Employees in Services – The Most Valuable Asset?

By | April 26, 2017

Before going on to discuss the employees role in services, we feel it is important to differentiate between products and services. Services in most simple terms are deeds, processes and performances. Services may also be defined as any activity or benefit that one party offer to another that is essentially intangible and does not result in the ownership of anything [1]. These simple definitions give us good idea about what services are. We can give examples of a barber, a tailor, or a restaurant as services. Products on the other hand are offerings that are tangible in nature like for example a car.

In today’s world, services are becoming more and more significant in any country’s economy. As Louis V. Gerstner said in 2001 “Services are going to move in this decade to being the front edge of the industry”. This quote comes from the former CEO of a company which claims to be the world’s largest service business in the world, IBM. The importance of services in today’s world can be further emphasized by the fact that services comprised of almost 80% of United States of America’s Gross Domestic Product in 2003 [2].

If we talk in Pakistani context we can see that the structure of the Pakistani economy has changed from a mainly agricultural base to a strong service base. Agriculture now only accounts for roughly 20% of the GDP, while the service sector accounts for 53% of the GDP with wholesale and retail trade forming 30% of this sector [3]. This fact also demands that more work should be done on services marketing for proper growth of the sector.

Now that we know about the difference and importance of services, we would like to shed some light on the difference between marketing of products and marketing of services. Marketing for services is thought to be different from that of a product by a lot of experienced marketers. This was found out by Gary Knisely, a principal of the consulting firm Johnson Smith and Knisely, in 1979 when he interviewed several high-ranking marketing executives who had all gone to work in consumer services industry after extensive experience in the consumer packaged goods industry. There are generally 4 Ps considered in packaged goods marketing namely Product, Price, Place and Promotion. But when we talk about services, it is believed that there are three additional P’s that should be considered for services marketing namely People, Process and Physical evidence [4].

The fifth P i.e. People include both employees and customers as customers also play an important role in the service delivery process. But we are going to focus on employees as far as this article is concerned. From the above discussion it is obvious that employees play an important role in the services marketing because of the vary reason that employees are involved in the process of delivery of any service e.g. a waiter in a restaurant is actually the conductor of all the process related to the customers. So it is of great importance that he gives the right image to the customer otherwise the customer might never return. So those employees that are a part of service delivery, we can call them customer-contact service employees, play an absolutely crucial role in building a repute for any service.

The importance of customer-contact service employees can be understood because of the following statements, which will also show that why employees may be the most valuable asset of a services organization. Customer-contact service employees are very important because:

o They are the service

o They are the organization in the customer’s eyes

o They are the brand

o They are marketers [4]

In many cases, in a service, there is just the employee and nothing else i.e. employee is the service e.g. hair cutting, physical trainers, legal services etc. This means that the service being offered by the business is the employee. Thus, investing in the employee is same as investing in the manufacture of a product.

A customer-contact service employee may reflect the image of the service organization even if he or she is not directly providing the required service. If you enter a hospital, every employee that you encounter from the receptionist to the clerk might influence your opinion about that organization. Thus, employees sometimes do become the organization in customer’s eyes.

Employees also become the brand for a service. A very good example can be of a university which is well reputed amongst students. The quality of most universities is judged by the caliber of the teachers that are teaching there. When a student interacts with a professor, he has positive emotions about the university only when he feels that the teacher is knowledgeable and understanding and has complete control over his subject. We can say that one reason, among others, LUMS is thought to be better than other universities is due to the perception that its faculty contains more PhDs than anybody else, hence having better educational quality than others. Thus, an employee also becomes the brand for a service.

Because contact employees represent the organization and can directly influence customer satisfaction, they perform the role of marketers. They physically embody the service and are walking billboards from a promotional point of view [4] If we are on the road and we see a person sitting on a motorcycle, going to deliver a free delivery, or to deliver letters or documents, you can tell from their appearance, clothing or even kind of vehicle that which organization they belong to. So, even when the service employees are just doing their duty, they are acting as marketers for their organization.

Here we would like to refer to Mr. Dennis Harting who says “What is the most valuable asset that a company has? Is it the name, customers, goodwill, physical resources, or product line? The answer is that it is none of these. A company’s most valuable resource is its’ employees. Any organization will go only as far as the people who are driving it. In fact, a company is really just a group of people who interact for a common purpose. They are the ones who make up the organization.” [5].

He also states that “It is important that managers and owners begin to realize that the employees are the most valuable asset any organization can have. Those who accept this new business model will structure their compensation and bonus program to reflect this belief.”

Above discussion only points to one thing, generally for every business, and particularly for any services business, employees are definitely the most valuable assets. We personally feel that in Pakistan employees are still not given the right place and importance. One feels that more and more attention should be paid to role of employees in services and investments should be made to improve the most valuable asset of services.

Source by Junaid Ahmad

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