ATLANTA — Attempts to save labour costs by focusing on part-time over full-time hires brought The Home Depot to the brink of disaster, co-founder Arthur Blank writes in a new book. In Good Company, Blank sets out his case for an honourable capitalism, illustrated with episodes from his own career. Shortly after he was pushed out of Home Depot in 2001, Blank writes, the company began slashing its full-time ranks while pushing recruitment of part-time workers.
Blank told Business Insider that Home Depot had traditionally balanced both types of staff, while providing them the same training. “Customers don’t walk up to an associate and ask, ‘Are you full or part time?’” he said. “If they have on an orange apron, they are expected to answer questions, be knowledgeable and help with whatever problem you’re trying to get resolved.”
The result of the staffing strategy, according to Blank, was a spiral of short-term gains in profits coupled with lower sales as customer satisfaction declined. “It reduced sales, so they reduced labour some more, then it reduced sales some more,” he explained. “Before you know it, you’re doing a fraction of the business you were doing before.”
