The Neglected Consequences of Overlooking Workers Earning Low Wages

The article discusses how companies are neglecting low-wage workers and the high cost of this neglect. The authors (Joseph Fuller and Manjari Raman) argue that companies are not recognising the contribution of low-wage workers to executing their strategies, not measuring all the hidden costs of constant churn, and not implementing management practices that could improve the productivity of low-wage workers and encourage them to stay and prosper at the company. The authors found that companies devote vastly more attention to salaried workers than to hourly workers, even though the latter constitute more than 40% of the U.S. labour force. This pattern of denial and neglect hurts workers in ways that have profound societal costs. The article also highlights the direct and indirect costs on companies, including lower retention and higher absenteeism, more overtime, a reliance on staffing agencies to provide temporary workers, constant recruitment and training of new employees, a lowering of morale, a loss of institutional and process knowledge, a decline in customer goodwill, a damaged reputation among job seekers, stagnant or lower rates of productivity, and less revenue.

The above is my summary from " The High Cost of Neglecting Low Wage Workers", Harvard Business Review (May- June 2023)/Reprint S23031

The full article can be accessed at:

https://hbr.org/2023/05/the-high-cost-of-neglecting-low-wage-workers