Updated: Oct 17, 2020
Story: Sravanthi, TL
Having been from a family business, I have had a lot of exposure to understand the nuances of business and its handling. Even though I learned many lessons from my family business, one specific instance brought about a great impact on my life.
Our family business deals with the distribution of borewell pipes. They are very heavy in size and volume and so require laborers who carry the pipes to load and unload on trucks. Typically, as per the standard, to unload each pipe a laborer charges Rs. 3.
As a budding businessman, we were in a cash crunch for many years and so saving each and every penny was really important. Even though we were paying as per the standard charges, the laborers were not showing much interest in loading and unloading pipes, because of a lot of work options. So, it used to be a big hurdle for us to hire different laborers every day. Much of the time was spent on hiring and convincing them for the work, in turn, wasting a lot of energy and time for expanding other business opportunities. Sometimes, we had to carry pipes ourselves if no one was available.
After some time, we increased our payment charges to Rs. 4.5, in spite of being in cash crunch situations. This enticed the laborers so much that they were in the queue to be associated with us. So much interest they showed that people were always ready to work for us. In a way, we could carry this business without any hassles and focus more on other options
The above instance might look very simple. But I observed a similar situation in many budding companies. They implement a lot of cost-cutting strategies just to increase their profit margins, sometimes without understanding the indirect effects.
The companies bargain a lot in terms of giving employees what they expect. Also, they show a lot of compromises in meeting the training needs, giving the right resources. Even though companies look at this as a strategy to minimize their costs and increase their profit margins, they do not see the opportunities they lose.
A)They lose a lot of talent pool who are vexed by these cost-cutting methods.
B)They have to spend a lot of time and energy convincing employees in implementing those cost-cutting measures. Further, they point out many illogical reasons to prove their points, which becomes detrimental to employee satisfaction and motivation.
C)They lose a lot of business opportunities and ideas, which might not have been discussed.
Overall, my suggestion to corporates and managers is that they focus on the needs of employees, keep them satisfied, and make sure they are getting good returns in the long run.