Serious staff issues resulting in unprofitable business.

[Rhothgar]

I am typing this on behalf of a very good friend who is close to a nervous breakdown with his business and his staff.

He regularly confides in me regarding his business and I have offered to help him in any way I can. He is not particularly computer literate hence my posting this message.

I coudl write pages upon pages of the issues but, from what I can make out, the fundamental issue is staff performance. They are crippling his business because of failures to make basic decisions and on them. Some are operating in the region of 30-40% efficiency on jobs which costs him £25 in overheads and he is charging out at £45 an hour.

Overall, it appears from some basic figures that as a business they are operating at just a shade of 20% efficiency.

£45 x 20% = £9 an hour against overheads over £25 an hour.

The business is haemorraging money.

He is so fearful of legislation and doing everything by the book as he is required to do.

He is also loathed to make anyone redundant.

I have advised him to speak with ACAS for impartial advice.

Certain members of his staff are very disruptive and will go away and sulk for a day when they are brought to task on even the slightest issue.

This cannot be right.

He has a couple of Polish staff which in the main are hard-working but they make basic mistakes. One of them is the one who has the serious attitude problem and has been employed continually for more than 2 years.

He has been told that as he (the Polish man) is an ethnic minority he has more legal rights than most. I accept that he will have the same legal right but surely it cannot be right that he has more?

I am looking for some advice on several matter including the above.

He is thinking of getting the staff together on Thursday and telling them that the business is going down the pan unless they buck their ideas up.

His head is not particularly in the right place so I have offered to go in and mediate in the meeting, take notes and issue minutes. Is this a good idea? Should I be aware of any pitfalls?

This friend has been very generous to me over the years and I always feel that I owe him something. Funnily enough, he always says the same to me but I think he is just being polite!

[Harmonica]

Re: Serious staff issues resulting in unprofitable business.

He has a couple of Polish staff which in the main are hard-working but they make basic mistakes. One of them is the one who has the serious attitude problem and has been employed continually for more than 2 years.

He has been told that as he (the Polish man) is an ethnic minority he has more legal rights than most. I accept that he will have the same legal right but surely it cannot be right that he has more?

He would need to be able to prove that he has been singled out for being Polish before he can exercise those rights. It is not straightforward.

[Rhothgar]

Re: Serious staff issues resulting in unprofitable business.

He would need to be able to prove that he has been singled out for being Polish before he can exercise those rights. It is not straightforward.

Thanks for the input.

The fact that the troublesome element is Polish has nothing to do with it. He wouldn't have employed the guy in the first place if he held any prejudices.

Personally and this is my personal view on looking at his business from the outside, sometimes when I visit both the Polish guys (whom I get on well with I might add) tend more often than not to speak Polish to each other in the workplace and I feel that that is not right.

The problematic guy's English was awful when he first came over and now it is really quite good. His comprehension may be lacking though. The other guy, the newer one, his English is awful but it is not helping him if they continually talk Polish.

My partner is Austrian so I know what my friend is up against in terms of comprehension and my partner's English is superb but sometimes her comprehension (perhaps listening skills, after all we are an item) let her down.

The issue is essentially with all of his staff not just the Polish guys.

The main problem is my friend is too nice. People therefore take advantage of that. He also admits that he is not a natural born manager. What to do?

[Harmonica]

Re: Serious staff issues resulting in unprofitable business.

The issue is essentially with all of his staff not just the Polish guys.

The main problem is my friend is too nice. People therefore take advantage of that. He also admits that he is not a natural born manager. What to do?

He really needs to lay the law down. If you start a business and don't occasionally crack the whip (lawfully) then you will be taken advantage of. He is being taken advantage of because he's a nice guy but it's his business and nobody can do it for him.

He needs to be specific about what he sees are the staff problems that are holding the business back and what he expects his staff to do in order to remedy the situation. As an employer he has every right to do this.

[seduraed]

Re: Serious staff issues resulting in unprofitable business.

he needs to take back and hire a manager one who will get rid of the dead wood. just make sure thst the dismissal processes are fully adhered to.

[Rhothgar]

Re: Serious staff issues resulting in unprofitable business.

Thanks to those that have offered advice so far.

He uses a compnay called Peninsular I believe business advice on procedures but just so I know what is the best guidance document that is concise and not too 'legalese'.

I know he follows every procedure but he is constantly worried that he is doing something wrong in one way or another.

[seduraed]

Re: Serious staff issues resulting in unprofitable business.

Perhaps a meeting with the staff explaining the situation i.e that they are not earning enough to cover themselves and if they do not do something about it there will be no jobs as the company will close . He then needs to set clear targets and expectations for each member of staff monitor these and guide mentor and use sanctions on failing staff . This sounds harsh and is but if the company is to survive he needs to inject some tough love.

[loulouxx]

Re: Serious staff issues resulting in unprofitable business.

