Guest Blog: Frontline Employees Are Expendable

photo credit: krytofr

Today, a guest post from one of our board members, Mel Kleiman. We’ve written before about the increasing trend toward replacing customer service professionals with self service options. Mel muses here where that path leads. A modest proposal, a la Jonathan Swift

Unless your Unique Selling Proposition (USP) or point of difference is Exceptional Customer Service (like Nordstrom, BMW, Ritz Carlton, and the Container Store), there’s no reason to sweat it when you lose frontline employees. Most likely, they were not that good anyway because, truth be told, you haven’t invested a lot of money in your hourly hires and even the training you provided, if any, didn’t cost much. In fact, their replacements will probably be just as good and may be even better than those you lose. New employees are excited about their new jobs and will probably have a better attitude and try harder – at least for the first three-to-six months. On top of this, employee turnover will probably reduce your labor costs because you won’t have to fund any benefit programs for a while. And there’s no need to worry if the new hire doesn’t know very much because the customers don’t expect them to know much when customer service is not your USP. You may even want to have new people wear a button that says: “I’m new. Please help me help you.”

Customers are expecting less and putting up with more in large part because automation has taken a lot of the service out of customer service. Voice mail and automatic attendants have eliminated the need for most phone operators and receptionists. Voice recognition software has reached the stage that it can direct your customer to the proper self-service option or you can send them to your website to look up the answer for themselves. Pay at the pump, self service gas has replaced the need for station attendants. And how about self-service checkout at grocery and retail outlets? Then we have touch screen ordering, self-service check in when you travel – not only with the airlines, but also for your hotel room. (If they could only get you to make your own bed!) These self-service options are often faster and the machine always says “thank you.” Production jobs are being performed by robots and no one does repair work any longer because we don’t get things fixed any longer, we just replace them.

The list could go on and on. Today, a few great workers can do as much as what a lot of average workers used to do. Just remember that those few workers better be great because by the time your customer gets to talk to or deal with a real human being, he or she is going to be so mad and frustrated that it will take a Herculean effort to defuse the situation and keep them from going to the competition. The Bureau of Labor Statistics says by 2010 we are going to be more than 10,000,000 workers short in this country. Don’t believe them. In 2000, they said by 2007 we would be 5,000,000 workers short and we still have about 4.6% unemployment in this country because they did not factor in the jobs that technology would replace.

Things have come full circle since the start of the Industrial Revolution and, in today’s world, frontline workers are once again replaceable cogs in a giant wheel.

Mel Kleiman CSp President of Humetrics.

6 thoughts on “Guest Blog: Frontline Employees Are Expendable

  1. And so what ever did happen to those operators and gas attendants. That were all dropped in favor of the all mights dollar. Capitalism.
    Production jobs are being performed by robots and no one does repair work any longer because we don’t get things fixed any longer, we just replace them.
    Sad to see us go.

  2. Ed Lawler touches on this topic in his recent book “Talent” (see page 19). To paraphrase Lawler, if company’s treat hourly employees as expendable and seek to keep investment in frontline staff to an absolute minimum they may see the following outcomes:
    1. Higher turnover costs. Even if people are easily replaceable, it still costs money to replace them.
    2. Higher rates of absenteeism. Which may also require companies to overstaff positions since employees who are treated as expendable don’t care as much about calling in advance to say they aren’t coming to work since they don’t really care about getting fired.
    3. Counterproductivity related to a sense of entitlement (they don’t pay me enough, so I deserve a little extra).
    4. Greater threat of unionization. Its easier to unionize workforces if employees feel grossly underpaid and exploited.
    5. Low quality of applicants. If you treat employees as expendable you may end up being a company that has to hire the people who can’t get jobs anywhere else. Sort of a “place of last refuge” for lousy employees.

    As a friend once said, “employees may be your biggest asset, but the wrong employees can be your biggest liability”. Companies would do well to remember this – I know of one company that lost over $1 million dollars in hard inventory due to hiring a single bad hourly employee.

  3. yes and i agree: “employees may be your biggest asset, but the wrong employees can be your biggest liability”..
    thanks, interesting article, nice site!

