Apple Stores get their turn under NY Times' investigative spotlight

A just-published Times report on pay and conditions at Apple Stores has at least one news outlet wondering if recent Apple activity around salary increases was meant as a kind of preemptive strike.

Apple employees in 2010, preparing for the launch of the iPhone 4 at Apple's flagship store in San Francisco. James Martin/CNET

Was recent Apple activity around raises at its retail stores a preemptive strike against a just-published New York Times article?

That's what The Los Angeles Times is wondering aloud today.

The extensive New York Times piece, which hit the Internet today bearing the headline "Apple's Retail Army, Long on Loyalty but Short on Pay," looks at what workers at the stores make relative to their commission-earning dopplegangers at carriers such as Verizon. It also speaks of hectic working conditions and shifts with no breaks, and gives a peek at what some might call the lightly cultish atmosphere at employee training sessions. And it considers why the twentysomethings that clamor for jobs at Apple Stores are so enthusiastic about the retail positions (many, the NYT says, are Apple adherents to begin with, and many are won over by the sense of purpose instilled at the training sessions -- which emphasize that Apple's sales corps. isn't selling; they're helping people improve their lives).

The NYT -- which since the beginning of the year has shone a spotlight on various aspects of Apple, from its offshoring of manufacturing to conditions at supplier factories to the company's strategies to reduce its taxes -- says Apple started handing out substantial raises to some employees last week, several months after the paper began asking around about the situation at Apple Stores:

Even Apple, it seems, has recently decided it needs to pay its workers more. Last week, four months after The New York Times first began inquiring about the wages of its store employees, the company started to inform some staff members that they would receive substantial raises. An Apple spokesman confirmed the raises but would not discuss their size, timing or impetus, nor who would earn them.

But Cory Moll, a salesman in the San Francisco flagship store and a vocal labor activist, said that on Tuesday he was given a raise of $2.82 an hour, to $17.31, an increase of 19.5 percent and a big jump compared with the 49-cent raise he was given last year.

"My manager called me into his office and said, 'Apple wants to show that it cares about its workers, and show that it knows how much value you add to the company, by offering a bigger raise than in previous years,' " Mr. Moll recalled.

Blog 9to5 Mac also reported in late May that Apple was tweaking its raise schedule and delivering increases a few months early -- at the end of this month rather than on September 30.

Of course, none of this proves Apple's actions were influenced by knowledge of the New York Times piece. In fact, one of the things the LA Times mentions -- that Apple Store employees can now get $500 off Macs and $250 off iPads -- was something promised by Apple CEO Tim Cook back in January , which would seem to be before the NYT began gathering material for its article.

We contacted Apple for comment on both the New York and LA Times articles and were referred to the company's statement in the NYT piece -- in addition to noting an Apple representative's confirmation of recent raises, the paper wrote the following:

Internal surveys at stores have also found surprising dissatisfaction levels, particularly among technicians, or "geniuses" in Apple's parlance, who work at what is called the Genius Bar. Apple declined requests for interviews for this article. Instead, the company issued a statement:

"Thousands of incredibly talented professionals work behind the Genius Bar and deliver the best customer service in the world. The annual retention rate for Geniuses is almost 90%, which is unheard-of in the retail industry, and shows how passionate they are about their customers and their careers at Apple."

The six pages of the NYT piece are well worth a read for those interested. A few more tidbits:

Last year, the company's 327 global stores took in more money per square foot than any other United States retailer -- wireless or otherwise -- and almost double that of Tiffany, which was No. 2 on the list, according to the research firm RetailSails...

About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year...

By the standards of retailing, Apple offers above average pay -- well above the minimum wage of $7.25 and better than the Gap, though slightly less than Lululemon, the yoga and athletic apparel chain, where sales staff earn about $12 an hour. The company also offers very good benefits for a retailer, including health care, 401(k) contributions and the chance to buy company stock, as well as Apple products, at a discount.

If there is a secret to Apple's sauce, this is it: the company ennobles employees. It understands that a lot of people will forgo money if they have a sense of higher purpose.... That empowerment is important because aspiring sales employees would clearly be better off working at one of the country's other big sellers of Apple products, AT&T and Verizon Wireless, if they were searching for a hefty paycheck.

...so many people wanted to work at the stores that [Ron] Johnson [former VP of retail at Apple] would compare applicants-to-openings ratios and boast that it was harder to land a job at an Apple Store than to get into Stanford, his alma mater.

Training commences with what is known as a "warm welcome." As new employees enter the room, Apple managers and trainers give them a standing ovation. The clapping often bewilders the trainees, at least at first, but when the applause goes on for several lengthy minutes they eventually join in... "My hands would sting from all the clapping," says Michael Dow, who trained Apple employees for years in Providence, R.I.

In case you missed the link the first time around, you can read the NYT piece in its entirety here.

Update, 4:45 p.m. PT: Adds Apple comment to NYT about the retention rate for "geniuses" at Apple Stores.

Update, 5:00 p.m. PT: Adds Apple's response to our request for comment. Also adds language about "hectic working conditions."

 

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