate. Companies can choose to offer low wages, have low productivity, and high turnover rates. This is a “bad job strategy” according to Ton.

“The other world is to pay employees a lot more than competitors do, offer them better benefits, and design the job for high productivity, high contribution, and operate with low employee turnover, great customer service, and more,” Ton said. 

Ignatius brought up the fact that a lot of CEOs “care about the planet” per se, but don’t pay mind to labor issues. 

“It’s always amazing to me that some leaders talk about conscious capitalism, but when it comes to their frontline workers,” Ton said, are “completely fine with below subsistence wages” and all the problems that arise from it. She points to generations of business leaders being taught that “market pay is the right pay” and says the market pay mentality is driven by the idea that “labor is just another cost of production that is just like any other input.”  

“And when we think about inputs to production, the right pay is the market pay. So because people are just another cost, we should pay market wages. And paying market wages is so dominant, that people can’t even imagine operating any differently.”

Zeynep Ton, author of The Case for Good Jobs was interviewed in the grand finale session in Boston (company photo)

Using Costco as an example, Ton says co-founder Jim Sinegal comes to her classes every year to address students and his message is: Of course, you pay people more. “Because you understand that when people can’t focus on the job, turnover is going to be high. And now there’s so much research that shows that low pay is associated with all sorts of health costs. It even lowers cognitive functioning, low pay is equivalent to a 13 point reduction in IQ.”

Ton says the resistance to higher pay is short-sighted. Low pay and high turnover leads directly to high turnover costs. 

“We have worked with organizations, frontline organizations, and we’ve seen turnover levels, anywhere from 40% to 400%. So the direct costs are recruiting, hiring, onboarding, time to productivity training. Those costs can be 10 to 25% of the total labor payroll spent annually.” Turnover costs pale in comparison to other financial costs, like lost sales, mistakes, lower productivity, lower quality. 

Why isn’t higher pay being adopted?

Ton gave three reasons why she believes leadership is resistant to making the better pay change.

“There’s a lack of imagination that there could be another world. And one of the things that makes imagination very difficult is a lot of organizations make their decisions, looking at just numbers. And oftentimes, they work in silos, and they look at the history and what happened in the past. And that prevents them from imagining any other possibility going forward,” Ton said.

Secondly, leadership has a long laundry list of priorities, with board members and stakeholders being top priority and high turnover and the cost of high turnover being much lower. “The investors and board [are] not asking you about what’s your turnover? What’s your cost of turnover? How good is your customer satisfaction?” Given all that leadership has to deal with, accepting high turnover, and its costs, are simply easier.

“The playbook for a good job strategy is harder than the playbook of pay as low as possible. In the good job system, you pay high. You design the work, which means you cross train your employees. You empower them to make decisions. You make their work better. You pay attention to staffing levels, so they can come up with improvement ideas.”

The third reason these changes aren’t more commonplace is both a lack of conversation on the topic and a misplaced lack of trust between management and staff. 

“When they are stuck in their own vicious cycle of poverty, because pay is so low, they have all sorts of problems, cognitive problems, health problems. They’re not performing well on the job.” Ton says management incorrectly equates this to a lack of capability on the part of the worker. 
“Well, I can’t trust you, because you show up late. I can’t trust you, because you just yelled at the customer. So how am I going to empower you to make decisions? How am I going to invest in you?” Ton said.

AI as an Answer

Before stepping off the stage, Ignatius asked Ton what she thought about AI’s impact on labor. 

“I think it really depends on how we use technology, right? Technology doesn’t have an effect. Technology’s effect on work and workers will depend on how we use our imagination to deploy technology,” Ton said. 

Turning to the example of Sam’s Club, Ton described how they were able to use technology to better utilize staff, raise salaries, and improve the customer experience. She gives the example of purchasing a tire for your car several years ago versus now, a process that used to take 20 minutes or more. “Now with technology that processes just a few minutes. That means that the associate, instead of wasting their time looking through different manuals, can focus on the customer. They can ask you for ID. What are you using your car for? What performance are you most interested in? Do you want a low cost?” They are now better advocates for their customers. “And because their job is a lot more productive. Sam’s Club can pay them more.”

