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Wednesday, October 14, 2009

Recession fatigue: Patience commensurate with compensation

A report in this morning’s New York Times sheds light on the cost of payroll reductions. The article features a couple in a two-income household. She is an elementary school teacher. He is a pilot for a commuter airline, now a first-officer (co-pilot), having been demoted from the rank of captain. His pay, too, was reduced significantly.

I thought the story was important because it illustrates one side-effect of company cost savings: Patience on the part of those employees is also cut. The pilot talks of becoming uncharacteristically “uncorked” when someone makes even the slightest non-positive remark.

Implications: I love to study the interaction between companies and consumers… which still relies heavily on interaction between people, in most cases. Someone is a seller or service provider, often working on behalf of an employer (rather than being a company owner or self-employed). Someone is a buyer (whether it is the consumer of banking, groceries, a car, an airline trip).

When the seller or service provider is discontent with recently reduced pay or benefits, does it show up in the form of frustration that will eventually seep into their interactions with consumers?

It seems impossible to think not. I find myself wondering whether recent customer service experiences on my primary airline—and another with a big-box electronics store—have anything to do with disenchanted employees scattered along those company’s labor chains.

Unemployment and layoffs get most of the big labor-related headlines in this kind of an economy. But it’s not the only story in this recession. The Times article stated that there have been more pay reductions than at any time since the great depression. Is there any relationship between the happiness of employees and that of their customers?

Mike Anderson

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