Category: Work and Employment

Retailing during the holidays

Posted by MIT Sloan Executive Education - 30 days ago


Earlier this week, gear and sports retailer REI (Recreational Equipment, Inc.) announced that its 143 stores will be closed on the day after Thanksgiving, otherwise known as "Black Friday," a day that many retailers view as the most important shopping day of the year. The Seattle-based retailer has launched a campaign "encouraging people to forgo shopping and spend time outside instead."

The issue of retailers opening on Thanksgiving Day has become a contentious one of late. While convenience stores, grocery stores, and liquor stores may be providing essential goods on the holiday, few people really need to go out and buy electronics and other gadgets on a day intended to be about family. As we highlighted on the this blog last year, most people who rely on retail jobs for their income are forced to work on holidays if the store decides to stay open. But the decision to close on the following day is nearly unheard of in the U.S.—especially considering that REI is paying its employees for the day off.

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Who will power the IoT economy?

Posted by MIT Sloan Executive Education - 1 month and 12 days ago

By Peter Hirst, Associate Dean, MIT Sloan Executive Education

IoT smaller

From driverless cars and sensor-laden industrial equipment to connected kitchens and smart cities---the Internet of Things (IoT) is cropping up everywhere, or so it seems. Recognizing the tremendous economic potential, tech giants and startups are investing heavily in IoT products and platforms. A recent report estimates that "the IoT will result in $1.7 trillion in value added to the global economy in 2019." Yet many employers are struggling to find the talent to propel the rapidly developing IoT economy towards the full extent of its promised value.

At last year's Internet of Things Word Forum in Chicago, Jeanne Beliveau-Dunn, Vice President and General Manager of Cisco Services, presented startling findings based on data from CareerBuilder, IBSG, and the U.S. Bureau of Labor Statistics:

  • One-million shortage of qualified workers in the Internet security industry in the next five years
  • Two million jobs needed in information technology and communications in the next ten years
  • Over 11 million people unemployed in the United States at that time
  • 45% of employers unable to find qualified candidates for open jobs

 As of this August 2015, the number of unemployed people in the U.S. dropped to 8 million. However, according to the U.S. Bureau of Labor Statistics, job growth came primarily from healthcare, social assistance, and financial services sectors--not technology companies.

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Is your lean startup violating labor laws?

Posted by MIT Sloan Executive Education - 2 months and 4 days ago


Many entrepreneurs today are well familiar with the principles of a lean startup. In a nutshell, they are guiding ideas on how startups can operate with much less waste. But over the years, what was really a theory on how to quickly build products that would be accepted in the marketplace became a practice on how to create entrepreneurial organizations with minimal financial investment. "Bootstrapping" and "working on a shoestring" have become synonymous.

Operating as leanly as possible makes much sense to most entrepreneurs--especially those who have not yet been funded. Many startups will leverage free and inexpensive services and technology to cut costs, and others will forgo hiring employees and instead rely on contractors to perform much of the work. While the latter may seem like a wise approach to building a lean organization, there is growing risk in that model. There are fundamental legal differences between a contractor and an employee, and startups fueled by the work of contractors need to be aware that government (state and federal) are cracking down on organizations that are intentionally or inadvertently violating labor laws.

Workforce magazine refers to the misclassification of employees as independent contractors as "the topic du jour in employment law." According to the U.S. Labor Department's Wage and Hour Division's formal interpretation of the federal Fair Labor Standards Act, “Misclassification of employees as independent contractors is found in an increasing number of workplaces in the United States, in part reflecting larger restructuring of business organizations." The government advisory concludes, "In sum, most workers are employees under the [federal law's] broad definitions."

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Did McDonald's take a step toward the Good Jobs Strategy?

Posted by MIT Sloan Executive Education - 7 months and 21 days ago

After several starts and stops, the U.S. established the modern national minimum wage in 1938, at $0.25 per hour. Since 2009, the national minimum wage in the U.S. has been $7.25 per hour, with 29 states setting the minimum wage higher than that mandated by the government. The issue is a contentious political issue, both on the national and local levels.

But the thing about minimum wage is it's just that: the bare minimum organizations need to pay workers. And some organizations are beginning to realize that the classic model of paying as little as necessary does not lead to higher profits; in fact, some companies--such as Trader Joe's and Costco--have proven that paying higher wages results in greater profits.


McDonald's, one of the top companies in the Fortune 500 ranking, recently announced it would raise wages and offer benefits to 90,000 employees in its corporate-owned stores. The plan is to increase wages to at least $1 more than the local minimum wage, bringing the average worker wage to $9.90 per hour, and, by 2016, to $10 per hour.

“We know that a motivated work force leads to better customer service, so we believe this initial step not only benefits our employees, it will improve McDonald's restaurant experience," said McDonald’s CEO Steve Easterbrook, as reported by The New York Times. Investing in employees is one part of what Zeynep Ton, Adjunct Associate Professor of Operations Management at MIT Sloan refers to as the "The Good Jobs Strategy.”

