It’s Not Just a Matter of Perspective

January 10, 2011

Usually when entrepreneurs start a business, they’re careful when it comes to expanding and appointing new employees, everything is risky, money is probably tight, but the workload is becoming too much, how do they decide when to employ someone else. Friends and families often help out to start, but eventually these favours can no longer be asked, so the entrepreneur has to take that next step. They look at all the stuff the new employee can help with, they check they have enough revenue to employ them and they go for it. They continue to do this until that ideal nirvana state is reached, when the company is so large or is growing at a rate that hiring new employees becomes an almost automated and necessary requirement.

But then something happens, usually brought on by external market forces, ie a downturn in the market, a merger between companies, or the orginal company founders no longer have the same vision or are so removed from the day to day running of the business that their ethos has been lost within the structure of “The Company”.

This is when employees and customers are no longer viewed as assets or investments, people that can expand and drive the company forward, instead they become a cost, a cash cow, an overhead that needs to be streamlined and made as efficient as possible. When this mindset takes place (it doesn’t happen over night), companies are on shaky ground, in the long run productivity actually drops as employee morale reaches new lows, employee churn increases as employees loyalty decreases so they leave and HR costs increase. The share price can drop too, as the company Brand can be damaged through employee/customer dissatisfaction being aired online, through strikes and walkouts or felt via customer/employee interaction.

While a company that never loses sight that without their employees and customers, they wouldn’t have a business, they respect and continue to invest in them through training and career advancement, engage them in decisions and make them integral parts of the business, recruitment and HR costs lessen as people want to work at these places (who wouldn’t), customer Brand loyalty increases as employee/customer engagement is positive… these companies will continue to thrive, even if the market turns against them, as their employees/customers are incredibly loyal and stick with the company through the hard times.

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