I couldn’t resist when I saw this. In my opinion, this is one of the best Dilbert’s ever.

Click through to see full size or to subscribe to their RSS feed.

Well worth the daily laugh.

I keep hearing people talk about how bad it is to outsource our labor to other countries. Somehow, the act of sending our work to someone who will do it for less is un-American.

The fact is, outsourcing is as American as it gets… almost like apple pie.

I guess it really comes down to is where the division of labor should be. It answers the question of who really is the best person to complete the job at hand. Cost and skill both have to be taken into consideration.

Ken Stewart points us to Master Lock’s labor outsourcing to Asia and Mexico. You can read the full quote there, but here is a part:

In January 1997, Master Lock announced that, after 75 years making locks in Milwaukee, it would begin importing more products from Asia. Not too long after, Master Lock opened a factory of its own in Nogales, Mexico. Today, it makes just 10% to 15% of its locks in Milwaukee–its 300 employees there mostly make parts that are sent to Nogales, where there are now 800 factory workers.

Why is Master Lock willing outsource? Is it because of Walmart? I don’t think so. If it wasn’t Walmart asking for a lower cost, it would be someone else. As a product becomes more prevalent, the price goes down. Just like when a product becomes more scarce, the price goes us… simple law of supply and demand.

I think that outsourcing comes down to two basic reasons.

1. People demand lower prices than the day before. People are willing to pay more when the product is better, the service is better or the perceived value is greater (scarcity causes an increase in perceived value). I have talked about this a lot on this blog here, here and here… to name a few. When the product is the same, the sale will go to the person with the lowest cost.
2. Knowledge is the new commodity of our world… or at least our part of the world. It is common place for there to be many types of workers. People that have different skills sets and different ambitions. Any entrepreneur will understand that it makes business sense to outsource to the lowest cost for the greatest value. Repetitive tasks that can be taught easily should go to an employee that doesn’t have a great level of experience or training… because those people cost too much money.

This may sound a bit crass, but the fact of the matter is there are highly qualified employees outside of this country that are just as qualified to run a stamping machine or answer a phone or code a website. (Bear in mind, I am not saying you should outsource because you can… you still have to consider the customer experience and I would never outsource a phone call to a non-native speaker as a standard.)

Does that mean that our employees are smarter? No. I know plenty of dumb people here in America and my guys in the Philippines and India are very good at what they do for me.

Does that mean that someone from India is less valuable? Absolutely not. I have some very highly qualified people that I work with overseas. I couldn’t be as successful without them.

Every society that has lived on the earth has had a division of labor. The right person for the job. When I send work to India or the Philippines or wherever else I might send work, I make a distinction between what I will allow them to do. I have employees here locally, but I make a distinction of what I will allow them to do as well.

I think outsourcing is critical. I don’t think we sell our soul when we do it. I think we simply make business decisions. If it costs more to outsource, then don’t do it. (Cost can be more than just dollars. It can be customer experience, training time or loss of PR value.)

Of course, you can think of Master Lock providing 800 people with work without encouraging illegal immigration… that has got to be worth some "soul" credit, right?

Walmart is pretty proud to announce their new logo right now. They are focused on creating a new image for themselves.

From the announcement:

But what really matters is what happens out there in the stores. This update to the logo is simply a reflection of the refresh taking place inside our stores and our renewed sense of purpose to help people save money so they can live better.

The "renewed sense of purpose…" is laughable to me, but, I like that the goal is to drive down costs for the consumers… I get to benefit from that. Economies of scale are a great thing when they work in my favor.

Why I love Walmart?

I love that Walmart is a business first. They understand that their main purpose is to provide greater shareholder value. The provide greater profits to those that are stockholders in the company despite the goofy line of "renewed purpose."

They take a lot of heat in the media. At NewsBlaze yesterday, David Nassar says:

But while Wal-Mart unveiled its new logo yesterday, nothing is changing for its workers who need health care, its customers who expect non-toxic toys, and its neighbors who must deal with increased traffic, crime, and pollution.

These issues deserve to be addressed substantively — not with a gimmicky logo change.

Let’s look at these stupid statements just a little.

