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Francis Wade | The low-pay productivity trap

Published:Sunday | July 5, 2015 | 7:00 AM

Some Jamaican executives are caught in an unproductive trap of their own making.

By investing as little as possible in their people's development, they have produced cultures of low productivity. How long does it take for such a policy to bear bitter fruit and how can it be reversed?

Most of us are shocked to hear of a seemingly mediocre acquaintance or colleague who migrates, then accomplishes something miraculous.

It is hard to pinpoint why in every case, but one answer may be that many local companies stifle their staff's development. By systematically failing to invest in their growth, they reinforce low standards.

In some organisations, the problem starts even earlier. As a former client's executive team complained: "Our company is filled with under-performers - we only hire thirds and fourths."

That is, whenever they bring people in for interviews to fill a position, they invariably end up hiring the third or fourth choice - never the first or second. The reason - they simply aren't paying enough.

When asked why they don't trust their own process, thereby hiring better people then helping them to perform, they further complained. "If our people were to find out how much that new person was being paid, there would be a riot!"

With that retort, by the end of the meeting it was clear that the current staff complement would be unable to implement the breakthrough strategy the company needed to ensure its existence.

The unplanned choices they had made to hire 'thirds and fourths' had become a huge problem that could not be easily fixed.

Like many other companies, they were stuck in a trap of their own thinking, committing their company to low standards that were now inescapable. What can the average company do to prevent this from happening?

1. Seek out global

best-in-class behaviours

Somewhere in the world, there is a company that's doing the same work, using less people at a lower cost. In some industries, like insurance, benchmarking resources like www.opsdog.com are easy to find and can be used as a ready comparison.

Whatever your industry, you need to discover what the best in the world are doing, and use them as a standard. If you find a large gap, you should be alarmed as your industry may be ripe for disruption.

Before a tragedy takes place, use the information to set new goals for your company. Even if you cannot find a direct comparison, understand that a viable business must conduct a relentless search for ways to reduce costs and create value for customers. To fail to do so is to invite disaster.

2. Re-engineer

core processes

One of the easiest ways to reduce costs and create value is to identify and re-engineer the company's core processes. The effect of mediocre staff is only amplified when they are stuck doing things they shouldn't, in processes that are outdated.

It is tempting to bring in new technology but it's a mistake to rush into an automation project when the underlying ways of doing work are not well understood. Even the best employees in the world can only do so much when they are limited by poor workflows.

The steps involved in process reengineering are easy to find but most companies can't summon the will. They fail to see that by not improving their processes, they hasten their own demise as technology changes accelerate.

3. Give up ego

Even companies that see the need to make process changes don't have the courage to bring in the right staff to lead such efforts.

Too many Jamaican executives use all sorts of tricks to make sure they are the smartest people in the room at all times. They shy away from hiring staff who appear to be brighter, or more intelligent. This sometimes unconscious behaviour is in stark contrast to that of the best managers.

By contrast, they encourage younger staff to continuously step up to duties requiring greater responsibility and skill. This requires an investment in training but it also represents a willingness to place the company's welfare over your own personal interests.

4. Develop staff aggressively, for free

As I have mentioned before in this column, too many managers give up on developing their staff because they lack a proper budget. The fact is the online world now provides a number of free learning opportunities that can be used in creative ways.

Human Resource professionals must sometimes be pushed by executives to find these alternatives, rather than waiting for the funds for classroom training to be made available.

A handful of well-trained, hyper-productive employees can outperform an organisation overstuffed with 'thirds and fourths'.

But the place to start for some companies is by looking and making room for the best. They will never, ever be the least expensive but they may be the ones who more than make up for the extra pay required to bring them in and keep them around.

n Francis Wade is the author of 'Perfect Time-Based Productivity' and a management consultant. To receive a free summary of past articles, send email to: columns@fwconsulting.com