Sunday, January 29, 2012

Screwing the worker

Briefly when I was a callow youth, I had a business. It was a joint venture with my step mother, a garage in South Gippsland. My father owned the building freehold and we paid him rent. It was successful, but the bright lights of the city were calling me. Does that qualify me to comment on business? No, not at all, but I did learn some business things. One was don't trust staff. The other was if you do happen to have staff who are trustworthy, do all you can to keep them.

I just worked out this formula below in my head today. I am absolutely sick of owners of businesses complaining about how much their staff cost them. One successful restaurateur, George Colombaris, suggested staff should not get penalty rates for working un-sociable hours. Ha, so the lowest paid workers in Australia are getting rich on penalty rates. I don't think so.

Business owners, here is a formula. Costs, including staff, rent, supplies, taxes and all the rest, plus a profit margin for yourself equals the price you charge. It is that simple.

There is not a lot you can do to reduce many of your costs, except for staff and so you target the soft option. Fortunately in Australia workers are protected by awarded conditions and pay, so you can't cut those costs either. Instead you make a big noise in the media about staff costs. No, all business should be paying their staff the same basic pay or more. Staff costs do not make your business uncompetitive, so cease your bleating.

10 comments:

  1. If Colambaris wants cheap staff he could open a McDonalds.

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  2. If you pay people peanuts you get monkey's. Sounds like pure greed is rearing its ugly head once again :-).

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  3. I loathe the attack on workers' rights by capitalists, developers and business owners.

    There used to be a super programme on tv called Undercover Boss where some bloated capitalist would secretly do the work of an ordinary worker, for ordinary pay, INSIDE his own organisation. At the end of the week, the boss inevitably had a new perspective on the relentless nature of physical labour, dodgy conditions and crap wages.

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  4. You are 110% right about staff costs not making a business uncompetitive, Andrew.
    "If you have to compete on price alone, the market is too crowded or you are in the wrong market."

    The "cheap" end of the market belongs to those migrants or others with no portable skills, preferably in family groups, prepared to work their guts out to get established. [I'm not condemning them to this end of town, rather saying Colombaris should not rob them of this limited opportunity, and put his own skills and advantages to better use.]

    In just two months I've met two chefs who have both opted for admin jobs; they love cooking and don't mind the hours but are sick of being treated abusively.

    There are many things which make a restaurant popular; price is the least of them.

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  5. As far as I'm concerned it's the ever-rising utilities costs that drive up the cost of everything else such as rents, deliveries etc. This is where many businesses run into problems that are unavoidable. When the electricity bill is too high, they sack a junior staffer because he/she is "costing too much". There's something else I could say here, but my lips are sealed. I need my job.

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  6. I'm even less qualified to comment - but that won't stop me! I was surprised that Colombaris actually thought anyone would take him seriously - unless he was starting a movement to develop robot-wait-staff. Maybe he's finding that TV stardom isn't the only factor required to make a business successful??

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  7. Having worked for a mere three months as a 'banqueting trainee' at a very famous hotel in London, I can honestly say that kitchen staff are very, very badly treated. Think of hazing in the army and how, if you survive, you're given unofficial permission to treat people below you just as badly and you have it.

    Hard work is vital for the industry, but so is decent treatment. Wages comes under that category and it's criminal to see what business owners will spend their money on instead, such as million+ dollar remodels etc.

    Rant over, except to say that I had missed out on the George Calombaris comment and, as someone who has worked his way up from apprentice chef to media megastar, his comments are really disappointing.

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  8. That's why in many Northern European countries there are minimum wages, which include all the taxes you have to pay to the government including pensions. Everything they earn over that in tips should be seen as gifts since its not a fixed income.

    The better someone is in his/her work should be compensated by the employer, not just to keep them but to make a better business out of it.

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  9. I hope Georgys business suffers for his horrible attitude.
    Waiters and dishwashers control the work mood in even the best restaurants kitchens. I hope he gets salmonella.
    yrs try Ex Waitress, Tolarno 1968, Moras never passed on the tips. You hear me Madam Smirka Mora?

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  10. Victor, like many of his ilk, I suspect he has the attitude, I did it, so why can't everyone.

    Windsmoke, it is greed. He can hardly be poor.

    Hels, I remember the show, but I don't think I saw it. One of the current affair shows had Gerry Harvey go into his stores undercover, but not as a worker.

    FruitCake, being a chef is a pretty difficult and high pressure job, isn't it. I am happy to pay a fair Sunday surcharge anyway.

    River, intriguing, but yes, those costs you mention are fixed, the number of staff is not.

    Red, I don't doubt his political agenda and he certainly started a conversation.

    Kath, I can imagine what London would be like. Maybe Colambaris has the self made man attitude.

    Peter, we are fortunate to have such wage protection here too, but of course many would like to see it broken down.

    Ann, I think that is unforgivable to not pass on tips. I guess she is not your favourite person.

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