This weekend the NYTimes ran a story headlined "Apple’s Retail Army, Long on Loyalty but Short on Pay".
We learn that of the 43,000 U.S. Apple employees, 30,000 are relatively low-paid store employees. Apple's 327 stores sold $16 billion in merchandise, and have per square foot earnings that are higher than any other retailer (next is Tiffany's).
While Apple's CEO received stock grants last year that are valued at $570 million, many Apple retail employees earn between $25,000 to $36,000 per year. Dividing total store revenue by Apple store employees the NYTimes calculates that each Apple "specialist" earns the company about $473,000 per year - more than double the revenue per employee typical electronic and appliance retailers.
The NYTimes reports that Apple is sensitive to the perception that the company is inadequately generous in sharing its profit windfall with its lowest paid employees. Apple is raising hourly wages, and the company continues to offer excellent health and retirement benefits. The demand for Apple retail jobs remains very strong amongst under-employed recent college graduates, and having Apple on a resume is seen as a definite perk.
Despite the cachet of working in an Apple store and the terrible job market, Apple has seen an erosion of retention amongst store employees. This turnover is thought to be the result of a relentless work pace brought on the by success of iPhones and iPads, as well as strong growth in laptop sales. Apple employees also have limited ability to move up in the organization, as promotions to technicians at the Genius Bar are both the only route off the sales floor and spaces rarely open up.
Is there an opportunity for Apple to both improve the quality of its store workforce and lower turnover, while increasing the quality of applicants without dramatically raising costs? Is there some way that Apple could leverage this army of 30,000 budding young professionals to serve long-term strategic company goals?
The answer, I believe, might be to turn Apple's store employees (all those specialists) into AppleU students.
One obstacle that would need to be overcome is that AppleU does not exist. My understanding of the existing Apple University, headed by former Yale School of Management dean Joel Podolny, was put together to pass along Steve Jobs' management philosophy to Apple's HIPO's (high potentials). It is an elite and rarified place. (I could be wrong….it would be great to learn more about what the real Apple University is really about).
What I'm thinking for an AppleU would be an accredited institution built for Apple's rank and file employees. Apple would need to partner with or purchase an existing accredited school, but this seems like a small expense for a company with a market cap of $544 billion and $28.5 billion of cash on hand.
Here's how an AppleU could work:
Curriculum Built Around Apple Hardware and Software: With AppleU, Apple could be assured that every student (Apple employee) would only use Apple products. What sort of learning innovations could be designed knowing that every learner has an iPhone, iPad, and MacBook? Wouldn't this be a great population in which to test new software or products that can be sold to the education marketplace? What sort of innovations might Apple come up with when it had to use its products to deliver education to a student body of 30,000?
Built Around iTunesU Open Content: By combining the open education materials on iTunesU with Apple's own facilitators, Apple could experiment at scale with methods to lower education costs through the use of open education materials. Apple would be in a position to both drive more content into iTunesU and iBooks Author (as this would be the most efficient mechanism to develop new content), as well as to evaluate and improve this open education content in the real world setting of AppleU.
Experimentation and Outcomes. Apple employees would be the perfect population to run large scale experiments on, as participation in education experiments would be understood as part of the deal in getting a free AppleU education. Apple would also be able to correlate academic success at AppleU with subsequent positive work outcomes, as they would have access to data on both the education and employment side.
What degrees should AppleU offer? Rather than guessing what Apple employees want, they could rigorously survey employees to understand what they need. My bet is that AppleU would start with an MBA degree for college graduates, and a business degree for employees that have not yet finished college. The twist would be that the business degrees would have a strong technology, design and art influence, fulfilling Apple's branding as working at the intersection of the technology and the liberal arts.
How expensive would it be for Apple to open up AppleU? If Apple utilized open education materials and the company's existing hardware and software platforms (iBooks Author as the LMS maybe), the cost would be manageable. Maybe AppleU could even be a revenue generator in the future, opening up enrollment for non-Apple employees. (Who wouldn't want to attend AppleU?) The returns on employee productivity and loyalty would be well worth the expenses in starting up AppleU.
Are any of you tight enough with Tim Cook to pitch this idea?
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