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How retailers can create better jobs and maximize their socio-economic impact

Jesse Nishinaga

One in four jobs.

That’s roughly the ratio of people in the U.S. that the retail industry directly employs or supports. The story is similar in places like the U.K. and in many other countries around the world.

As these statistics imply, retail is all around us.

Every single day, millions of retail workers around the world go to work to serve us food or coffee, help us pick out clothing or the products we need, or provide us with support when our cell phones or Internet service goes awry. These are the store clerks, cashiers, restaurant workers, customer service representatives, and so on, who provide an indispensable link between us and the products and services we buy.

But in our fast-paced, daily lives, most of us spend little time thinking about the impact that these jobs have on the very people we encounter every day and on the communities in which we all live and participate in.

When we buy our first coffee in the morning at our favorite local café, most of us are probably not thinking about the impact that a retail job brings to the barista that just served us. We may not realize that a typical retail worker in the U.S. working a full week still earns less than the poverty threshold for a family of four. We also may not know—and may not be surprised to learn—that, according to one recent report by the British Retail Consortium (BRC), the percentage of retail workers in the U.K. on low pay (defined as 1.2 times the minimum wage) has nearly doubled since 1990 to over 60%.

And while many of these jobs provide a stepping stone for young people to work in their first jobs and gain valuable experience, we tend to forget that most of these jobs are employed by older workers who need these jobs to support their families and their livelihoods. At least in the U.S., the median age for retail workers is 38 years—hardly someone who is just starting out their professional lives.

And it’s not just about pay. It’s about the conditions of the job, too—from making sure every worker is treated with dignity, respect, and fairness, to creating more predictable work schedules, to empowering workers to make an environmental impact, to providing opportunities for career and educational advancement.

As Professor Ton of MIT, a leading expert in retail operations, described, there’s a “vicious cycle” in retail, where “the conventional wisdom is that many companies have no choice but to offer bad jobs” to minimize labor costs so that they can keep prices low for their customers.

We believe there’s another way.

Corporate Citizenship has helped many companies conduct socio-economic impact studies to demonstrate the impact of their operations on peoples’ lives, their communities, and the wider local economies in which these companies operate. Given the size and scale of the retail industry—one that’s worth almost a third of global GDP—there is opportunity for retailers to create positive impact for millions of people around the world. In practice, this starts with retailers answering some fundamental questions about themselves, including:

  • How many jobs are we creating in the local and wider economy?
  • How do our workers, of all ages, skills, and backgrounds, benefit from the training and development opportunities we provide?
  • How does our supply chain stimulate growth of local businesses and neighboring communities?
  • How does our partnerships and investments in the local community help improve the quality of life of our key beneficiaries?
  • How do our environmental programs generate operational efficiencies, as well as employee and customer engagement opportunities at the retail level?

By answering these questions, we believe retailers will have new data and insights that can lead to:

  • Better jobs and greater business resilience. Impact data can help retailers understand how existing practices may be vulnerable to new costs, risks, or reputational damage. For example, by understanding how jobs are impacting individual workers’ lives, retailers can create better jobs, from improving work schedules, wages, and benefits to enhancing training and employee engagement opportunities, leading to greater productivity, loyalty, and happiness. This, in turn, can create competitive advantage for attracting and retaining talent, as well as strengthen overall business resilience. 
  • Improved engagement with key stakeholders. Impact data can help retailers engage in fact-based dialogue with key stakeholders on shared issues. Retailers can achieve local license-to-operate by demonstrating the direct and wider contributions to the local economy and by building better relationships with local government and policy makers, nonprofits, and civic organizations that are working to bring new opportunities into their communities. 
  • New innovations that are locally relevant. Impact data can help retailers identify new opportunities to work with local stakeholders, such as businesses and suppliers that understand the local market, but who are also eager to leverage larger companies for resources to achieve greater scale. These interactions can lead to new products, services, and innovations that are more tailored to the local customers’ needs and tastes—all the while, stimulating greater economic development in the communities in which these businesses reside.

In the weeks and months to follow, we will share more of our thoughts and work in this space with the hope of engaging companies, especially those in the retail industry, on the value of socio-economic impact studies in making the case for creating stronger businesses, more vibrant communities, and better jobs that bring purpose and value to all.

If you are interested in learning more about our work in this area, check out our new industry factsheet on our website or drop us a line at impact@corporate-citizenship.com.

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