So what should business leaders talk about the next time they find themselves at Davos, for example?

“Instead of talking about other things, people at Davos should be talking about pay. And make sure that everybody makes a living wage,” Ton said.

Matthew Koheler is a freelance journalist and licensed real estate agent based in Washington, DC. His work has appeared in Greater Greater Washington, The Washington Post, The Southwester, and Walking Cinema, among others.


Improving Employee Mental Health and Wellness Benefits

There’s no one-size-fits-all approach when it comes to improving mental health. At From Day One’s Boston benefits conference, a panel of industry leaders shared how they promote mental well-being in their own lives.Jodi LaMae, benefits principal, global total rewards at biotech company Boston Scientific, enjoys hot yoga and walking her dogs. Navin Vettamvelil, senior director of total rewards at software company SoftServe, tries to swim four times a week, which he considers underwater meditation. Other responses included boxing, daily meditation, Muay Thai, and cooking.Mental health benefits are no longer a nice-to-have. Recent research shows that 77% of workers are very (36%) or somewhat (41%) satisfied with the support for mental health and well-being they receive from their employers. In a 2024 survey of 50 benefits leaders across the U.S., 94% of respondents say offering mental health benefits is “very important” to prospective employees—nearly triple the rate of benefits leaders who said this a year earlier.“It’s imperative that we let employees know that mental health is just as important as physical health. A lot of preventive medicine is covered, but many charge for therapists,” said Shawna Oliver, the AVP and head of global benefits and wellness at Manulife. “It’s important to signal to your employees ‘we want you to do this.’ The minute everyone starts talking about it, that’s when barriers start coming down.”Despite the strides made in the workplace, misconceptions and stigmas remain. “As a vendor who works for hundreds of employers, I found that there’s a recognition that mental health and substance abuse are highly stigmatized,” said Yusuf Sherwani, CEO and co-founder of substance abuse management clinic Pelago. “These are not things that people choose. Specialized solutions can be very effective. The final piece is about promoting utilization—by [letting people know] it’s safe, and it’s confidential,” he said.The panel of speakers from left to right included moderator Katie Johnston, reporter at the Boston Globe, Jodi LaMae of Boston Scientific, Robin Berzin of Parsley Health, Yusuf Sherwani of Pelago, Navin Vettamvelil of SoftServe, and Shawna Oliver of ManulifeAnother strategy to support employee well-being is focusing on preventative care. “When it comes to life therapy sessions with a counselor, we put limits” offering three sessions a month or ten a quarter, says Vettamvelil. “Our real focus is about the prevention rather than the cure. If you can nip it in the bud, you can control things down the line.”Robin Berzin, MD, founder and CEO of holistic health company Parsley Health, agrees. A lot of people aren’t getting the right care, she says. “When I was in training, we created a revolving door between primary and specialized care,” she said. “When 60% of adults have a chronic condition, that does not work. At Parsley, we treat the root cause to see if we can slow down the revolving door.”She reports that 25% of their users have two or more conditions. “When we look at the mental health component, I want to ask why everyone is so anxious. It’s not all in our heads. We sit 11 hours a day. A sedentary lifestyle will cause anxiety, insomnia. We’re not a set of organs in jars.” Investing in mental health benefits has a significant impact on ROI.“A lot of times when we say we cover mental health care people look at me like it’s a money pit,” said Oliver. The reality is that it’s less than 1% of the budget, and on top of utilization going up, she reports that short-term disability dropped. “Benefits are not a silo. It’s our job as leaders to say it’s the entire package.”The panelists agreed that communicating benefits is equally important to the offerings themselves. “We have a team that ensures there’s info on mental health benefits in the rec room,” said LaMae. Manulife is now actively planning out mental health month initiatives, offering activities nearly daily, says Oliver. It’s also important to raise these discussions and prioritize well-being as leaders. “We have to talk about it, and say ‘Hey, I’m going for a walk to clear my head,’” said Oliver. “If it doesn’t start with you, it’s never gonna happen.”Holistic care should also be family-inclusive. Sherwani urges people to see mental health and substance abuse not just as an employee challenge, but as a family challenge. “18 months ago we expanded to adolescence, previously an underserved demographic,” he said. “In terms of promoting these programs, people can just put up their hands and know when to reach out.”Not all cultures have the same openness toward mental health as America. Americans abroad might need services that are not as widely offered in their current countries, like telehealth, says LaMae. “Promoting wellbeing is important: make sure employees know about their benefits and they know how and where to get care,” said LaMae. “Work with ERGs,” she advises, “sometimes people aren’t comfortable going to HR, but having employees that double as well-being champions [really helps].”Angelica Frey is a writer and a translator based in Boston and Milan.

