A rising trend in the business world is the recognition of the value of treating employees well. Companies like Costco and Trader Joe’s, who pay workers well above the minimum wage, offer generous benefits and foster a positive work environment, are reaping the rewards of increased productivity and customer satisfaction. A study on the retail industry by the Harvard Business Review found that investing in employees leads to better operational execution, which boosts profits.

This approach contrasts with the traditional model of cutting labour costs to increase profits. The ‘good jobs strategy’ is not just about higher pay, but also involves investment in training, offering fewer but higher-quality products, and empowering employees to make decisions. This strategy requires a shift in thinking, as it is about seeing workers as an asset to be invested in, rather than a cost to be minimised.

The benefits of this approach are not limited to retail. Companies in other sectors, such as software company SAS Institute, have also found success with this model. Despite the evidence, many businesses remain resistant to change, often due to the short-term costs involved. However, the long-term benefits in terms of increased productivity, customer satisfaction, and ultimately, profits, suggest that treating employees well is a smart business strategy.

Go to source article: http://m.theatlantic.com/business/archive/2014/11/a-new-business-strategy-treating-employees-well/383192/