Friday, November 23, 2007

Oops! Sorry, We Didn't Mean It. Could You Come Back, Please?

I wrote about the Circuit City policy earlier this year, the policy of letting more experienced workers go, just to save money on the wages. That policy was based on the workers doing nothing wrong at all, just being "too expensive."

Well, Circuit City has learned that there is a reason why more experienced workers get paid more, and they are now asking them to come back. Please. Pretty please:

In March, Circuit City let go more than 3,000 workers and replaced them with lower-paid staff, a move criticized by analysts who said the loss of the more-experienced employees hurt sales of items such as extended warranties.

Circuit City's "execution remains a significant concern," Sanford Bernstein analyst said in a research note on Wednesday.

Cimino said Circuit City's changes include the creation of a supervisor position for stores and the elimination of shelf- stocking duties for sales associates to give them more time with customers.

The moves have "improved the associate morale in the stores," Cimino said. "We're getting feedback from our customers that they are having a better experience in the stores."

Compare this with what Circuit City did last March:

The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers. The laid-off workers, about 8 percent of the company's total work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the company said.

No wonder that morale went down after that move and that reversing it would be a morale improvement.

Why is it so hard to understand that a sales associate who actually knows the product is an asset to the firm?