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There is something for sure going wrong with many Companies. I and my company reps have in the last couple of years received worsening customer service at Hertz car rental facilities. We seem to have to wait longer in 100 degree or over temps as we check in the vehicles, and longer lines and time wasted whenever we have to rent cars. There seems to be a lesser CSR’s presense in a daily base, or even available cars for rent these days. Many Hertz regulars and others have now been forced to go elsewhere for car rentals.
At the DFW Airport facility there has been instances where there isn’t any gate security. People have been literally walking in and taking free rentals. So many expensive high end cars have gone missing it’s a joke, ...what I am told. I dont see why this company and others are willing to lose so much by not hiring.
By the way, these traits are continuing regardless of the big profits many companies have made recently. Its one thing cutting back on expenditure to save cost, but when business picks up, you just may have to increase expenditure to buy or even use a robot to keep up with demand. It’s also a pain in the butt when you have to deal with an automated machine, or a person somewhere in a foreign land that you can barely communicate with; All this in the name of saving costs.
This reminds me of many third world countries where customer service is minimal, if any. Except third world countries also have corrupt officials who hire so called ghost workers (people that are listed in pay-roll but are not really there). And on pay day the officials get to keep the ghost workers pay…
What you are describing is typical operating procedure when accountants have the ear of the board of directors and operations is forced to operate on a shoestring. I have seen it WAY too many times.
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.
Once revenues start falling because of the loss of good will, the accountants just see that as a reason to cut staffing even more. It really gets insane at that point.
There are a few possible outcomes -
The BOD suffers a shakeup and the accountants get slapped back into place.
The locations are abandoned or sold.
The company goes belly up.
Sometimes, when a location is sold or abandoned, a new company can enter the market and make it work under a new name. At other times, the physical location is poisoned, and customers will avoid it no matter what changes are made.
There was once a countryman who had a pet Goose that laid eggs. The man would go to the nest every morning, collect the eggs and sell them at the market place, thus making his daily living.
One morning, a shiny, yellow egg appeared in the nest among the white.
"This is a trick!" said the man on finding the strange egg. He was sure that someone had tried to cheat him. The egg was heavy as lead and hard to crack. He was about to throw it away, but thought again that it might be a very precious metal. "It is gold – I'm rich!" said the man delighted now at his discovery.
The magical pet laid a golden egg everyday while the simple countryman grew rich selling the precious eggs he collected. But in growing rich he also became very greedy.
He thought, "If I cut up the Goose I will collect all the eggs at once and make my fortune in one swoop."
And that is exactly what he did, only to find that not only were there no golden eggs in store, but the bird was now dead and unable to lay a single golden egg for him from then on.
Harry and BigD are correct, the biggest expense of any business is payroll. It's the easiest to cut when necessary.
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