How Hiring Makes Uniqlo a Success: More is More


I discovered the Japanese fashion chain Uniqlo from walking by the retailer's store on 34th Street in New York City. The windows got my attention because they reminded me of what Benetton stores used to be — colorful and fun — and all mannequins were wearing Moon Boots (it was winter).

Made by Italian sports firm Tecnica, Moon Boots were all the rage when I was little. I still have mine, albeit they are in need of replacement — they were the white and blue model.

The article in the New Yorker caught my attention because it talks about the company's hiring practices:

When the company opened its flagship Fifth Avenue store, last fall, it hired six hundred and fifty people, and pledged to have four hundred people working there at any one time. This is not the way most retailers do business.

More is not typically how companies, especially retailers, think about human capital. The article cites a Harvard Business Review study by MIT Zeynep Ton about why good jobs are good for retailers, where the hiring practices of Trader Joe’s, among others, were analyzed and found that they are more profitable than most of their competitors.

These stores have more sales per employee and per square foot.

The articles cites another study published at the Wharton School, by Marshall Fisher, Jayanth Krishnan, and Serguei Netessine. They looked at detailed sales data from a retailer with more than five hundred stores.

They found that every dollar in additional payroll led to somewhere between four and twenty-eight dollars in new sales.

It turns out that being able to find products is helpful. I cannot count the number of times I was in a store and needed to ask a product question and either I couldn't find anyone to ask, or the staff didn't know the answer.

We spend and invest in what we value.

Remember Circuit City, don't make the same mistake. Get your people side of the business right.


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