Challenges of Managing Services

Managing a service based business is complicated through a variety operational characteristics. In this post, I wanted to discuss why and how managing services is challenging.

Compared to their counterpart services are much harder to manage and much harder to keep consistent productivity and quality levels.

Input and Output Variability

Input and output variability is higher and less stable than a typical manufacturer operation.

Loosely Structured Job Duties

Service jobs are often less structured than manufacturing jobs. This is for several reasons. One big one is the sales aspect of service orientated operations. both the typical pay structures, as well as the nature of the agent's responsibility, lend themselves to flexible and agile activity structures.

Customer Relations

Customer contact is higher. Typically services orientated operations have to "court" or service the customer from time to time. Doing this well can help build solid customer loyalty and become a key aspect of a business marketing strategy.

High Employee Turn Around

Services hire many entry-level workers. This is because the employee turnover seems to be much higher than a manufacturing job. Employees burn out and move on. Many new employees just are not cut out for the work. But there is often no clear way to screen applicants so companies need to constantly subsidize the folks leaving with new employees. This is amplified during a growth period for a service orientated firm.

Service performance can be affected by worker’s personal factors. Because employees must often play a part that requires them to be engaged and also deal with customers that are not happy or high maintenance yet the agent must maintain the image that best represents the company. This can be difficult if the agent is having a period of depression or if they are sick or just having a bad day.

Finance and Profitability Variations

The service industry experiences large fluctuations in demand and profitability which are sometimes not anticipated. This makes it hard to deal with complicated financial decisions.

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  1. Going through this now. I manage a small business that is service related and the pay we offer in comparison to what we sometimes expect doesn't equal out. It's hard to find good people and sometimes you have no option but to fill shifts with a body. Sad