Angelica Frey | April 09, 2024

How to Make Reskilling Part of a Corporate Culture of Learning

“You will never hire your way out of your skills deficit,” said Marcus Cazier, head of learning and development for the Americas at bioMérieux.In the next two years, researchers posit that half of your skills will be irrelevant – a pattern that’s expected to continue. So how can employers get ahead of this skilling cycle? Offering insight and advice for other people leaders, Cazier spoke in a panel discussion titled, “How to Make Reskilling Part of a Corporate Culture of Learning” panel at From Day One’s conference in Salt Lake City.The other panelists agreed with Cazier: some sort of training will always be required. “If you hire for specific [technical] skills, you ignore the connection points existing employees inside your organization have. Those skills you can’t hire for, they’ll have to be developed,” said panelist Trent Savage, chief human resources officer at Mountain America Credit Union. “The question is: which type of skill do you want to spend time developing?”Additionally, establishing that your company values challenges and growth will make your best team members want to stick around, boosting your bottom line in the long run.“Promoting a culture that looks internally to find people that want different opportunities, that will help with retention,” said Donald Erb, HR channel czar at CollegeNET.How Do I Start Developing a Culture of Learning?Once you’re firm on the 'why' of reskilling, the real work begins.“At Campfire, the culture of learning really starts with our leaders,” said Steve Arntz, CEO of Campfire. But instead of letting inspiration spikes die off with executives, Arntz says they train down: each leader trains another, going into perpetuity.“This starts with getting my leaders to instill their teams with the idea that we need to learn, develop, and grow together. We need to find solutions together. And guess what? As a leader, I'm here to connect you to the resources that you need.”Leaning on those employees that are already seeking out those challenges is the first step, Erb says.“You’ll draw more people in because [your] reputation is investing in growth,” he said. “People get frustrated when they’re not even asked if they’re interested in learning new skills – I think it diminishes motivation.”Ciara Hulet, Morning Edition Host, KUER News, NPR Utah moderated the panel on the topic of skill-building Career ladders should look more like climbing walls, Cazier says.“The agility and the willingness to be flexible to do what the business asks you to do, that goes a long way,” he said. “Going up might not always be the right move, you may need to go sideways first.”What if My Employees Don’t Want to?If you’re in the process of establishing a culture of learning, you may receive some pushback.Nate Miller, VP of learning and organizational development at Vivint, had first-hand experience when, as part of Vivint’s acquisition, installation and service technicians were asked to begin participating in revenue generation.“There was reluctance to add this selling skillset,” he said. “It drove attrition. These folks chose their paths because they didn’t want to sell.”Miller followed Erb’s earlier advice and found leaders who are naturally high learners and helped them frame experiences as growth opportunities rather than job requirements. Then, those who took the growth opportunities were rewarded.“We integrated selling and technical skills into our scheduling software, so when we assign jobs, the most lucrative installation opportunities align with the most skilled revenue generators,” Miller said.Vivint also cut out their performance improvement plans. “They were working from a place of fear,” he said. “We had to shift it from a place of fear to a place of opportunity and growth by reducing the amount of threat in the environment.”What Skills Do We Need?It’s simple: ask your people.“You’ve got a traditionally top-down focus when it comes to budgets and implementation,” Arntz said. “But the frontline workers and managers, they know which skills they’ll need to adapt. [It may be beneficial] to allow people to choose their opportunities, which [are then pushed through] programs and initiatives at the higher levels.”“Years ago, to develop someone meant to send them to a training,” Savage said. “Now it needs to be on-the-job and it needs to be connected to the needs of the business.”CollegeNET uses “Focus Ring,” a peer-assessment tool that asks employees to respond to prompts and then evaluate their peer’s responses. “These are folks playing the same role as you in the organization, and you see how they address particular product knowledge questions,” Erb said. “That’s learning an immediate skill.”Focus Ring goes further by grouping answers by how highly they were rated. “If we have groups that have eights and nines, they’re good candidates to become mentors,” he said. “They’ve demonstrated they have that particular skill.”The Future of Skill DevelopmentIf you’re interested in technology development, Savage says HR needs your help.“We’re close, but we’re not there yet,” he said. “Skills-based platforms don’t necessarily connect to development or to performance, so you must use multiple mediums [to tie your data] together. My hope is one day we get a more holistic look, because today we’re using Frankenstein technology.”In the meantime, Arntz predicts AI will be pivotal.“Engineers are using Copilot to write better and faster code,” he said. “Someone will build a Copilot for conversations, an AI assistant next to them during performance, expectations, and hiring. [When this is developed] it will enable our leaders to be more effective than they’ve ever been.”Jacqueline is a writer and Master of Accounting graduate from the University of Utah. When she’s not in Excel or writing an article, she loves to run, play Candy Crush, and read novels.

