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The “Secret” to Profitability Through Your Staff Unveiled!!! (Part 2) It’s a Matter of FIT™ !!!

(Article #2 is a series of articles looking at how to control labor costs)

Volume 2--Issue 2, January 18, 2008

The #1 Labor Cost Waster

The #1 way to save money is to only buy what you most definitely need (not just what you want). The #1 way to control labor costs is to only hire people that FIT the needs of the particular job (not just appear to or seem to meet the needs of that job)! The issue and answer are the same, how to determine FIT!

Symptoms of Labor Cost Waste

Organizations create ambiguity, tension, conflict, stress, awkward group dynamics, ineffective cultures and waste incredible amounts of money, time and opportunities for profitability by hiring people who do not FIT. They frequently hire the “best athlete” and not the “best athlete for the job.” For example, Michael Jordan is arguably the best basketball professional of all time. But, Mr. Jordan was not a good FIT as a professional baseball player.

Organizations experience a large number of labor cost waste symptoms.

  • Ambiguity occurs because organizations do not effectively define the tasks staff need to do and leave those decisions to the staff who are naturally unsure of what to do. Job descriptions frequently don’t help because they are notoriously outdated and inaccurate.
  • Tension results when staff take inappropriate actions.
  • Conflict occurs when two or more staff believe different actions are to be taken or when there is a difference in opinion, across staff, of the behaviors they are expected to take or do take.
  • Stress is just the result of ambiguity, tension, and/or conflicts in the workplace.

All of these are symptoms related to inappropriate FIT of behaviors, values/motives, and/or interpersonal skills that are required for that particular job. They all lead to excessive and wasteful labor costs.

We multiply the impact of the above when having ambiguity, tension, conflict, and/or stress within a team or group of people. That outcome is frequently a

  • culture for poor performance, and,
  • out of control labor costs

that even more significantly negatively impact profitability.

The Cure For Out Of Control Labor Costs

Organizations spend billions of dollars each year to hire new staff, train new and current staff, and to lay off unprofitable staff. They hire people who perform the wrong behaviors, have the wrong values or motives, and/or have the wrong interpersonal skills needed for THAT particular job. How much money would your organization save OR how much more money would your organization make if they had from the very start the right people in the right job that promote the right organizational culture and meet the right team needs?

The cure to control labor costs is to benchmark or identify the behaviors, values/motives, and interpersonal skills needed for THAT position and then hire people who FIT those needs. Once you do that, people do the right things naturally because it is already a part of them.

Actions To Take To Cure Out of Control Labor Costs

If the answer is so obvious, why don’t organizations benchmark? Until recently effective and cost efficient technology to develop quality benchmarks did not exist. That technology, the process to use that technology, and the tools to use that technology are now available. Effective and accurate benchmarking is still not easy. It requires a great deal of skill and honest analysis. But it is a “magic pill” when the diagnoses, analyzes, and implementation is accomplished by a skilled professional.

Benchmarking is so powerful, it can be used

  • to hire the right person who FITs a particular job, and the same results can be used to,
  • train current staff on the specific behaviors and interpersonal skills they can improve or change to be more effective in their current job.

The results of benchmarking can be monumental and the impact on profitability impressive. In Part 3 of our series we give a set of rules to use for effective benchmarking.

Part 3 In Our Series

In the next article “The ‘Secret’ to Profitability Through Your Staff Is Effective Benchmarking” we examine the essential elements of a quality benchmark and an incredibly useful and cost effective technique to use to guarantee both types of FIT; hiring benchmarks and management for enhanced productivity benchmarks.