Amid the considerable hoopla around the supposed destruction of jobs by AI in the past few months, the somewhat uncomfortable reality of extremely low unemployment is often overlooked. Indeed, the unemployment rate has remained low throughout the decade since Oxford’s Frey and Osborne ignited the latest wave of concern about the impact of technology on jobs.

The reality in that period is that far from there being not enough jobs for us to do, the inverse is actually the case and organizations have struggled to find workers to fill vacancies. Data from the Census Bureau suggests that it’s a problem that is only going to get worse as the dependency ratio, which is defined as the number of people sixty-five and above for every 100 working-age people, grows from 25% today to 36% in 2050.

Creating good jobs

In The Case for Good Jobs, MIT Sloan’s Zeynep Ton suggests this should be the wake-up call employers need to ensure that they’re providing good jobs to people so that they’re both better able to attract but also retain the people they will be increasingly hard-pressed to recruit.

“While many leaders want to provide good jobs – that pay more, provide dignity and meaning in people’s work, and offer opportunities for growth – most don’t know how to start, or they don’t think it can be done without hurting the bottom line,” she explains.

Ton, who is also the president of the Good Jobs Institute, argues that when employees are viewed purely as a cost, companies can quickly descend into a vicious cycle that sees employees treated poorly, which leads to high attrition rates, which makes it harder for those who remain, and so on.

A systems problem

By contrast, when employees are treated better, they not only tend to stay for longer but also deliver better service to the organization. For instance, Ton highlights how worries over making ends meet can not only result in higher employee turnover but also reduce the performance of employees who are stressed out by the numerous issues caused by low pay.

As a result, this combination of high employee turnover and low performance can prove far more expensive for organizations than paying employees well and giving them the conditions required to thrive.

She reminds us, however, that tackling the problem isn’t just a case of raising pay, but is instead something that requires a systemic examination of how employees are treated. This so-called “good jobs system” comprises 4 key parts:

• Focus and simplify – Ton explains that in many organizations leaders make decisions that sometimes filter down to the rest of the workforce (but oftentimes do not). These decisions can often over-complicate the work people are required to do. For instance, schedules can often be decided at the last minute and are uncoordinated, which makes working successfully that much harder and more stressful. The aim should be to simplify such that only things that add value to the customer are performed and low-valued-add activities are removed.
• Standardize and empower – Many companies that undervalue employees operate a command-and-control culture. This can result in a proliferation of rules and information typically only flowing upward. A more enlightened approach is to “leverage frontline ability, knowledge, and time to serve the customer well and pursue bottom-up continuous improvement.”
• Cross-train – Ever since Adam Smith highlighted the power of specialization, there has been a temptation to limit what people do to as narrow a task as possible. Ton argues that a more motivational and fulfilling approach is to cross-train employees so they can perform both customer-facing and non-customer-facing tasks.
• Operate with slack – This is perhaps the most important element and something I’ve written about in the past. Many managers believe that the best way to run their teams is to have no wastage or slack at all. In such an environment, not only do innovation and creativity suffer, but burnout rises and mistakes and poor customer service are often tolerated in the mission to keep costs down. Ton believes that the best teams have slack built in so that employees aren’t forced to rush encounters with customers and burnout doesn’t contribute to higher turnover.

Ton reminds us that not only is a system that encourages a high turnover of people inhumane, but it’s also extremely uncompetitive. She explains that in the work done by the Good Jobs Institute with organizations, executives seldom believe that the high cost of turnover is sufficient to justify higher pay and working conditions for employees.

That this happens despite so many organizations pledging to invest in their people and stating appreciation for the importance of their workforce to their overall success shows how embedded the mindset often is. With talent likely to be in increasingly short supply in the years ahead, it’s a mindset that urgently needs to change so that all jobs are good jobs.