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The Race to the Bottom: Absent–Employee Engagement

July 19, 2015
Loblaws strike The corporate world is peculiar. Lots off odd–and corrupt–things occur in companies, large and small, at home and in far corners of the world. When it comes to oddities, sometimes one can distill a certain sense of reasoning and logic. But often we scratch our heads, wondering what the heck is going on?

Your faithful correspondent has seen plenty of weird stuff in his 40 years in the job market. One of the weirder–no, let’s be straight here and call it perverse–practices in the corporate world has been the introduction of top employer awards. These back-scratching, self-serving awards have undermined their initial intent: to recognize and profile companies, regardless of size, that have demonstrated strong leadership in business growth, employee relations, learning and development, and social and environmental responsibility.

In short, these companies aren’t focused on shareholder value growth, a notion that former CEO of General Electric Jack Welch harshly criticized a few years ago. Real top employers operate in a holistic manner. They practice leadership on a daily basis and engage employees at all levels of the organization.

One vital element of being a truly excellent employer is how you treat your employees. And that includes being transparent with your business decisions, corporate strategies, and relations with employees and unions (if present). If you’re not doing this on a daily basis then your company has no right to being part of a top employer ranking.

Yet as just noted there’s weird stuff going on in the corporate world. Witness Loblaws, Canada’s biggest grocery chain, which has won for six consecutive years a top 100 employer award.

Loblaws Strike 2 It defies logic. How can a company that has worked relentlessly at shrinking its workforce and diminishing the role of its unions be included in the contrived top 100 employer ranking? Your correspondent has been a Loblaws customer for over 15 years, though not a willing participant due to Ottawa’s non-competitive grocery market. At your correspondent’s local Loblaws store, the dwindling staff slog on, grim-faced, stocking shelves and responding to customer inquiries, but never initiating with “May I help you find something?”

One of Loblaws’ tactics has been to change the names of its stores, ostensibly as part of rebranding exercises, thus creating new legal entities. The result is employees being faced with new employment conditions, including wages and work hours. Unfortunately, your correspondent witnessed a number of his favorite employees, notably experienced cashiers, leave the company, accepting exit packages offering lump sum payments. The remaining staff appear defeated as they go about their daily work duties.

Recently, 97% of Loblaws workers in Ontario voted to go on strike over several bargaining issues. Days before publishing this post, members of the union representing 12,000 workers at 60 Loblaws stores in Ontario avoided a strike by voting for a six-year contract. Members of locals representing other Loblaws branded stores had yet to hold ratification votes.

Yours truly has made a point to engage many of the employees at his local store in conversation, from cashiers to department stockers. It’s amazing how revealing and honest people are when you show that you’re interested in their plight. Employees detest Loblaws. They detest how they’re treated, how their wages have been manipulated downwards, and how staffing is done at minimal levels, combined with almost everyone in a store being part-time.

Sobeys The problem of strikes, threatened and actual, has plagued Loblaws for years. Largely driven by the fear of the Walmart groceries juggernaut and Target, the latter of which collapsed within two years and left Canada with its tail between its legs. Loblaws has engaged in a race-to-the-bottom of cost-cutting, union-fighting and new supply chain management, which proved to be a disaster a few year ago. The result has been thinly staffed stores, with varying pay rates within stores due to the union issue. The consequence is poor customer service, despite the valiant efforts of many Loblaws employees.

Recently, your correspondent and his wife, Sue, moved a few miles away to new neighborhood. Interestingly, there’s no Loblaws store nearby; instead, there’s a Sobey’s store a few minutes away. One afternoon, shortly after moving in, yours truly visited the Sobeys store, a five minute walk away. Sobeys is Canada’s second largest grocer, based in Stellarton, Nova Scotia, and a grocer not without its own union issues.

The first thing your correspondent noticed when entering the store were employees, many employees, in contrast to Loblaws. When inquiring about supplements to an employee, the fellow explained that he wasn’t all that familiar with them but would find someone who was. Your faithful’s expectation was a Loblaws experience, with no one coming to help. A few minutes later a young pharmacist approached, asking how he could help. He then ushered your surprised correspondent to his office and proceeded to seek more information.

A repeat performance occurred a few days later, but this time with the fellow who managed the grocery part of the store, who had in an earlier visit helped with a question on a product. He made a point of acknowledging your correspondent, saying, “Give it a few weeks and you’ll get to know the store.”

These were mind-altering moments, for never in his years of shopping at Loblaws had staff shown that much interest in his needs. But it doesn’t negate the point that workers in Canada, in this instance grocery employees, face the ongoing downward pressures of corporate cost-cutting. One could ponder what the absence of unions in Loblaws and Sobeys would mean for hourly wage rates, working conditions, benefits and pensions.

It comes down to this: if a company wishes to be legitimately seen by the public and its employees as a top employee then the true test is whether it consistently delivers superb customer service. If you’re doing this as a company then you’re likely treating your employees well.

Whole Foods 1 Let’s quickly check out two innovative grocery companies in the United States as a comparison.

Trader Joe’s, founded in 1958 as Pronto Markets, with a name change in 1967 to its current form (owned since 1979 by a German family trust) sets the bar for customer-focused grocery stores. Your correspondent and his wife visited a Trader Joe’s in 2008 in San Diego while on a trip. It was certainly an eye-opening experience, prompting an email to the company to see if it had any plans to come to Canada. Alas, no.

And witness Whole Foods (pictured above and below), founded in 1980 in Austin, Texas, another hugely successful American grocer that just opened near downtown Ottawa. This required a visit from yours truly to see just what all the fuss is about. Well, it’s certainly not overstated. Our visit was, again, an eye-opening experience, with a big selection of specialty products, reasonable prices and courteous staff. Indeed, a subsequent email was sent to Whole Foods to ask them to consider opening their next store in Ottawa’s west end.

On February 9, 2012, Trader Joe’s followed Whole Foods’ lead and signed an agreement with the Coalition of Immokalee Workers (CIW), a group based in Immokalee, Florida, recognized for its successful Fair Food campaign.

Whole Foods 2 Big is not always better, regardless of whether a company achieves economies of scale. The problem with big, besides the pointy heads in head office being detached from customers and employees who work the frontlines, is the impact on people–allegedly a company’s most valuable asset–when corporate cost-cutting becomes the focus of its attention and existence.

Competition drives innovation, customer service and value-pricing for consumers. And in the process employees stand a chance of being treated more humanely. Canada’s oligopolistic grocery market is serving no one but shareholders.

It’s time for a change and an end to the race to the bottom.

When you shop pay attention to the work environment. Are the employees attentive, initiating contact with you, and do they smile readily, indicating some measure of happiness with their work? Make a point of engaging them in conversation. Let them know you care about how they’re treated by their employer.

I’m not concerned with your liking or disliking me… All I ask is that you respect me as a human being.

– Jackie Robinson (Second baseman and first African American to play in the major leagues)

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2 Comments leave one →
  1. Alex Motr permalink
    July 22, 2015 3:06 am

    Intellectual disability does not allow them to see the other ways to make money other than the banal “buy cheaper – sell high” and squeezing employees to the very last drop.
    Perfect illustration of neoliberalism in action: “everything either is for sale or is plundered for profit”.(Henry A. Giroux, 2004)

    • July 22, 2015 12:56 pm

      It is, indeed, in today’s job market about squeezing workers to the very last drop. There’s no light at the end of the tunnel. Great quotation from respected academic and author Giroux. Thanks for sharing a comment.

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