Tripping Over Dollars to Save Pennies
I recently read a story posted by CNN about United Airlines (UA) forcibly removing a paying passenger from a flight in order to make room for a non-paying crewmember.
To top it off, every passenger had to disembark the flight while a hazmat crew boarded it to remove blood from the aircraft left by the forcibly removed passenger. Classy, right?
The flight ended up hours late, while video of the incident went viral. Unsurprisingly, UA stock proceeded to drop by one billion dollars.
ONE BILLION DOLLARS. To get a crew member home in lieu of a paying customer.
Another article stated that it cost the airline a cool $250 million in operational losses in one day due to the incident. That’s insane!
Apparently, UA had offered $800 in compensation to any passenger willing bump to another flight. After not getting any takers (and instead of simply raising the offer), the airline made the decision to remove a preselected group of four passengers – one of which was a doctor who refused to leave due to having to get back home in time to treat his patients.
UA “Tripped over dollars to save pennies”
This article came at an interesting time for me. In fact, I read it after fielding a few contractor questions like, “When does mitigating expenses cost me more than just ponying up for what I need to get the job done right?”
Take trying to save pennies on water by supplying it to employees out of a nearby jobsite source, for example. It’s not quite the same, but I got really sick the last time I drank water from one of those water jugs out on the golf course.
After returning home, I Googled why and learned that many golf courses have issues with the quality of water in the jugs on their golf courses.
Basically, if the water and ice isn’t handled or maintained properly by the employees putting it in the jug, it can cause sickness, such as the Norwalk virus among people who are exposed to it.
Suffice it to say, it wasn’t an enjoyable few days for me.
Imagine the lost time and/or liability your company could be exposed to if several employees get sick due to a waterborne disease outbreak from one of the water jugs you supplied them with.
A couple of years ago (and with my golf course experience fresh in my mind), we stopped using water jugs for our people and started investing in bottled water.
We’ve discovered numerous advantages from not providing shared water jugs anymore. Namely, we no longer have to worry about:
- The quality of water source that’s being used to fill the jugs.
- Who is responsible for filling up the jug and putting the ice in it.
- The quality of the ice going into the jugs.
- Keeping track of or the cleanliness of the cups that go along with the jugs.
- Whether or not a jug has set in a jobsite trailer for a period of time causing the water to get swampy. Then, an employee putting ice in it, and serving it to the crew potentially making them sick.
- Employees having to travel a long distance across the jobsites to get to the water jugs. Water bottles are easier to place throughout jobsites. Many of the employees now bring small coolers for the bottles we provide so that they have one when and where they need it.
Plus, we’ve found we can buy water in bulk for about 10 cents a bottle from a local supplier. As it turns out, not having people waste time standing in line at the water jug actually saves us money – even factoring in the added cost of the bottled water.
You have to weigh the costs, benefits and risks associated with business decisions like supplying bottled water instead of a jug or providing a no-brainer incentive to get someone to give up their seat on a sold-out flight.
Think about it – if your refrigerator quit working, would you go buy ice and put your food and drinks in coolers to keep it cool for weeks and months at a time? No, you’d probably find out rather quickly whether or not it could be repaired or replace it with a new one.
The bottom line is that we must constantly revisit each aspect of our businesses and make the necessary changes to improve our bottom lines. Even if the upfront investment comes with a little sticker shock, it still pays to invest in the best practices, equipment or maintaining the proper policies.
There are other ways to Trip Over Dollars While Picking Up Pennies. How about spending big money on training new employees and productivity losses, due to underpaying employees that have left to go to work for your competition?
Wait a minute… This sounds like a good contractor tip in and of itself – stay tuned!