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How Employment Policies Impact Your Reputation

By Logan Chierotti | Small Business

WalMart is currently taking some heat over a decision to enact a new dress code, which some employees say they can’t afford on their pauper’s salaries. You may think this is just another scheme on WalMart’s part to draw in $50 to $100 million on employee polo shirt sales. Or you may be of the opinion that all jobs have dress codes, and this is nothing to scream about.

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I’m not going to comment on this aspect of the debate.

Instead, I’m going to point out that this is precisely the sort of press that WalMart does not need. The store is already suffering from reduced profits and sinking stock prices. Their sales are down, in part, because of serious reputation issues swirling around the issue of how the store treats its employees. Over the years WalMart has been at the center of a litany of labor controversies, from sexism to their practice of handing out welfare application packets right along with their W4s. The image of the Walton family as a pack of greedy, uncaring, out-of-touch fat cats who screw over the very demographics they’re trying to serve, and doing so at taxpayer expense, is a tough one to shake. This dress code issue is just another nail in that coffin.

Meanwhile, competitor Costco enjoys record profits and increased brand loyalty, in part because they pay and treat their employees well. They know that their target demographic consists of people who are much like the people they hire. These customers want to see that people who are like them are treated well by the companies they choose to support. Costco also knows that happier employees generally give better service. They enjoy reduced turnover rates. Employees shop in their stores, too, further bolstering the bottom line.

Once, an employer’s treatment of its workforce might not have made a huge impact on the reputation front, save for the ways that this treatment translated into customer service issues. Two big factors are creating today’s very different climate.

The first factor is the mood of the media. These days everyone is paying a lot more attention to labor issues, the disappearance of the middle class and the shrinking pools of good American jobs. The media is happy to leap on any perception of employer-wrongdoing, because they know that such stories do generate reader interest.

The second is the rise of anonymous employee review sites like Glassdoor.com and Indeed.com. Employees now have ample platforms to tell their stories without fear of reprisal. A bad reputation on one of these sites can serve to drive away top talent. It will also factor into the shopping decisions of those who care deeply about such issues. Finally, the dearth of top talent will mean that a business has a harder time delivering an outstanding customer experience, which means more bad reviews: this time from shoppers.

WalMart is a monolith, and it has had a bad reputation for a long time. The Waltons probably think they can afford to take the heat. But most businesses will not have that luxury. Sticking it to employees may seem cost-effective in the short term, but ultimately, it’s going to be more trouble than it’s worth.

This article was syndicated from Business 2 Community: How Employment Policies Impact Your Reputation

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