BrainTrust Query: Do retailers know how to manage knowledge workers?
I've followed the headlines recently as various retail organizations announced outsourcing or layoffs of information technology (IT) and industrial engineering (IE) workers and I've asked myself whether these layoffs make sense or whether companies are being short-sighted.
These knowledge workers (KWs) have several unique characteristics that retail management must appreciate when they make decisions that affect them. First, they often have unique knowledge of company resources that cannot be replaced by another technician or knowledge worker, for example, something as critical as the way a retailer's critical replenishment application works.
Second, KWs have enormous leverage in their impact on the organization. Changing a replenishment algorithm or improving a forecasting estimate can have a ripple effect on all the various operating units of the company. Spending an extra hour to design a better check stand or to simplify a sign-in procedure can impact thousands of co-workers.
The challenge is that it is often difficult to measure the quality of results coming from knowledge workers. Who's to say "there are no better ways to do this"? Of course, that is one of the challenges with managing KWs as "paralysis through analysis" can lead to rejecting the good in search for the perfect. But KWs are also the most flexible members of your organization because they can adapt to new roles and learn the requirements of different positions quickly.
Knowledge Workers often have different motivation than their hourly counterparts. They tend to have a strong sense of ownership in the solutions they design, so while salary is necessary, simple praise or recognition for extra work are often enough of a reward. Educational opportunities and attendance to conferences can be as important as salary increases. Knowledge workers need to understand how their efforts impact the rest of the organization. This sense of contribution is often a reward in itself.
Discussion Questions: Do you think the total impact on "corporate knowledge" caused by outsourcing or replacing in-house knowledge workers is understood? Do you believe retailers fully appreciate the contribution of KWs? Do you think most KWs would accept a reduction in salary to preserve theirs or a co-worker's job?
[Author's Commentary] "All generalities are false, including this one.”
It is wrong to put all knowledge workers into the same mold, but I believe retailers have not always thought through the alternatives before deciding to outsource, replace, or lay off KWs. I really think many of these workers would relish the opportunity to help their companies address the impact of the current economy.
By clearly stating the business objectives, business managers could both challenge and motivate KWs to find ways of surviving. Outright salary reductions may be too much of a morale buster, but by combining reduced increases with emphasis on training and recognition it may be possible to reduce overall personnel cost without losing valuable knowledge. Retailers might consider job transfers, whether temporary or permanent, which would give KWs an opportunity to learn and help other areas of the business.
Retailers need to figure out a way to retain their "corporate knowledge base" during these difficult economic times so they're ready to take advantage of the recovery.