Pawnshops need to be proactive about raising productivity and their employee’s skills

A lunch break at the training session for JPA Pawnshop in Tarlac Province

Last week I posted on a report in the Philippine Star that highlighted the mismatch of skills of the unemployed and the skills needed to fill the new jobs the economy is producing.  In the story, Labor Secretary Rosalinda Baldoz characterized the situation like this: “Jobseekers have difficulty finding jobs because they possess skills that are not needed by companies.”

(Click here to learn more about the Philippine Star story.)

In my earlier post I said that this dilemma may have brought Philippine pawnshops to a crossroad. Pawnshops in the Philippines are growing and while there is a high unemployment rate the simple fact is the skills needed to fill positions in the growing pawnshop industry are unlikely to be found in the ranks of the unemployed.

So where will the worker come from to fill the news jobs.It is easy to suppose that pawnshops can lure employees away from each other but that does not address the basic imbalance that there are more jobs in the pawnshop industry than qualified applicants.One solution to the problem is application of technology within pawnshops in order to run a more efficient operation. Technology is always going to be a part of the solution. In one example computerized software can make an impact on productivity. Another critical example is analytical devices like precious metal testers and diamond that can make assessing quicker and more accurate at the same Time. This type of productivity improvement is always going to be part of the solution.

(Click here to see the MIM Pawnshop Skills and Services “Pawnshop Tool Catalog.)Training the successful JPA graduates

After productivity improvement come the basic skills of the employees themselves. First, when employers add computerization and precious metal testers to businesses employees have to run the computers and the testers.

There will always be a manual component to jewelry assessment. My field experience also tells me there is already a problem with pawnshops using faulty procedures to assess gold and diamond jewelry. This can be disastrous for a pawnshops profit margin. Proper loan values cannot be determined without an accurate assessment.

(Click here to see the MIM Pawnshop Skills and Services Skill Courses.)

In the examples above the skill set of the employees are critical. If a pawnshop industry is going to grow and thrive the problem of skilled employees has to be addressed.

Earlier this week the Wall Street journal published a story that shows this mismatch of skills between the unemployed workers and new economy jobs is not unique to the Philippines. It is also characteristic of the economy in the United States. There are two important aspects to the story that I think are applicable to the Philippine pawnshop industry. It shows that a lack of skilled employees can impact a business’s growth, sales revenue and bottom profits. It also showed what some companies there are doing to overcome the problem.

At Mechanical Devices, which supplies parts for earthmovers and other heavy equipment to manufacturers such as Caterpillar Inc., part owner Mark Sperry says he has been looking for $13-an-hour machinists since early this year. The lack of workers is “the key limitation to the growth of our business and to meeting our customers’ expectations,” says Mr. Sperry. He estimates the company could immediately boost sales by as much as 20% if it could find the 40 workers it needs.

Trips to several job fairs yielded almost nothing, so the company set up a 10-week training program to create its own machinists. Out of the first group of 24 trainees, 16 made it to graduation.

(Click here to learn more about the Wall Street Journal story.)

The first thing to note about the case above is that a lack of skilled employees is costing the company, Mechanical Devices, 20% in sales revenue. I believe it is not going too far to say that could also be the circumstances the Philippine pawnshop industry.

The second thing to note is that the company is now proactively combating its crisis by setting up an in-house training program. That is what I promote and that is what my clients are doing. It may be the only way out of this situation.

If you own a pawnshop, do not be caught short of productivity improvements and skilled employees. Be proactive and solve the crisis before it affects your profit margin. If you are in need of answers contact me and I will work with you to improve your productivity and help you to set-up in-house training programs. My consulting and training programs are the best in the country and are designed to make your pawnshop a success.

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