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The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits by Zeynep Ton

Published in January of 2014.

Why do three-quarters of professors in the U.S. work without the protections of job security and academic freedom that come with being on the tenure track?

What are the reasons that almost every (although not all) colleges and universities have decided that the only way they can survive is to depend on adjuncts, part-time, and other non-tenure track professors to teach their classes?

The answer to these questions is not one of ideas or ideals.  When asked, I’d bet that almost every college and university leader would report that if it were possible, they’d prefer to create more tenure track faculty lines.

The reason that schools rely on non tenure-track faculty to teach the plurality of courses and the majority of our students is not one of philosophy, but of money.  Labor accounts for about three-quarters of college and university budgets.  In an era of declining public support, challenging demographics, and rising costs for everything from healthcare to student services - universities can economize by staffing courses with relatively inexpensive adjunct professors.

The conventional wisdom is that to survive, universities must follow the adjunctification playbook.

But what if the conventional wisdom is wrong?

Could it be that following a strategy that prioritizes the creation of tenure track faculty lines might improve the economic resiliency of colleges and universities?

For anyone who wonders about the economic wisdom of the dominant thinking around faculty labor markets, a good book read is Zeynep Ton’s The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits.

I had missed this book when it came out in 2014, only learning about it from reading the Dan Lyons book Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us.  (See my review).  

In The Good Jobs Strategy, Ton takes on the idea that companies enhance their profits and long-terms success by minimizing labor costs and worker security.  Ton's approach is to look at the sector that is seemingly most dependent on a low-wage strategy, low-cost retail.  The idea is that if retail stores can thrive by paying their employees well and by offering reasonable levels of job security, then any sector should also be able to do the same.

What Ton found was that companies that followed a strategy of paying low wages and offering insecure employment were likely, over time, to run into serious financial difficulties.  Conversely, companies that paid their employees well and focussed on  job quality tended to be both more stable and more profitable over the long-run.

The reason that following a “good jobs strategy” seemed to work well in Ton’s sample of companies - including Costco, Merca­dona, Trader Joe’s, and QuikTrip - are many.  Ton found that failing to focus on employee well-being led to high levels of both employee turnover, and low productivity of employees that remained.  This high turnover and low per-employee productive forced companies that did not follow a good jobs strategy to spend much more money on management, overhead, and oversight.

At companies such as Home Depot that once focussed on employee well-being, and then to save money moved from full-time skilled workers to part-time unskilled employees, both the customer experience and the brand suffered.

For a company to follow a good jobs strategy successfully, some tradeoffs need to be made.  Successful companies seem to set limits.  Trader Joe’s limit the number of items that it sells.  A typical Trader Joe’s will have about 4,000 separate items (SKU’s) available in a store.  This compares to almost 40,000 items at a typical grocery store.  At Costco, there will be about 3,700 items for sale, versus about 140,000 Walmart.  Nor does Costco spend money on advertising,

If bricks and mortar retail can thrive by following a good jobs strategy, might higher ed do the same?

There is evidence that spending less on full-time faculty saves money mostly shifts costs from instruction to administration.…

We don’t have a good understanding of the relationship being student attrition and faculty employment strategies.  It is a reasonable hypothesis that faculty in secure full-time roles are more able to spend time mentoring and coaching students than part-time and insecurely employed professors.

Adjunctification has perhaps enabled the leadership of many colleges and universities to avoid some hard choices around institutional focus.  Rather than figuring out what a college and university does best, and investing in the faculty required to build on those strengths - many institutions seem to chase the latest higher ed fad.

As detailed in The Good Jobs Strategy, a focus on employee well-being requires disciplined leadership and a willingness to make hard trade-offs.

Should we understand it as a failure of academic leadership when a school fails to create tenure track roles, and instead relies more and more on adjunct and part-time professors?

Can we give examples beyond the wealthiest of institutions that are thriving by following a good faculty jobs strategy?

What are you reading?

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