Cost of substitution

Don't you sometimes wonder how it is possible that statistics talk about high unemployment rates and at the same time you read in the news that there is a shortage of experts?

Well, there are two reasons for this contradiction:
  1. What they don't say in the news: There is a lack of cheap experts. Companies are searching for people who work for a banana and wonder that the only candidates showing up, are apes.
  2. Companies always try to achieve more with less people. This implies that you need good people because only the best and most efficient workers can achieve more than most of the others. So many workers available but not matching the high performance requirements. But even if the best workers out there achieve more, nobody can run on 150 % for years. So often workers are "consumed" in the long run. You can work at full power and full speed for some months, maybe for a few years, but there are mental impacts and impacts on motivation and health. At the final end when your energy is exhausted you will further be criticized for your decreasing performance. So the already low number of very good people available is also decreased by those who end up with burnout and by those who take their own lifes.
So although there are enough people "available on the market", companies do scorn most of them looking for the best workers only (or for most stupid ones - depending on how you look at it). From the company point of view it even fits the interests when newspapers write about the high employment rates because scared people will ask less money when they apply for a job or stay at even the worst job fearing unemployment. And some of the most efficient and hardest working people may abstain from asking more money.

In our consumer society, employees also tend to be consumed and companies do believe the newspapers when they write of high unemployment rates. They might think that there is enough human resource left, not considering that they cannot fit the high expectations.

But let's assume, a company needs a new worker, what are the required tasks?
  • Prepare a job description
  • Outsource hunting for appliers or do it on your own
  • Make final interviews (or more if you do hunting on your own)
  • Prepare contract
  • Some other administrative work (preparing clothes, creating user accounts, print business cards, ...)
  • Send new employee to courses or have a peer explaining everything
  • Accompany employee in the first few weeks (e.g. by introducing to new clients and projects, ...)
  • Wait until new employee has adapted to new situations and finaly reaches performance of the previous employee
Depending on how sophisticated the job is, a year or an even longer period might pass by until the old level of quality and efficiency or profitability is reached again. In IT business it is usually a year or two. Always assuming, you find a same quality person again that fits in the team and find it on the first attempt.

Yes, everybody can be replaced somehow, but every replacement required, will cost time and money! To put those costs into effective numbers is difficult and that's why in many cases there is no awereness of the real impact of a staff change ("what cannot be put into numbers, cannot be controlled"...).

Now that we talked about people you can apply this to material, machines, software modules, technologies or structures accordingly.

The best strategy therefore is:
  • Choose wisely your workers etc
  • Do the required maintenance work (motivation etc)
  • Don't consume them
Related posts: Why not multitasking how to, Good heart these days is hard to find, The big difference of the how, How not to eat the frog.


JLTan said...

At first, I thought from your title that you were about to blog about Jesus, who gave up Himself to be our substitute for the penalty of sin.

Anyway ... yes, I agree with your comments. I see that the trend for companies to aim to do more with less people. This trend tends to make the big companies aim for more cost-efficiency ... which ends up having fewer people employed. Those employed end up earning good money so that they do not leave the company too quickly.

This is good for them, but on the other side of the coin, it makes it harder for the unemployed to find employment.

ismi Poppy said...

It's up to the workers to regulate themselves and their productivity levels so that don't happen. Not middle management. You can't go into anything BAM!! so hard and fast that you think you can keep up that same level of productivity at top speed. If u raggd your car that way you'd reck it.

Martin Wildam said...

Thanks for your input. It made me think and currently I wonder - if it is so easy and logical - so many people run into burnout or get nobbled. Many people worry about their jobs and they accept more work.

I understand from your comment - and agree with you - that the employee has to tell management when the capacity maximum is about to be reached. But what if management does not listen and instead puts the employee(s) under pressure?