1. Workers need health care. If this was that important to the workers, they wouldn’t work there. Besides, insurance is just a crutch and furthers our problems in health care. And don’t they provide a whole list of $4 prescriptions?
2. Customers expect non-toxic toys. Wasn’t that the toy manufacturers and not Walmart? Why would Walmart want toxic toys? To kill their customers? That is simply a dumb thing to say.
3. Neighbors must deal with increased traffic, crime and pollution. How does Walmart increase pollution? If increased traffic is a concern, why does the city allow them zoning… are these in cities that don’t have governments run by the people and for the people? I have seen a number of Walmarts with police substations right in the same building… is there increased crime there? Besides, how does Walmart increase the crime… that doesn’t make a bit of sense.

Why is it that when a company is sort of successful people applaud? When a company is very successful, people want to tear it down.

Oh, I forgot, "Big Business Is Bad."

In a free market society, as long as businesses are ethical and adhere to law, those businesses will excel. If as many people hated Walmart as the critics would have you believe, then why is it such a successful business? If Walmart is as bad as they say, why do people continue to work there and shop there?

Why I hate Walmart?

I hate the long lines and the fact they can’t figure out how to open more registers.

I hate that I have to say "hi" to a greeter every time I go in.

I hate that they have employee of the month parking but tow customers.

I hate that they pretend they are going green to protect the environment.

But I don’t hate that they are a business trying to increase shareholder value.

On the first day of the month an employee asks his boss for a raise. Boss says, "I am not sure that I can really justify paying more money. I don’t know that it really makes sense to pay your more money, but if you work hard and improve, we can talk in a few months about a raise."

So, the employee sends his résumé out into the world to find him a better job. For the next month, the employee is focusing his efforts on finding new work… writing cover letters, conducting interviews and making follow-up calls.

After focusing more of his time looking for a new job instead of doing his current job, he gets a new job offer worth 10% more than his current job… he is ready to jump ship.

The employee goes back to the boss and says that he is putting in his two week notice because he has accepted another job.

Two possible responses:

For a valued employee, the boss says, "If I can match the job offer, will you stay?"

For the mediocre or bad employee, the boss simply says, "Pack up your things."

–

More often than not, the employee doesn’t even ask for a raise because he figures he knows what the answer is. So often, when a good employee turns in notice, I hear employers say, "What do I need to do to save an employee?"

My thought is that once someone decides to move on, it is going to cost me a lot more to keep him than if I would have just treated him fairly to begin with. Not to mention the amount of money the employee wasted of mine looking for other work, and now I have to pay to make the employee happy again.

Here’s a thought, always pay an employee what he is worth. Never be put in a position that you have to say, "Well, you weren’t worth it when you weren’t looking for other work, but now that you are looking for other work, you are worth it."

Always treat your employees like they are always looking for other work and really work hard to make them happy…. after all, they are looking right now.

I often have conversations with clients about setting up blogs for their employees. These blogs can be for internal use only as a way for employees to have a level of internal communication without flooding email accounts for other employees that really don’t care. These blogs can be on the public internet site allowing anyone to see.

It surprises me how often I hear the concern, "What if the employee says something that we don’t approve? I don’t want to have to police their writing all the time."

To this I ask, "Do you proof all of their emails? Do you listen to all their phone conversations? Do you go to all your client appointments with them to verify their speech?"

You are stupid to think that your employees always say things that are along company lines. You are naive to think that you can monitor and control all of your employee communication.

The fact is, a blog provides you with a level of security that you may not have had before. If the employee is dumb enough to say something in appropriate in a blog, you can address that with written proof. If the employee has a private conversation and says the same thing, you have nothing.

Get into the now and stop living in the past. The fact is, your employees are saying things… just give them a forum that you can monitor and maintain.

The right people are everywhere… they are all around you. Yet the statement is always heard among employers, "It is so hard to find the right people."

What they are really saying is, "It is so hard to find the right people at the cheap price I am willing to pay."

Justin Foster comments that if you find the right people, you don’t need a process for everything. His terminology seems a little different than mine. He talks about people filling in the gaps when not having a process and I think of the gaps as the procedures of a process. I think that everything needs a process.

The challenge, though, is finding the right people. Although the people are all around, they aren’t going to come to work for you based on your current tactical approach?

Why?

Well, here is the issue. In order to find the right person, you have to find the person who is willing to take ownership. Someone that is willing to take long term ownership. Someone that is willing to take extra time and put in extra effort to make something his own.

