Most people are aware of the Butterfly Effect—the concept of small events resulting in much larger consequences. Like the flap of a butterfly’s wings in Brazil causing a hurricane in Texas, employee turnover results in catastrophe across an organization. “For the want of a nail the shoe was lost; for the want of a shoe the horse was lost; for the want of a horse the rider was lost; for the want of a rider the battle was lost; for the want …
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Managers frequently utilize the concept of customer lifetime value (LTV)—a prediction of the net profit attributed to the entire future relationship with a customer. The benefits of calculating LTV are numerous; the metric informs decisions about customer acquisition, retention, and overall value. Though employee lifetime value (ELTV) can be difficult to quantify, managers can still benefit from considering the value that an employee adds to a company over the course of his or her tenure. The basic structure of the …
Traditionally, men have held the majority of jobs in sectors like manufacturing and logistics. As the decades-long trend of women entering the labor market accelerates, many women are opting to take frontline jobs. Women in the workforce are now involved in the rising wages and alternatives to college offered by frontline positions. Workers are scarce. Recent data prove that frontline worker shortages are challenging firms. At the end of 2018, the Conference Board reported that hourly job openings are growing, …
Technology, macroeconomic forces, and other paradigm shifts are affecting human resources in frontline work environments. Below are five investigations into prominent blue-collar human resources trends. Low worker supply and high worker demand. A few days ago, the U.S. Department of Commerce reported a 3.2% GDP growth rate for the first quarter of 2019, significantly beating analyst expectations. A growing economy indicates that workers will remain in high demand for the foreseeable future. However, frontline workers are also in low supply. …
A significant challenge faced by human resources departments lies in understanding employee sentiments and pain points. Yet, the methods used by modern human resources professionals are severely outdated. Collecting continuous employee feedback is the future of workforce measurement; executives and workers alike benefit from its implementation. No one likes performance reviews. Most American workers dread the annual or quarterly “performance review.” Managers loathe the process of evaluating their employees in an often uncomfortable interview format. The roots of the performance …
2019 will be a strong year for the minimum wage in America. Minimum wage policy—which requires employers to pay all workers at or above a particular threshold—is closely linked to discussions about the health of the United States frontline workforce. A few weeks ago, Maryland approved a gradual increase in its state minimum wage from $10.10 to $15 per hour. Michigan recently affirmed a twenty-cent increase in its minimum wage, bumping the rate from $9.25 to $9.45 per hour. In …
In the United States, much attention is devoted to white-collar workers employed in vocations such as law, business, engineering, and medicine. However, blue-collar workers in frontline sectors still compose the backbone of the American economy. Furthermore, their work is no less important than their white-collar counterparts. Managers must understand how blue-collar human resources strategies are different from those relevant to knowledge workers. Office workers and frontline workers are psychologically distinct. Abraham Maslow’s Hierarchy of Needs—a well-known psychological theory—serves as an …
Professor Peter Cappelli is the George W. Taylor Professor of Management at the University of Pennsylvania’s Wharton School, where he directs the Wharton Center for Human Resources. Professor Cappelli was named one of the top five most influential thinkers in management by HR Magazine. He earned his D. Phil. in Labor Economics from Oxford University. Professor Cappelli’s research deals largely with adapting human resources to a changing labor economy. Among the many articles and books published throughout his career is …
Citizens of industrialized countries often hear a monolithic, dismal story about the future of global manufacturing. This narrative unfolds as follows: robots will replace hourly workers, mass unemployment will ensue, and poverty will spread like wildfire. According to countless studies and analyses, this tale is not so simple. Around the world, the future of global manufacturing and frontline labor is robust. The United States: strong growth and labor shortages. Demand for jobs, wage hikes, and labor shortages will define the …
Companies in frontline industries suffer from high employee turnover rates. Good employee turnover is often an elusive goal for frontline businesses. According to data from the Bureau of Labor Statistics released in 2017, certain industries experience much more churn than others. Transportation, warehousing, and utilities: 41.0% Manufacturing: 30.4% Accommodation and food services: 72.5% Retail: 53.0% Construction: 60.1% Industry-specific reports reveal even higher turnover rates. For example, the American Trucking Association found that annual churn in the 3PL industry was nearly …