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The way it works is a location is allotted a budget, with personnel being considered as a variable expense, vs. real estate, which is a fixed expense. When trying to wring out profits, the variable expenses are cut for short term gain. The local managers can make it work for a while, which encourages even more cuts, to the point that customer service suffers and the "good will" is lost.
In essence it’s an acute failure of many companies self discipline and morals. This is a trend that was set in motion by Private Equity Firms. Now, unfortunately, the illness has spread through out the cooperate world around here. When asked why they don’t hire they say it’s the economy that makes them jittery. To me, its pure GLUTTONY that makes them unable to hire.
This is something that needs to be debated seriously guys...
Last edited by Swordfish; 08-29-2010 at 12:01 AM..
Reason: typo
Labor is indeed a deceptively-simple ledger item to "cut."
And as noted by others, the failure of this strategy often won't show up right away. This is similar to telling your heart to pump twice as much blood than it had been pumping before. At first, your heart will probably manage to fight through the strain and keep your blood flowing as smoothly as possible. The equivalent of increased overtime, workers taking on more roles - even roles they are not trained for - and so on.
This false normalcy gives management an impression of success, which seems to "vindicate" their strategy.
But as the months grind on, the strain keeps accumulating, until parts start breaking, or stop functioning altogether. Calls that used to be answered right away might go to a machine and get answered in a few hours, days, or never. Invoices that used to be filed and ledgered immediately get tossed in a pile and forgotten.
Sometimes, the remaining employees come to the conclusion that they simply cannot manage their workload/customer volume, and actually seek to reduce it - shooing away new customers, pulling back on services offered, and retreating to a more-defensible position.
The real calamity happens afterwards when a business draws the wrong lessons from the whole affair. "We must not have cut deeply enough." "We must have hired lazy employees." And so the issue persists.
Today you need good employees more than they need you. As Wally Doolin, chief executive of TGI Friday's parent, Carlson Restaurants Worldwide, pointed out at the recent Multi-Unit Foodservice Operators confab: "Our employees are our first market." Amen. So instead of ranking relationships between customers and employees, we should focus on establishing equity instead. In other words, never treat a customer better than you do an employee. Service, like charity, begins at home, and if you're not investing in serving your team as well as you serves your customers, you're headed for trouble, pure and simple.
Today you need good employees more than they need you. As Wally Doolin, chief executive of TGI Friday's parent, Carlson Restaurants Worldwide, pointed out at the recent Multi-Unit Foodservice Operators confab: "Our employees are our first market." Amen. So instead of ranking relationships between customers and employees, we should focus on establishing equity instead. In other words, never treat a customer better than you do an employee. Service, like charity, begins at home, and if you're not investing in serving your team as well as you serves your customers, you're headed for trouble, pure and simple.
I wish my company's corporate overlords thought like you do. I work at the corporate HQ of a fairly well-known company and they treat us like dirt.
Today you need good employees more than they need you. As Wally Doolin, chief executive of TGI Friday's parent, Carlson Restaurants Worldwide, pointed out at the recent Multi-Unit Foodservice Operators confab: "Our employees are our first market." Amen. So instead of ranking relationships between customers and employees, we should focus on establishing equity instead. In other words, never treat a customer better than you do an employee. Service, like charity, begins at home, and if you're not investing in serving your team as well as you serves your customers, you're headed for trouble, pure and simple.
This is the same philosophy Tony Hsieh of Zappos.com utilizes. Company culture is tremendously powerful. Happy employees can greatly help a business. Miserable employees will drag a company into its own grave. The fundamental issue, and why more companies do not focus on company culture, is because you sacrifice short-term gains for long-term results, which happens to be something most shareholders do not want to accommodate. Hsieh took heat for it from his own investors, and at one point was on the verge of losing his position as CEO. Wall Street and venture capitalists are the absolute causes of a number of problems faced by Corporate America.
Last edited by BE in HHI; 08-30-2010 at 09:12 AM..
This is the same philosophy Tony Hsieh of Zappos.com utilizes. Company culture is tremendously powerful. Happy employees can greatly help a business. Miserable employees will drag a company into its own grave. The fundamental issue, and why more companies do not focus on company culture, is because you sacrifice short-term gains for long-term results, which happens to be something most shareholders do not want to accommodate. Hsieh took heat for it from his own investors, and at one point was on the verge of losing his position as CEO. Wall Street and venture capitalists are the absolute causes of a number of problems faced by Corporate America.
The company I work for believes in miserable employees.
I love doing business with companies with happy employees. It is such a different experience. For example, I will actually pay a bit more to shop at the Container Store, for example, because the stores are so well-organized and the employees are not only cheerful and enthusiastic but actually know how to help you with organization difficulties and can recommend products you might not have thought of. It's great.
Their corporate HQ is based here in DFW and I check frequently to see if they're hiring...I'd love to work there.
First I have to say wow. It is so refreshing to hear this thread. From from customer service side of the fence. I worked for a fortune 500 company that for a few years was awesome. Onsite cafe, awesome training. The systems sucked and we had a T1 line. Then the CEO changed, we were making tons of money. I did sales and the first year all I said was what credit card do you want to put that on. Then we learned SPIN I love that process. My return rate was less than 2% quarter over quarter. After the new CEO came in things changed. The outsourcing began. It started in customer service. Imagine this customer who bought from an american who knew what they were talking about 2 years ago now calls and can't understand the agent. Sales really got clobbered, we had a lot of really ticked off customers. They wouldn't listen to the customers, more and more got out sourced. I was told to outsource my job. I created 3 guys to do my job, I mentored them for 2 years, then I was told to let go of it. The job I built and loved to go to everyday. I was told to take escalations. These were the big ones that went to the CEO or some other Big Cheese. I got to talk these people. First, most of these customers were amazed that someone was calling them back. I would fix the issue. I had survived 6 layoffs and then I was impacted. It was not due to a layoff. It was due to a decision I made for a customer. Thank god a former boss I had who was effected in one of those lay offs hired me at the company he was a director at. I blew through my entire 401k trying to get some schooling. Only to find out that because I am 50 years old I won't even be looked at because of my age or the fact I live out of state. This company that I work for doesn't give a crap about the employees. They have no reporting, and that drives me insane. I feel like a machine, but my customer still receives world class customer service. It is the only thing keeping me sane. I am still going to school and will graduate in a couple months. I am actively looking for work out of state, and that is futile at this point. If you guys would change corporate mind set that would grow confidence. The average Joe out there is just trying to support themselves and when the CEO is getting a 25 million dollar bonus it is really hard to do your best for someone who doesn't appreciate where the real work is done.
Sorry I did ramble a bit.
Your average Joe.
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