InformationWeek: The Business Value of Technology

October 16, 2000

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The Wilder Side:
Working The Employee Economy

HR managers and marketing executives have a lot to learn from each other

By Clinton Wilder

t last month's InformationWeek fall conference in Tucson, Ariz., my colleague Diane Rezendes Khirallah moderated a panel session on the IT workforce. The topic--how to attract and retain the best employees and keep them happy--is arguably the No. 1 challenge facing IT departments, E-business groups, and dot-com companies.

But something else about the discussion had a familiar ring. I was hearing virtually the same phrases and advice that I hear from marketing and customer-service professionals in talking about the challenges of today's Customer Economy. Just substitute the word "customers" for "employees," and it becomes clear. Attract them, retain them, and keep them happy. (And if you can steal them from the competition, so much the better.)

So I wondered: How much correlation is there between enlightened, successful workforce management and good customer service? Are companies that are good at one necessarily successful at the other?

A traditionalist might say it's apples and oranges. How can you compare the people you pay with the customers that pay you? Employees are cost, customers are revenue. A healthy bottom line comes from getting as many as you can of the latter with as few as possible of the former. Human resources (reporting to finance) takes care of the workforce; marketing (reporting to sales) worries about the customers, and never the twain shall meet.

However, the New Economy is turning that time-honored model on its head. Customers are recognized as a big-time cost--just ask Amazon.com. Investors and analysts can argue late into the night about when Amazon.com should turn its first profit, but it's the online retailer's high cost of customer acquisition and retention that creates that debate. And that's true for any Web-based consumer business, whether a pure-play dot-com or a traditional brick-and-mortar Web channel.

Meanwhile, talented employees--and not just sales staffers--are increasingly being viewed as revenue producers. Although technology companies have been chanting "employees are our greatest asset" for years, the Internet Economy has turned that into undisputed truth for any company that does strategic work on the Web.

An Old Economy company offers one strong example of the correlation of workforce management and customer service. United Airlines' woeful summer of mind-boggling delays and cancellations occurred partly because its pilots, mired in a contract dispute, refused to work overtime. Bad employee relations translated into bad customer service.

That's just one direct example. More common is the indirect effect--employees who aren't happy in their jobs are a lot more likely to take it out on the customers. That's just human nature.

The point is this: Recruiters and HR managers and marketing and customer-service executives have a lot more to learn from each other than they probably realize. Applying for a job and buying groceries can be done in the same way--with a mouse click--and companies need to understand that job seekers and grocery buyers have a lot in common. They need to be appreciated, responded to promptly (especially if they run into a problem), and treated with respect. I know that sounds more like Stuart Smalley than Peter Drucker, but not enough companies have thought this way.

In one of those great back-to-the-future twists that always amuse me, IT managers may be the best-qualified to take the lead on this point. Back when IT--excuse me, data processing--meant the mainframe, the glass house, and the pocket protector, company employees (aka users) were commonly referred to as customers or, perhaps, internal customers. That type of thinking was later vilified, somewhat rightly so, for building the proverbial wall between business and IT that progressive executives spent years trying to knock down. But in theory, at least, the idea of thinking of employees as customers was ahead of its time.

You're competing in the Customer Economy, but it's also the Employee Economy. Customers and employees have much in common. They're more demanding than ever, because both know they're more in demand than ever. So, embrace it. Send your HR recruiters to Web marketing conferences and your marketing reps to employee retention seminars. Get them talking to each other. More than ever, they're on the same team.

Clinton Wilder, InformationWeek's editor at large covering E-business, can be reached at cwilder@cmp.com

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