Pay peanuts, get monkeys

Last weekend I had lunch with my daughter at a large café here in Auckland. It was very busy and buzzing with activity. The first thing I noticed before being seated was the plethora of staff. There must have been about 10 people running and tripping over each other. My confidence at receiving a pleasant dining experience soon faded when I noticed all of these people appeared to be high school students (yes, I’m in danger of stereotyping here, but hang in there with me).

We were seated promptly; however, that was where the service ended. It was amazing to watch each individual perform one duty at a time – not a multi-tasker amongst them! For example, several times a waiter or waitress passed our table to attend others and on the return to the kitchen never thought for a moment to pick up our empty plates, ask if we enjoyed our meal, and most importantly, try to up-sell us into dessert, coffee or more wine.

My daughter wanted dessert and I could have squeezed down another wine. After another long wait and no hint of being attended to, I said, “Lets settle up and go down the road to get you that ice-cream” – they lost an easy $20 – God knows how many times that has happened in that establishment – and hundreds of other across the country!

The above is a common scenario in the hospitality and retail industry; the penny pinching practice of hiring by the lowest hourly rate rather than for efficiency, initiative and increased profit. From my humble observation, the above cafe could have hired five competent people, paid them, say 50% more and made more money with additional up-sell. Not to mention highly satisfied customers, leading to increased patronage through free word-of-mouth advertising.

My sister has personal experience in this area. She took over a position as maitre d’ at a winery restaurant. At the time they had 11 staff. She managed to dispense with seven of these people leaving her and two other highly competent people to drive much better customer service and profits. Yes, the establishment did pay more money for individual labour, but less than the previous outlay for the “cricket team” of bimbos. And here’s the rub, profits jumped 33%!

My point. In today’s environment, finding cheap labour is easy, but ensuring they “fit” the job is the critical challenge. It is very tempting to shortcut selection processes in times of over-supply, to fall back on old ways and rely on good old gut feel.

Now is the time to ensure you have a disciplined hiring system, one that ensures you are diligent and have a structure process. It is false economy to think you are saving money by hiring people who will work for the lowest rate. There’s a lot of truth in the old saying, “Pay peanuts, get monkeys”. The British business psychologist had it right by advocating we cut our current staff in half, ask them to work twice as hard and pay them 50% more.

Whilst this all makes common sense, it will all turn to custard if you are not diligent in your hiring practices. Not only do you have to ensure candidates have the knowledge, skill and experience to do the job, but you also need to invest a few “insurance dollar” in checking “below the waterline” by finding out “how” they will do the job.

It’s easy to hire on aptitude, but it’s impossible at interview to understand the candidate’s attitude. A tiny investment in a valid employee attitudes profile may save you thousands of dollars down the track. Or to look at it another way, how much money will you lose by hiring cheap talent with poor attitude. Yes, you can test for attitudes!!

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