Article “Increase Profitability by Boosting Your Investment in Continuous Improvement” by Gregory Jerralds is devoted to the importance of employee development. Jerralds has over 20 years of experience in leadership and he argues that increasing employee spending is the most effective strategy to reduce operating costs. Despite the personal tone of the writing, issues raised in the article are timely and vital.
Any company of any size is continuously looking for opportunity to reduce operational costs. Jerralds warns managers that reducing employee training and development is not a solution. On the contrary, the author urges companies to pay more attention to human resource development as employees are the most valuable assets.
The first impression about the article is logical flow of ideas. Jerralds starts the article with the statement of the problem (it is wrong to cut employee development costs), then provides an example to support this statement (investment in employee development generated annual profit of 150%), and concludes with the short overview of areas which can be improved through investment in employee development programs. Moreover, the language is understandable to an average reader. Businessmen as well as students will find the article interesting to read.
Nevertheless, Jerralds fails to address external factors impacting company’s growth and success on the market. While employee development is undoubtedly important, there are many factors that are beyond managers’ control. Jerralds, on the contrary, outlines the necessity to invest more internal company development without giving any credit to external factors. In general, the advice is viable and deserves consideration.
However, small and middle size companies may find it ineffective to focus on internal development as a way to cut operation costs. Jerralds noted that “senior executives target other budget categories, but headcount generally has the greatest influence on a company’s operating expenses, particularly in large production-oriented businesses”. In this statement, Jerralds shifts the focus from service industry to production business. Customer satisfaction and increased sales are not highly relevant to production industry.
In addition, it is not clear why Jerralds states that middle level managers never seem to have enough employees to meet the demands of the business. Moreover, the author argues that managers often sacrifice budgeted funds in employee development. Nevertheless, this statement is not supported with any evidence or statistics. There is no reference to specific industry or company. Thus, it is possible to say that the whole article is based on the personal opinion of the author. Even though Jerralds has more than 20 years of leadership experience, the credibility of the article suffers greatly from the lack of support.
On the other side, the example provided in the middle of the article is rather strong. Jerralds includes several quotations (words of Vice President, in particular) to support his own opinion on the issue. However, it is not clear whether the company stated in the example does exist or is purely hypothetical. At the same time, the statement that managers have to get creative is universal. Many researchers as well as theorists point out that creativity is a driving force behind company success. Seeking non-standard solutions to problems such as the need to cut operation costs is a key strategy of success-oriented companies.
Focusing more on the initiative by Lauren, Jerralds mentions that the decision to maintain investment into employee development was based on the favorable results in the part. Nevertheless, Jerralds does not address this issue in detail. Companies should not rush into firing existing employees and investing more into remaining workers if the company did not try this option before. The decision to dismiss several employees may create fear of dismissal among other employees. Resulting lack of security may decrease motivation. Ultimately, employee development will not contribute to company success and may even contribute to costs. Nevertheless, Jerralds does not refer to this side of dismissal advice.
Despite the gaps in arguments, Jerralds does provide some interesting insights into cutting costs dilemma. In particular, he notes that employee development has positive impact on customer satisfaction and quality assurance ratios. Carefully planned investment in employee development may contribute new business growth without adding more employees. Moreover, Jerralds stresses that the decision to lower operating expenses by delaying employee development programs is often accompanied with substantial increases in customer dissatisfaction, decrease in product and service quality as well as downward trends in employee satisfaction and productivity. While the negative consequences of eliminated employee development are logical, Jerralds does not show how these factors are related.
Jerralds notes that properly trained, led and inspired employees have the potential to save companies more than they actually cost them. Effective strategic plan and investment in technology and employee development help companies realize sustainable gains in profitability, retention and customer satisfaction. Nevertheless, investment in employee development should start with the careful evaluation of employees and their abilities. Moreover, it is a good idea to ask employees for their opinion.
In summary, the article contains useful advices to managers who realize the importance of cutting costs to maintain competitive advantage. Jerralds argues that eliminating investment in employee development cannot be justified as negative consequence may overweight the savings. Constant improvement through employee development is a viable recommendation that does not require additional spending. The article concludes with a list of benefits associated with employee development.
In particular, Jerralds writer that employee development contributes to increased sales, improves cash flow, raises customer satisfaction, and drives down the costs of doing business. There are many ways in which companies can generate additional profit.
“Increase Profitability by Boosting Your Investment in Continuous Improvement” by Gregory Jerralds is a well-written article that contains low-cost recommendation on how to improve productivity through effective employee development. The professional experience of the author and supporting example contribute to effectiveness of advices. Nevertheless, lack of statistics and supporting arguments turn the article into opinion-based paper.
The structure of the article is logical and arranged thematically. Each paragraph flows logically from the previous ideas. Conclusions reached by Jerralds deserve closer analysis; however, more evidence is needed to support statements and claims.