Jacqueline Mumford | April 08, 2024

Cultural Transformation and Meaningful Work: Crafting a Fulfilling Workplace Experience

Crumbl’s mission is to bring people together by sharing their cookies. But how could they make that idea real to their employees? The opportunity came when a snowstorm shut down most of Utah and leadership asked employees to work from home. But this wasn’t a normal work day. Instead, on top of the workers' to-do list was to build a snowman. The contest was a catalyst for employees to create a memorable moment, says Josh Olofson, VP of talent and culture at Crumbl, who was one of five panelists discussing the topic of meaningful work at From Day One’s Salt Lake City event. “We really went for it,” Olofson told session moderator Mekenna Malan, editor of Utah Business. Crumbl asked employees to share photos on Slack, and the prize for best snowman was $1,000. Memory-building was the goal, not just for the employee snow day, but to bring that concept to better drive their work. “We wanted our employees to really feel how powerful that moment is.”It’s that act of integrating company values that helps nurture a purpose-driven workplace. How to keep that momentum going all year long? It’s probably something most companies are already doing—the key is to use them wisely.“One of the tools I think that is most often overlooked in our space is effective one-on-ones,” Olofson said. Leaders need to make sure they’re not being reactive during these meetings, but rather proactive. One-on-ones are an opportunity to be open and connect and plant the seeds for change. Of course, companies should share successes with each other, but as Olofson says, sharing failures is just as vital. Those one-on-ones are a great place to share those.The panelists spoke about nurturing a purpose-driven workplace at From Day One's conference in Salt Lake City“When you open yourself up as a leader and you’re willing to share your failures, then your employees are going to be less against change, because they’re not going to be as afraid to fail themselves,” he said.Where to Start? Start-ups have the unique challenge but also opportunity to create meaning and purpose in their company culture from scratch. Panelist Brooke Shreeve, chief people officer at Weave, said the trick was to go back to basics. “We did our first engagement survey, and we realized we had an identity crisis,” she said. What was Weave? They sat down and hashed it out and the result was Strategy on a Page: all the company’s vision and purpose at a glance. They rolled it out at a company meeting, and copies remain available at all times to every employee. “It’s on every desk, so it’s a reminder every single day on what we’re doing, why we’re here and what we’re trying to accomplish.”After the rollout, leadership offered continual updates of what they were accomplishing with those values in mind. The result? Focus. “It put everybody on the ship rowing in the same direction. And that is huge.”That’s the power of engagement surveys, and why leadership should not only read them but take action. While companies can’t do everything employees want, Shreeve says they choose specific items to address, and they share that with everyone. “That really has helped make a huge impact on our company.”Personalizing the Worker ExperienceIt’s astonishing to think that five generations of people are in the workforce, says panelist Dan Kwong, vice president of talent and Culture for Woodward. The wants and needs of each generation and each person is different. “The opportunity is knowing your people,” he said. “Who are your people? What do they care about? What are their needs? What are their values? How do they like to work?”Generally speaking, most people want flexibility and