  4. Please answer my questions and mail me. This is for the purpose of research. I wil be thankful for your kind support.

    COMPENSATION Management

    Questionnaire to Managers

    1. What is the basis of compensation in your organization?
    a. Merit b. Seniority c. Both merit & Seniority d. others. ( )
    2. Is compensation for your employees fixed or variable?
    a.Fixed b. Variable. ( )
    3 What is the percentage of variable component of Salary of your employees?
    10% to 20% b. 20% to 30% c. 30% to 40% d. above 40%. ( )
    4. Which of the following non – monetary benefits provided by your organization
    to employees is linked to performance?
    a. Club membership b. paid holidays c. E Sops d. Certificate of Recognition ( )
    5. Have your organization ever faced of complaint from employees that top management’s compensation is highly disproportional to company ‘s performance?
    a.Yes b. No c. Can’t say. ( )
    6. What is the percentage of temporary staff among total Number of employees working in your organization? ( )
    a. 0% to 5% b. 6% to 10% c. 11% to 15% d. 16% to 20%
    7. In your organization does an employee’s compensation depend on the performance of team of which he is a member? ( )
    a. To a huge extent (10% -30%) b. To a certain content (5% – 10%)c. to a less extent
    (< 5%) d. Completely independent (0%).
    8. What is the percentage of employee turnover that happens due to huge hike offered by competitors ? ( )
    a. 5% to 10% b. 10% to 15% c. 15% to 20% d. Above 20%
    9. How frequently does your organization retain employees by making counter offer for hike in compensation ?
    a. always b. very frequently c. some times d. never. ( )
    10. Which of the following factors is given more weight age while revising pay
    structures ? ( )
    a. Competitors pay structures b. job attributes c. employee contributions d. others.
    11.Which of the following pay systems do you adopt?
    a. Person formed pay b. Job based pay c. Can’t say. ( )
    12. The fundamental principal for building, internally consistent compensation system is jobs that require higher qualification, more responsibility and more complex job duties, should be paid more than jobs that require lower qualification , fewer responsibilities and less complex job duties. Do you have internally consistent compensation systems in your organization?
    a. Yes b. No. c Can’t say. ( )

    13. Which of the following is part of your compensation package ? ( )
    i. Profit sharing ii. Knowledge/ skill based pay iii. Pay based on individual performance
    iv. pay based on Team performance v. pay based on customers satisfaction vi. Pay based on seniority/ job tenure vii. Pay based on job attribute.
    a. More than one of the above b. more than two of the above c. more than three of the above d. more than four of the above.
    14. Which of the following is part of our benefits? ( )
    i. Stock ownership in the organization ii. Retirement plan iii. Major medical insurance plan. iv. Life insurance v. Disability insurance vi. Flexible working hours vii. day care
    a. More than one of the above b. more than two of the above c. more than three of the above d. none of the above.
    15. Some companies are linking certain employee benefits (which were earlier provided
    un conditionally) to employee performance. Do you think it is a healthy practice ?
    Justify your answer.
    a. yes. B. No c. Can’t say. ( )
    16. Which of the following are the benefits offered by your organization to expatriates?
    i. Foreign service premium ii. Relocation assistance iii. Educational reimbursement for expatriates’ children iv. Home leave and travel reimbursement ( )
    a. one of the above b. two of the above c. three of the above d. all the above.
    17. How are employee benefits being managed by your organization?
    a) Managing on own b) outsourcing ( )
    18. Which of the following methods do you adopt to manage employee compensation during times of economic crisis?
    a) Reduction in salaries b) withdrawing benefits like monthly allowances for parties, paid holidays, club memberships, etc.
    c) Inviting employees for suggestions regarding cost cutting techniques and link incentives to quality suggestions
    d) Reducing the percentage of salary hikes and new recruitments ( )
    19. The external competitiveness of a company’s compensation strategy refers to the organinization’s pay relative to its competitors. The external competitiveness is determined by organization’s ability to attract and retain employees. How would you rate your organization’s external competitiveness of compensation strategy?
    a) Excellent b) Good c) Average d) Poor ( )
    20. Is your organization’s compensation system aligned with its business strategy?
    a) Yes b) No c) Can’t say ( )
    21. How would You rate your organization’s compensation system in terms of transparency and fairness?
    a) Excellent b) Good c) Average d) Poor ( )
    22. Does your compensation strategy differentiate your organization from its competitors?
    a) Yes b) No c) Can’t say ( )
    23. Does your compensation strategy add value to your organization in terms of ROI (Return on Investment)?
    a) Yes b) No c) Neutral d) Can’t say ( )
    24. To what extent do you think your compensation system satisfies your employees?
    a) 50% to 60% b) 60% to 70% c) 80%-90% d) 90%-100% ( )
    25. What are the challenges faced by your organization in compensation management?

    26. What are the measures taken by you in the times of economic crisis to deal with problems in compensation management?

    Questionnaire to Employees
    1. What is the extent to which you are satisfied with the compensation strategy of your organization?
    a) Below 50% b) 51% – 65% c) 66% – 80% d) above 80% ( )
    2. Does the compensation strategy of your organization motivate you to work hard and achieve higher goals?
    a) Yes b) No c) can’t say ( )
    3. What is the basis of compensation in your organization?
    a) Merit b) Seniority c) Both Merit and seniority d) others ( )
    4. In which of the following forms Is your compensation package?
    a) Fixed b) Variable
    c) Major component is fixed d) Major component is variable ( )
    5. What is the percentage of variable component of your salary?
    a) 10 – 20% b) 20% – 30% c) 30% – 40% d) above 40% ( )
    6. Which of the following types of compensation motivates you?
    a) compensation based on individual productivity b) compensation based on team performance c) compensation based on organizational performance d) others ( )
    7. Which of the following non-monetary benefits provided by your organization is linked to performance?
    a) Club membership b) Paid holidays c) ESOPS
    d) all the above e) None of the above ( )
    8. Do you feel that top management compensation in your organization is too high and disproportional to company’s performance?
    a) yes b) No c) Can’t say ( )
    9. Do you think your company has a unique compensation strategy that attracts new employees and retains existing employees?
    a) Yes b) No c) Can’t say ( )
    10. Do you have any suggestions for your company to improve its compensation management?

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