4 Signs Bad Employees are Losing Your Logistics Business Money

A bad employee can have serious consequences in any company, but especially for logistics businesses. From low productivity to inefficiencies, communication issues, loss of cargo and more. The inability to properly hire and retain the right people has a direct impact in the organization and its customers.

The average cost of mis-hire can be six times base salary for a sales rep, 15 times base salary for a manager and as much as 27 times base salary for an executive. Source: The High Cost of Mis-Hires

It is no secret that personnel costs are among the highest operating costs for a supply chain business and making the wrong hiring decision (especially in leadership positions) can cost companies hundreds of thousands of dollars.

The challenge here is that most of these losses are silent killers because for the most part the cost of bad hires is not reflected in profit and loss statements or easily calculated on a return on investment (ROI) analysis.

Well then, how do you know if your business is suffering because of bad employees? Here are 4 signs you’re hiring the wrong people for your logistics business.

1. High Employee Turnover

This is probably the clearest sign that your business lacks a well-thought hiring process.

We all can agree that roles like warehouse clerks are (for the most part) high turnover positions. But if your business is also experiencing high turnover rates outside of your warehouse (i.e. management, customer service, etc.) your company is definitely experiencing the effects of inadequate hiring.

There are things that can be done from a hiring perspective to improve this situation. One way to ensure you are hiring the right person is to get multiple people on your team involved in the hiring process. The more opinions you have the better your decision can be.

2. Frequently Lost Cargo

If your cargo is frequently going missing, then it’s time to look closer at what is happening.

It’s important that during the hiring process you take any and all possible actions to mitigate the possibility of theft. Perform background checks, contact former employers, and ask the right questions during interviews to reduce the chance of hiring dishonest employees.

An interesting statistic was discovered by CargoNet, a company specialized in preventing cargo theft. They report the top three locations representing 53% of all cargo theft are trucks stops, warehouses, and parking lots.

Source: CargoNet [Infographic]

3. Low Employee Morale

Another way you can tell if your company is stacked with bad employees is low morale.

Low employee morale creates an unpleasant work environment. Instead of employees working together towards a common goal they are finger pointing, have negative attitudes, and a lack of accountability. Eventually the environment becomes unproductive and employees count the minutes until clock out time.

If there is a lack of trust among employees this could be another sign that you might not be hiring the right people. When there are trust issues among your employees communication, honesty, and team participation suffer and ultimately your customers (and company) suffer as well.

Once it starts to affect customers, they’ll see your company as an organization that makes it a headache to move their cargo and will no longer bring you their business. Which brings me to our final sign of a poor hiring process affecting your business.

4. Poor Customer Service

When hiring for customer service you should always ask yourself one question: does this person

have the right traits for customer facing work?

Your customer’s experience with your company needs to be exceptional at every point, especially customer service. Not everyone is cutout for customer service, so it’s important to hire the people with customer-centric personality traits.

For a small or mid-size logistics business, having an exceptional customer experience is one of the most important differentiators and advantages you have over larger competitors, who move more cargo and offer deeper discounts.

Hiring the wrong people has devastating effects on the quality and personalization of your services and the treatment your customers receive.

Some of the practices of poor customer service include:

• Not replying to customer emails in a timely manner (or not at all)

• Not proactively preventing issues affecting services

• Failing to see things the way your customer sees them

• Not paying attention to customer requests and directions

• Use of condescending and inconsiderate language

Hiring employees that do not have the right personality traits to represent your company and the quality of customer service your customers expect from you is opening the door to losing business. A company’s reputation is directly influenced by the relationship between employees and customers.

Understanding that a poor hiring process might be affecting your supply chain business is just half the battle. You must take the steps to bringing (and keeping) the right people in your company.

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