That person costs more than the average. That person will want to step outside the realm of his responsibility and create new processes, new procedures and implement new ideas. This person expects to be empowered to do that.

There is a significant problem with this person. Or, more accurately, these people. You get too many bosses and not enough workers, processes get out of hand, quality suffers and automation ceases.

And just when you think you have the right person, that person will leave you for the other "right job". It is like the old saying, "A man waits all his life for the right woman. Once he finds her, she won’t marry him because she is waiting for the right man."

When you are an organization with three owners that all know their part, it is really easy. When you are an organization that relies on many people, there things that have to be dictated. Not everyone will take ownership. No matter how good you are at recruiting, you will never get all of your people exactly where you want them.

The best example is a fast food restaurant. I would be great with the customers. I would be efficient with the food. I would be exact with the money. I would cost more than 15 times their normal starting wage. I would never be hired.

Finding the right people is a good sentiment, but sometimes you have to settle because you can’t afford the $100 per hour price tag that good people will cost.

In light of my last post, I wanted to post a link for a forensic accountant.

This is offered from Business to Business CFO provides CFO services to growing companies and offering financial fraud investigation, litigation support, forensic accounting, and expert witness services to litigating attorneys on a nationwide basis.

They offer a directory service for a link exchange at their site. Take a look you might find a category to make it worth your while to post a link on your site.

I am amazed at how many different opinions can come from the same set of stats. It is fascinating to me the decisions that business leaders will make based on a set of stats that are likely to be interpreted incorrectly.

I was doing a little research and ran across a post on Universal Health Care.

One of the doctors who worked on the study (obviously biased to a national health care program) commented that most doctors support national health insurance. He said:

As doctors, we find that our patients suffer because of increasing deductibles, co-payments, and restrictions on patient care. More and more, physicians are turning to national health insurance as a solution to this problem.

Basically, he is saying that patients suffer because of insurance not because of lack of insurance. Since when has the government ever provided a service that private business hasn’t done better?

Personally, I hate the insurance companies. I think they make way too much money and cause way too many problems providing too little service… just ask me about the pending surgery for my daughter’s eyes.

I long for the day where health insurance goes away… but I recognize that right now it is not a viable option. Too many have become dependent on the "security" it provides. People just don’t understand that health insurance is a significant contributing factor in the rising health care costs… not the lack of insurance.

So, what do you, as a business, do to combat this?

You need to provide insurance to your employees… that has become a requirement. Until the free market system can be used to manage the costs of health care, your employees will expect it. But, there are better ways. Don’t think that the traditional method for health insurance is the only way to go. There are other options.

Give someone like A-Plus Benefits a call and you might be surprised what you can do for your employees.

Corey Smith is the Chief Web Architect for Dealer Marketing and maintains news for the copier, printer and document management industries.

Remember that loyalty goes both ways. If you want your employees to be loyal to you, you first must show loyalty to them. If you are transparent in your business dealing you will garner a significant level of trust. Trust your employees work to improve the way you do things. Be willing to listen to and implement their ideas.

Want to really earn your employees’ loyalty? Give them a raise before they ask for it. Give them a bonus without being expected. Give them a day off with pay because of the good work they do.

A little loyalty from you will go a long way with them.

One reason employees often will look for other work is because they feel they are under-compensated. Employers will find any reason to pay the least and get the most out of employees. When employees try to negotiate, the employer will simply ignore or justify the request as invalid.

Everything in the employer’s eyes changes the day the employee comes with a job offer from someone else.

So often, the first thing the employer does is to offer the employee more money to stay. They suddenly are more willing to negotiate. Suddenly they think the employee is worth a few extra dollars.

What message does this send to your employee?

This tells your employee that unless they can prove to you with a job offer that you are worth more… or that you have other options, you are not going to consider paying them any more. It tells the employee that it is okay for them to look for a job while employed because you want them to prove their worth. It tells your employee that they may be able to bluff their way into a higher pay grade if they simply threaten to leave for higher pay.

My feeling is that if they are worth more when they have another offer, they are worth more before they have the other offer. If you pay them what they are worth before they look, then they are more likely to focus on what you want them to do and not spend that time refining a resume and getting job interviews lined up.