Gongol.com Archives: October 2022

Brian Gongol

October 2, 2022

Business and Finance Know your worth

In America's private-sector economy, almost two-thirds of the trade that takes place is counted as service work, with the remaining third consisting of goods. This ratio can be counter-intuitive: We think about "big-ticket" purchases and do a lot of conspicuous consumption via the products we buy. But services dominate, and that condition is the culmination of many decades trending in the same direction. ■ The economy rewards efficiency, and it's easy to track and measure the inputs that go into creating a good so as to strip out the waste and obtain better performance from less raw material. Today's smartphone performs vastly better than a brick phone from 25 years ago, using far less material, and it's only one of countless examples, both inside and outside the world of technology. ■ It's hard to get the same kind of measurable efficiency gains from service labor: Three people cannot play music written for a string quartet, an attentive server can only take on so many tables at a restaurant, and a conscientious doctor can only see so many patients in a day. ■ But service quality can differ by an enormous amount, and it seems odd that we haven't seen more resources committed to independently evaluating it. Consumers clearly care about service quality; look no farther than the popularity of Yelp reviews and Facebook recommendations. But those are amateur evaluations, and they are too easily and too often gamed by those who hope to manipulate the outcomes. ■ Headhunters offer something of a measuring stick for service quality -- impress the right people, and you might get called. But they tend to be inconsistent, since they too rely heavily on referrals and the opinions of those with ulterior motives and vested interests. ■ A market concentrating ever more heavily on service work cries out for a class of independent service evaluators: People who know a service well enough to offer an informed judgment about the quality of the work performed, who can engage with an individual service provider, evaluate the work, and report back on the relative quality (along with particular strengths and weaknesses). ■ When an employer hires "secret shoppers", it does so for its own self-interest. What we haven't really seen is the emergence of a comparable type of evaluator who is beholden instead to the person actually performing the work. ■ Everyone has had terrible experiences with service providers, and a perfectly ordinary response is simply to never return. It's possible to meet the minimum standards set by an employer and still do an unworthy job. ■ But every consumer has also had experiences with service providers who were so good that the natural question that comes to mind is, "Why are you here when you could be doing so much better?" Whereas quality can often be measured with some objectivity when it comes to producing goods, it's harder to evaluate it quite as well for services. ■ But those who deliver really good service work ought to know it, especially if they are under-pricing their work or otherwise holding themselves back from being appreciated and rewarded like they deserve. No Yelp reviewer or corporate secret shopper is likely to tell you "You're much too good to work here for this low a price"; it runs contrary to their own self-interest. ■ The individual who really ought to be moving up and out deserves to know that sooner rather than later, and shouldn't have to wait for a recruiter to catch wind of their reputation. Given how important high-quality service work already is -- and how its value to the economy is certain to grow rather than shrink -- it is a mystery why the economy isn't already crawling with independent evaluators who can offer the objective assessments those service providers need.

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