autonomy. But those things can look different depending on the employee. “There’s some give there. It does not have to be nine to five behind a desk.” And it’s especially important for HR to have space to really engage in and relate with folks, he says.Recruiting must also be more personalized, Kwong says. The key is looking beyond the resume, removing barriers, and setting employees up for success. Integrate company values in the recruiting process and continue it during onboarding, he says. “Even without telling that individual what the mission is or what the values are, they should be able to feel it. They may not have the words for it. But once they’re hired after a robust process, then you can share those words. It’s about connecting the dots.”After that, keeping lines of communication open is key, it’s important to discuss employees’ aspirations. What do they really want out of work and life? Especially since upward movement isn’t always available. “Growth does not always mean a promotion,” Kwong said. “There is growth. But it starts with that one-on-one conversation that starts with leaders role-modeling those behaviors.” Next comes building the structures, frameworks, and programs, Kwong says. It’s a Marathon, Not a SprintNurturing a purpose-driven workplace takes time, says panelist Daniel Allred, VP of human resources at ZAGG Inc.“It’s a process,” he said. “You can’t put in place corporate values tomorrow that are going to get you exactly where you want to be. But you do have to take steps today to get alignment behind, starting at the top with the senior executives.” The forward movement is the important thing to focus on, especially as things constantly change. ZAGG has experienced a lot of change as of late that wasn’t always handled well, says Allred. But they learned, and now they do things differently. They found that meeting regularly, monthly rather than sporadic, and transparency work best. “We put on the screen every single month exactly what we’re tracking,” he said. “We were very open and transparent about the hurdles we’re facing, where we fell on our faces and where we succeeded.”That regular, open communication has helped alignment fall into place. “It’s not a two month process. Sometimes that takes place over a year. And so acknowledging that continuing to push forward even when it gets hard and discouraging, that’s what’s really going to make the biggest difference.”The company recognized that managers needed a way to recognize team members, so they instituted the ZAGG Champion Awards, a gift card as a way to say good job. The hope is that as the employee enjoys the gift card with a loved one, they can connect the dots that they earned this reward for working hard on a project. Hope for GrowthKnowing what’s possible can help employees find meaning in their everyday work. For panelist Tracie Kalmar, head of human resources at ApplicantPro, the hope of growing in the company needs to start at hiring. “My favorite demographic to hire right now are women returning to the workforce after a break to raise their family or to go to college,” she said. Since there is a gap in their resume, they worry. But Kalmar offers hope. During the interview process, she shares how others have started in one position, but then grown into another position. So even before day one, potential employees can see where they could go. She continues this regularly by emailing open opportunities weekly, plus sharing internal promotions. “I love talking about it. I can actually say I see it happening. And it’s real.” Seeing those doors open for others helps new employees have hope and find purpose in what they are doing.Carrie Snider is a Phoenix-based journalist and marketing copywriter.

Carrie Snider | April 05, 2024