The management class has done a dismal job of managing frontline workers. These are the people who make, pack and deliver stuff, deal directly with customers, do the grunt work in hospitals and offices, and, particularly in the United States, are paid a wage rather than a salary: what the Bible calls "hewers of wood and drawers of water."
Managers think about companies as hierarchies with the CEO at the top and the janitor at the bottom. Management theorists agonize about knowledge workers and their fragile egos. A study of how CEOs manage their time by two Harvard Business School luminaries, Michael Porter and Nitin Nohria, found that, on average, CEOs spend just 3% of their time with frontline workers, 6% with customers and 72% in meetings. 3 versus 72!
A handful of CEOs and gurus have tried to shift the focus. Bill George, CEO of Medtronic from 1991 to 2001, established a 30/30/30/10 rule for his time — 30% with frontline workers, 30% with customers, 30% with executives and 10% with external constituencies.
Hubert Joly, the CEO of Best Buy from 2012 to 2019, spent his first week as CEO in its stores in St. Cloud, Minnesota, where he worked with customers and frontline workers wearing a "CEO in training" badge. As CEO, he made a point of meeting with thousands of foot soldiers.
The rest of the management world is beginning to catch up with these pioneers thanks, in large part, to Covid. The pandemic not only revealed how dependent we all are on the hewers of wood. It also revealed how bitterly many of them hate their jobs.
In March 2022, the United States suffered from 11 million job vacancies, most of them frontline jobs in retail, health care, hotels, restaurants, call centers, etc. Similar shortages emerged across the rich world.
Zeynep Ton, a professor at the MIT Sloan School, reports in her forthcoming book, “The Case for Good Jobs,” that in 2019-20 Nissan's Smyrna, Tennessee, assembly plant suffered from a 38% turnover rate among its technicians; the direct cost of replacing each technician was $15,000.
The Covid pandemic may be fading but the structural problems that it highlighted are growing. The demographic picture is dire: The shrinking of the working-age population across the rich world means that companies will have to work harder to attract prime-age workers while also finding new demographic pools to fish in. The simultaneous rise in the number of older people will increase demand for caregivers and home helps.
Frontline work is also getting more unpleasant thanks to a tidal wave of rage sweeping across the world. According to a 2022 survey of U.S. frontline workers, 73% report that it is not unusual for customers to behave "badly," up from 61% in 2012.
Why so many people seem to be in a permanent rage is hard to fathom, but poor work organization plays a part.The more companies try to eliminate frontline workers, the more the few who remain bear the brunt of customer frustration.
A shaken management class is thinking harder about the costs of neglecting frontline staff and ways to improve frontline jobs. This means more than just paying higher wages — though pay is driving the upsurge in strikes. It certainly means more than just calling frontline workers "partners" or allowing them to "bring their whole selves to work" by displaying tattoos, the subject of a great deal of idle boasting by giant corporations.
It means thinking of them as "talent" rather than costs, and individuals rather than interchangeable cogs. It means looking at the company from the bottom-up — or rather from the frontline in — rather than the top down or the headquarters out.
In "The High Cost of Neglecting Low-Wage Workers" in the Harvard Business Review, Joseph Fuller and Manjari Raman suggest several ways of improving the management of the frontline:
• Get to know your workers. The level of ignorance is astonishing. Companies don't realize that most low-wage workers want to stay with them. Fifty-one percent of the workers they surveyed had been with their company for four years or more and 47% said that they would be very likely to recommend it to a friend. They don't realize the premium that low-wage workers place on location in choosing their jobs: When asked why they changed jobs in the past, 64% cited greater convenience in getting to work, compared with 43% who cited pay.
• Understand the business case for investment. Companies focus on the overt cost of investing in skills while ignoring the hidden cost of churn — that is, hiring and onboarding new employees, paying overtime to existing staff to fill in unexpected gaps and resorting to staffing agencies to provide just-in-time workers.
The Walt Disney Co. launched an ambitious education program, called Disney Aspire, that allows full- and part-time workers of more than 90-days standing to earn a degree or high school diploma or to acquire a vocational skill with the company paying 100% of the tuition costs up front and reimbursing them for fees and books. More than 14,000 hourly employees are enrolled in the course and more than 2,800 have been promoted internally after gaining qualifications.
• Improve communication with frontline workers. Three practices are particularly productive: offering and publicizing career pathways, detailing opportunities to improve skills, and providing mentorship.
Chipotle makes a point not only of promoting from within (80% of its leaders have risen through the ranks), but also publicizing how much various grades of workers can earn in salary and compensation. Yet a striking number of companies don't bother to offer any upward paths to frontline workers whatsoever, reserving those to salaried workers.
• Collaborate with other companies. Small companies that lack the gigantic resources of Disney can band together to address the problems of their frontline workers. Mark Peters, the CEO of Butterball Farms created a non-profit consortium of 25 companies, called The Source, to provide low-wage employees with advice on secure housing, food assistance, heath care, transport and education.
I would add three thoughts of my own to this list:
• Pay more attention to "diverse" groups. Big supermarkets such as Walmart in the U.S. and Waitrose in Britain have enjoyed significant success with older workers. This has been predicated on taking into account the unique problems such workers face: making it easy to take unscheduled leave, to deal with family tragedies, or take long holidays, to account for the retired status of many of their contemporaries. Neurologically diverse people or ex-offenders may also provide significant new pools of workers.
• Make scheduling as predictable as possible. Sudden changes in schedules can be both expensive and disruptive for poorer workers who don't have their own cars or who must come up with someone to look after dependents at short notice.
• Don't diss your employees. Ton reports that one of her colleagues who signed up for a frontline job was given just two pieces of advice: "turn up on time and don't steal."
Amazon is notorious for measuring the amount of time employees in its fulfillment centers spend in lavatory breaks. In a generous spirit the company once thanked workers for coming in on a holiday by giving them a goody bag containing a soda and chocolate bar — but only if they hit their production target. No wonder its hourly associates reportedly suffer from an annual turnover rate of 150%.
Over recent decades, companies have made impressive progress on improving the management of knowledge-workers — understanding their needs, making it easier for them to work flexibly and providing them with the training that they need to progress up the career ladder. It is time to apply the same understanding to the hewers of wood and drawers of water on whose bent shoulders the edifice rests.
Adrian Wooldridge is the global business columnist at Bloomberg Opinion. His previous article was “Some people get to start life ahead of everyone else. Is that fair?”.
First Published: April 27, 2023, 4:00 a.m.