Hi I was a 'soft manager' and found that staff who I managed took advantage of that. Luckily the Directors were a lot harsher which often resulted in grievances against them. The behaviour and incompetence should not be an issue and can be dealt with an informal warning if serious enough then I think it can be escalated to a formal written warning then dismissal. Then if issues arise with training needed which led to incompetence then these will need to be addressed. There were a lot of polish, Russian workers where I worked and totally agree it is frustrating and I found it intimidating but I am not sure whether there is any regulation in dealing with this. ACAS have their disciplinary procedures outlined on their website and that will give your friend some idea of how to address the problems and what action is appropriate. In my opinion it isn't a good idea to give the impression of any problems in regards to cash flow or money problems but that is just my opinion because I know that it didn't do any favours with my directors and the staff who were the worst used it against them. Hopefully your friend can sort this out without any problems.

[MissFM]

Re: Serious staff issues resulting in unprofitable business.

Presumably this is a small business and your friend is the proprietor?

I'm inclined to agree with the idea of involving the staff, gathering them round and explaining that they must go up a gear and work as a team towards more efficiency.

If there are any troublemakers or individuals set in a negative rut then they must be told that the business is in no position to carry that kind of attitude.

Maybe he could give them each a positive incentive as suggested above.

Your friend sounds a really nice guy and maybe the staff need to see more of this and be proud to work in a team with him. They might well see the huge positive benefits for them in working actively towards tuning things around. In a small business you just can't afford passengers or a negative attitude which, though still unhealthy, might be absorbed in a larger concern. It obviously needs to be spelt out.

[jon1965]

Re: Serious staff issues resulting in unprofitable business.

If I am honest I can see why the two Polish workers talk to each other in Polish especially if their English is not that good. I am sure if I was working in a foreign country and I had a British co worker I would talk to them in English. In the job I used to do I came across a lot of Eastern European workers who spoke to each other in either their native tongue or a common one (sometimes Russian) .

I personally have a hatred of time and motion studies and people who quote times to do a job partly because they are often measured over a short space of time but then people are expected to work at that rate all day. Why do you estimate that they are only working at 20% efficiency , it's very easy to pull such a figure out of the air but maybe they are actually working at 70% and the costings need addressing. Just a thought.

If people are genuinely skiving or showing poor performance then it should not be difficult to manage them out of the business , make the targets SMART and then follow up with training if needed or discipline. Just treat everyone equally

[enquirer]

Re: Serious staff issues resulting in unprofitable business.

Staff issues seem to be such that any attempt to trim the dead wood will lead to embroilment in lawsuits. If he wants to continue as is, he will have to be prepared to weather this.

Looking at it as a business proposition, the best course of action might be to close completely, restart (is it a limited company?), and then selectively rehire.

[Rhothgar]

Re: Serious staff issues resulting in unprofitable business.

Presumably this is a small business and your friend is the proprietor?

It is. He used to see about £500k-£600k turnover. He tried to expand and that failed leaving him in serious financial difficulties from which he had started to recover if not fully recovered.

Maybe he could give them each a positive incentive as suggested above.

Where do you see this please? I cannot see any suggestion of any incentive above.

[loulouxx]

Re: Serious staff issues resulting in unprofitable business.

Work productivity from what my dad said is a hard one espicially when average managed. My dad was a GMB shopsteward n on the national commitee. His argument against was not any one person is the same and that training needed to be managed for it to be fair. Many disciplinary meetings were thrown out because of those reasons. Maybe a personal review for each member of staff so they can raise concerns about their roles and training. Also then your friend can say what he expects to be done and the needs of the business to run successfully that should give an idea of weaknesses etc. As above needs to be fair to everyone. Miss FM mentioned incentives. Again it needs to be fair and reachable for all staff.

[Rhothgar]

Re: Serious staff issues resulting in unprofitable business.

Why do you estimate that they are only working at 20% efficiency , it's very easy to pull such a figure out of the air but maybe they are actually working at 70% and the costings need addressing.

There were 65 days between 2nd January and 8th March this year. He has 7 staff who each work 8 hours a day. That's a total of 3640 man hours. They charged out 752.78 hours. That's an an efficiency of just a shade of 20% (20.68% to be precise).

I appreciate that people cannot work at 100% efficiency all of the time. 70% would be a realistic figure if they were focussed in my humble opinion.

As an added piece of information, it is an car servicing, repair and MOT station. At £45 an hour, he is very cheap for the amount of staff.

He finds it extremely difficult to attract staff because of his rural(ish) location. And getting staff these days with any calibre seems to be impossible.

So at 20/68% of £45, he is taking approx. £9.31 an hour and overheads are £25 an hour.

Fundementally, having just typed the overheads figure I am struggling to see how his overheads can be that low. I think his break-even point is more likely £45 an hour.

He hasn't paid himself a salary in a very long time. He has 4 full-time technicians so that has to be nearly £40 an hour approx. Then a receptionist/workshop overseer and a trainee. They're clearly not free but for the calculation I have included any chargeable hours they have been charged out at.

[wales01man]

Re: Serious staff issues resulting in unprofitable business.

What on earth do the staff do in all this non working time?