By Lily Adman
In today’s fast-paced business landscape, the allure of shortcuts is a strong one! Both competition and costs are high, and the desire to streamline processes and increase efficiency is ever-present. Whether through AI and automation, transitions to remote work, or general budget cuts, shortcuts are everywhere.
The money-saving mentality has become more prominent in recent years, with tough economic conditions. COVID, trade barriers, and the NI and minimum wage increases all play a part. Initial cuts and changes were made out of necessity; however, the approach to businesses has been fundamentally altered since, with many business owners “paralysed by fear” due to geopolitical and economic uncertainty. With continued instability, businesses are pre-emptively cutting costs and stockpiling cash for future changes and emergencies.
Although rarely introduced with malice or poor intentions, cuts can have detrimental effects on business, particularly as they often remove elements of human touch, which are already so scarce! Let’s look at some of the most common shortcuts and assess their effects.
The Most Common Cuts
Downscaled Customer Service
Downscaled customer service is one of the most common yet damaging shortcuts taken by businesses. Since COVID lockdowns, customer service departments have taken a hit, with some businesses extending deadlines for complaint resolution and others replacing departments altogether with chatbots and AI helplines.
While chatbots and AI may seem convenient, they too often come at the cost of user experience, customer service, and ultimately, repeat custom. There is nothing more frustrating than reaching out to a business for help, only to be hit with an ineffectual AI chatbot, programmed with limited answers that are unable to solve your unique problem.
Although intentions may be pure, these “revolutionary” chatbots appear to prevent businesses from addressing genuine customer complaints. The result? Customers are left frustrated, dissatisfied with their service and unheard by the brand in question. Despite cuts saving money in the short term, the long-term effects on revenue are shocking. According to research from the Financial Times, UK businesses lose £12 billion every year due to poor customer service. Ultimately, these cuts demonstrate a fundamental misunderstanding of customer values and a lack of value for customer loyalty. When customers receive great service, they are more likely to make more purchases and leave good reviews. And, in the current economic climate, these factors should be a priority.
Home Working
Transitions to fully remote work are another shortcut to consider. Home working environments may offer great flexibility for employees, but a fully remote office can be problematic for productivity and skill development. According to Stanford’s Institute for Economic Policy and Research, fully remote work is actually associated with 10% 20% lower productivity than fully in-person work.
Remote work is popular among both business owners and employees. It reduces overhead costs by eliminating the need for office space and provides employees with advantages such as greater flexibility, no commuting, and a better work-life balance.
While remote work has undeniable benefits, it significantly hinders communication, efficiency and productivity. When a problem arises in person, it can often be resolved in mere minutes, whereas at home, communication barriers could mean it takes hours.
Often overlooked in the working-from-home debate is the impact on young professionals. According to The Recruitment Co., only 57% of young professionals feel they are well-equipped to do their job effectively, as remote work allows less exposure to the wider business, fewer learning opportunities and less exposure to invaluable feedback. Therefore, despite the appeal of remote work, it’s clear that in-person/ hybrid environments foster better collaboration, efficiency, and overall success for businesses.
Subcontracting
Another overlooked shortcut that may be negatively affecting business is subcontracting.
Many subcontract elements of their service to third parties, as it is one of the most efficient ways to scale or descale workforces, provide temporary cover and cut costs. The practice has become commonplace in business, particularly for seasonal work, as it is convenient and keeps costs low; however, it is not risk-free.
Maintaining quality standards is the first challenge. With internal work, it is easy to ensure adherence to quality-control measures and project timelines. With third parties, you simply do not have the same control.
Communication breakdown is another challenge. When subcontracting, you may hire one business to do a job, which in turn subcontracts to another and so on. The person who actually completes the job is often so far removed from the project, the initial communication has been lost, which can leave finished results far from the initial brief.
But what effect does this have on business? Unless you’re working with a reliable long-term partner, subcontracting is likely to jeopardise your brand reputation and quality control. It’s not a shortcut worth taking.
Large Corporations Set the Tone
While shifts in business practices may be prevalent across the globe, it is large corporations that set the tone. Amazon, Google, and even Turnitin are among the many corporate giants that have replaced their customer service departments with AI chatbots.
With major companies prioritising efficiency and cost-savings over personability, it is increasingly difficult for SMEs to go against the grain and invest in the personal touch.
SMEs Fight Back
Though the temptation to strip and streamline processes is strong, many are maintaining their values and personability.
One Poole-based company, Quadrant2Design, which designs and builds exhibition stands across Europe, has remained transparent about its commitment to in-person working, in-house team, and value for customer care. Based on their outstanding reviews, their decision is paying off.
Marketing Manager, James Vicefield, shares:
“In the exhibition industry, we only get one chance to execute a project successfully. Our commitment to in-person and in-house working is non-negotiable; it allows us to maintain contact and open communication from the project’s initial concept to its completion. We believe that subcontracting poses significant risks and undermines our responsibility to protect our clients’ brand reputations. Therefore, we have made a firm decision never to subcontract.
Likewise, we place great value on customer care and the importance of human interaction. Day by day, we witness the increasing significance of personal connections at business shows and events. Despite their evident value, they seem to be diminishing in business. That’s why every client has a dedicated Project Manager to guide them and support them throughout the exhibition stand project.
Finding the Balance
While temptations to cut costs through shortcuts are appealing, it is important to consider the long-term effects. Downsizing or removing customer care helplines, transitioning to remote working environments, and subcontracting service elements may create short-term savings, but at the cost of customer satisfaction rates, quality and even employee development.
It is clear that the businesses that prioritise these aspects by investing in their team, offices and service, reap the rewards, through their outstanding reviews and customer loyalty. As more and more businesses strip these elements, those who maintain them will only stand out more.
