Email

FROM: Karen Coster, GM - Finance & Administration 

TO: All General Managers 

SUBJECT: Proposed Sales Division Restructuring 

Executive Summary

STAR has been reviewing its NSW Sales Division Structure. The recommendation of the review is that NSW be restructured to conform with the structure of our award-winning WA Sales Office.  

Background

NSW

Our NSW Office has the current structure: 

• Area Sales General Manager
• 10 Sales Representatives
• 5 Administration Staff

NSW Revenue & Sales Generation 

Our NSW Sales Office generates sales reactively. That is, whoever 'cold calls' a prospective client or accepts a postal, email or telephone order deals with that sale from beginning to end. Sales staff may deal with clients from anywhere in the State.  

NSW has generated $10 million in sales this financial year. 

Issues with the current NSW structure 

NSW sales staff have identified the following sales-related issues: 

A	Potential customers' calls are not always answered in a timely fashion
B	Existing customers may deal with different sales staff due to the random allocation of work
C	Follow-up customer satisfaction calls and customer relationship building is not evidenced
D	Advice offered to customers may differ from salesperson to salesperson.

 

WA

Our WA office has the current structure: 

• Area Sales General Manager
• 6 Sales Representatives
• 3 Administration Staff

WA Revenue & Sales Generation 

Our WA Sales Office has structured itself along 'Regional Lines'. That is, one member of staff deals with all orders and potential customers from a particular area or region. Staff are physically located in their sales region.  

WA has generated $15 million in sales this financial year and incurs significantly lower operational costs. 

Issues with the current WA structure 

WA sales staff identified the following sales-related issues: 

A	Sales staff identify with their region and customers and serve clients ASAP due to their working relationship with clients
B	Customers prefer to deal with the same salesperson for repeat business due to trust and relationship development
C	Customer satisfaction surveys indicate high satisfaction due to consistency and quality of service

Benefits

The differential in sales revenue between States is marked, especially given the much larger State economy of NSW in which to generate sales. Financial benefits to the organisation will be a marked reduction in cash and entitlement expenses, such that the organisation will be able to meet all financial obligations identified for the coming financial year. Without this restructure cash flow problems will eventuate, putting pressure on financial resources and requiring debt to be financed.  

Equally importantly, customer satisfaction and quality issues are such that management believes that NSW has the potential to markedly improve revenue if restructured along WA lines. 

Human Resources Impact of the Restructure

It has been identified and proposed that there may be up to four redundancies and two redeployments within the Sales Office associated with the 'Regionalisation' of the Sales team. Staff were consulted and a tentative agreement was reached which has arrived at the above redundancy/redeployment arrangements.  

Issues for consideration that flow from this action include: 

1. The multi-skilling and tasking of staff in the restructured section
2. Ascertaining skill profiles of current staff
3. Identification of skill profiles for staff in the restructured section
4. The issue of expressions of interest in voluntary redundancy to all staff or whether to target staff for compulsory redundancy
5. The division of the State into Sales Regions and the movement of staff to these regions
6. Costs (removal, housing, legal expenses, office rent, etc.) associated with removal of staff to these areas, and office set-up costs
7. Mobility and availability of staff to relocate due to financial, family, social and travel considerations
8. Legislative, Award, Contract and Policy requirements involved in transfer, redundancy and redeployment, as well as associated costs (eg severance pay)
9. Morale and teamwork affects on those who remain (potential resignations due to perception of uncertainty and breach of trust issues)
10. Humanely and correctly dealing with redundant staff (eg the provision of outplacement services such as financial advice, retraining, personal counselling, career development advice, resume and interviewing skills, finding alternate employment for these staff, and so on)
11. The potential for 'unfair dismissal' disputes (and potential reinstatement or compensation) lodged with the Industrial Commission if the process is not handled appropriately

Redundancy and redeployment issues can be complex, time consuming and potentially harmful to the organisation. Care must be taken to ensure we comply with all requirements and best practice to ensure that the organisation builds on the changes to the benefit of all involved.