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High tech's shifting glass ceiling

Posted by MIT Sloan Executive Education - 8 months and 7 days ago

The current lawsuit in Silicon Valley by Ellen Pao against the venture capital firm Kleiner Perkins is drawing more attention to hot button issues in high tech, namely the very real and varied gender gap that continues to plague the industry.

According to the Forbes article, "Women in tech are losing, from top to bottom," only 9% of all CIOs are women. Why is the technology career path a tough road for women, and why do their numbers dwindle as they climb up the ranks? A recent study from MIT shows that women already inside the technology industry are experiencing what is known as a shifting glass ceiling, and it starts with the recruitment process.

Internal promotion vs external recruitment

In his paper, "Gender Sorting and the Glass Ceiling in High Tech," Roberto Fernandez, Professor of Organizational Studies at MIT Sloan, challenges the popular assumption that the prominent glass ceiling in the high tech industry is the result of disparities in the internal promotion processes. Instead, Fernandez claims that glass ceilings can also be the result of external recruitment.

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When snow days are no longer fun

Posted by MIT Sloan Executive Education - 9 months and 13 days ago

Some of you may look back fondly on the "snow days" of your youth, recalling the excitement and anticipation of hearing the announcement that meant a day to stay home and play. For those of us who currently reside in Greater Boston, however, snow days have lost their allure.

Since January 15, 2015, the Boston area has had an unusual number of snow storms resulting in an unprecedented amount of snow. We've had our snowiest month since record-keeping started in 1872, and (so far) the area is marking its third snowiest winter on record, with 89.2 inches. To put that in perspective, Boston has seen more snow in three weeks than Chicago has seen in an entire winter.

What's worse, the resulting snow days are wreaking havoc on businesses in the area. According to the Boston Globe, the snow has "cost Massachusetts companies more than $1 billion in lost sales and productivity." For large businesses, the decision to remain open or to close may be easy. Some businesses, like chain restaurants and retail stores, may have the analytics to back them up--data to understand how much revenue they’d need to earn to offset the cost of doing business that day. But smaller businesses--particularly restaurants and boutique stores--struggle with that decision. 

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Should retail stores be open on holidays?

Posted by MIT Sloan Executive Education - 1 year and 12 days ago

We recently watched a conversation on social media on the subject of retailers choosing to open on holidays--in this case, the upcoming Thanksgiving holiday here in the U.S. It's quite the heated topic: it has spawned a Facebook page urging consumers to boycott stores open on Thanksgiving, and there are any number of memes floating around listing the retailers who are choosing to open. And unfortunately, many of those retailers are the biggest ones here in the States.

One would think there's little controversy in urging businesses to let their employees have a day off of work to spend at home celebrating the holiday. But the "other side" can point to the fact that we have a free market society, and businesses can choose to operate (for the most part) however they want. The dark--and somewhat unspoken--side of that argument ignores the fact that many of these businesses are retailers and many retail workers are not given a choice in the matter. A common comment, of which we've seen a few variations, is that if people don't like working on Thanksgiving, they can just go get another job.

Opinions like these reveal some biases people have against retail jobs, display a lack of understanding of the retail market, and fly in the face of some hard facts. One might think of retail jobs as the domain of teenagers and retirees who simply need some "extra cash." That idea is simply not true. As MIT Sloan School of Management Adjunct Associate Professor Zeynep Ton pointed out in the webinar, "The Good Jobs Strategy: Why Good Jobs are Good for Business," there are 4.3 million salespeople in the U.S., the average sales associate is female and 38 years old, and many of them are supporting families. These retail jobs are considered "bad jobs," due to their low wages, erratic schedules, and lack of opportunities for advancement. But while it may appear one retail job is just like the next, few people, regardless of income level or other demographic information, can just "decide to go get another job." Employees need to factor in seniority, benefits, transportation, and numerous other variables that impact their ability to change jobs.

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What's your plan for the talent shortage?

Posted by MIT Sloan Executive Education - 1 year and 1 month and 10 days ago

There are plenty of predictions that the U.S. labor market is on the cusp of a wide-scale talent shortage. A 2014 survey from Challenger, Gray & Christmas, Inc., found that 77 percent of companies are currently having trouble hiring the right talent. Even worse, the same survey found that 90 percent of those companies expect it will get harder to recruit good talent as the economy continues to grow.

The Conference Board expects that the next 15 years will see companies facing lower profits and hiring wages as a result of retiring Baby Boomers and a strong economy. So now is the time to think about your company’s current approach to talent—and to make changes, if needed.

Start with a simple question: what role does recruiting talent play in your organization? There are many answers to this question. For example, Douglas Ready, Senior Lecturer in Organization Effectiveness at MIT Sloan School of Management, cited a division president of a Fortune 100 manufacturing company as saying, “We don’t need to waste time building a talent management process for our company … that’s what headhunters are for!” Clearly, this is an executive who views talent as bodies to fill open positions. That may work for some companies, but certainly not for those companies who understand the strategic value talent can play in an organization.

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