Attorney: (00:01) Hey partners and welcome to the legal guide interview edition. In this episode, we will be talking about how field employees are the key to increasing your profits and to discuss the topic of field employees. I have brought along my friend, field employee expert Gian Adato say hi Bro.
Gian: (00:21) Hi! Hi everyone. How is it going?
Attorney: (00:24) Oh, okay. And I think Gian, everyone is interested in how field employees can make a major impact in increasing the profits of a business. What do you think the key is?
Gian: (00:38) Well, first of all, It’s, for me, the way I see it, your field workforce are two things. They're both for front liners and they are also your support in a way. So they go there for a lot of reasons. And so I think empowering them is also like, you know, increasing your profits. So it's, for me it's, it's you put emphasis on how they're being productive. Are they being efficient? They would, it would also kind of have a domino effect on your business because when you empower them, you're also empowering your coverage. It also empowers you, your product availability, etc.
Attorney: (01:18) Tell me, you mentioned two things, coverage, and product availability. Tell me how that impacts the operations.
Gian: (01:24) What about coverage?
Attorney: (01:25) Yeah.
Gian: (01:25) but for coverage, probably those to put into example one, a company that we've had ever encountered, they have around 200 field employees...probably say distributors in the field and they go around and for example. Well it goes about, it goes they, they actually have their territorial managers and that's how they're structured in a way. And, um, for example, there are, there are, um, geographical locations or territories that they have at our that seem to have been really in a way, um, fizzling out in terms of sales, in terms of product availability. They have to increase their coverage. They have to, you know, increase their, um, uh, their presence in the area. And that the, when I say that [inaudible] you have to know and assess your product availability in terms of what's working, what's selling, what's not selling.
Attorney: (02:30) As you were telling me this, the picture that came into my mind is a battlefield.
Gian: (02:35) That is correct.
Attorney: (02:35) Guys cover the left flank, guys charge in front with the proper reporting from your field employees, you're able to identify where the manpower is needed. Is that what you're telling?
Gian: (02:48) That's, that's, that's correct. Which brings me to mind. I mean in terms of legal implications on whether you increase your coverage or that there, um, for a company to actually increase their coverage there is there's like you know, is that a company prerogative or is it like...
Attorney: (03;09) You're talking about, the deployment of people. Yes, it definitely is under the Labor Code, that's covered by transfers…
Gian: (03:18) Oh right.
Attorney: (03:18) And transfers or actually one of the benefits or allowances given to the employer. You can actually deploy your people where they are needed for business purposes. So, the question that usually comes up there is, Attorney what if the employee doesn't want to be…
Gian: (03:37) Correct.
Attorney: (03:38) Transferred from place to place?
Gian: (03:39) True, usually the case.
Attorney: (03:40) My general rule is for my clients, as long as it's for a legitimate business purpose, then you are empowered to do that. But to make it safer for my clients, what I do, I already put it in the employee contract that you agree…
Gian: (03:55) Right. I’m going to ask you about that.
Attorney: (03:56) To be transferred from a place, yeah. You agree to be transferred and assigned where the business needs you. The technical term is due to business exigencies.
Gian: (04:04) What if the employee is really adamant about it?
Attorney: (04:08) Oh, funny thing you should ask, because if the transfer is valid and if it's for a legitimate purpose, it's not duly burdensome for the employee. It's actually a legitimate order. And if you choose not to follow a legitimate order, that can be tantamount to willful insubordination.
Gian: (04:29) Okay.
Attorney: (04:30) Employees can actually be terminated for refusing a transfer order. As long as the transfer order is legitimate.
Gian: (04:34) Oh really, Okay. Because I'm sorry, I just remembered something, some, a case before problems or situations before wherein although the employee signed onto that what you were mentioned.
Attorney: (04:50) The employee contract.
Gian: (04:51) Yes. That they are going to be assigned and they don't want to be traveling and being assigned in a certain place, the orientation or the training that he underwent was for this location.
Attorney: (05:06) Okay.
Gian: (05:07) And after the training, so then those expectations were set and he was gonna work in this area. He was immediately transferred to this new location. So what, for him, it was kind of like surprise. He was very surprised. Maybe he had mismanaged you know expectations. And yeah so, I think for that person he had a different goal in mind. Would that be, would that still, you know be covered?
Attorney: (05:45) Yeah, yeah what I said holds too for that one. Even if the orientation was for a specific area, again the employer actually retains the power transfer you wherever the business needed you.
Gian: (05:55) Right, so there was no labor case for that?
Attorney: (05:57) No, no. In fact, there have been numerous supreme court cases decided in favor of employers.
Gian: (06:02) Oh really. Okay.
Attorney: (06:04) That if the transfer is legitimate, then it's, it's a valid order and if you choose not to follow a valid order, it can be tantamount to willful insubordination, which is one of the, just causes for termination under the Labor Code.
Gian: (06:18) So it's really important I guess at the end of the day to you know to orient all or you know, to, to have it, have them on the same page in terms of the coverage in terms of, you know, of their, are they really actually be willing to be transferred. Yeah. So that's one part, but my second point is, then let's go to the more positive, more positive...
Attorney: (06:40) So you've got tired of talking about obligations? Let's talk about something on the lighter side.
Gian: (06:47) The positive reinforcement. Yes.
Attorney: (06;49) When you say positive reinforcement in terms of labor speak, that is incentives.
Gian: (06:55) Yes. That's what I’m going to tell...to ask you about that.
Attorney: (06:57) Tell me a little bit about your experience because you were a field employee before. How do incentives work for field employees?
Gian: (07:03) Well, I'm going to probably connect it with the coverage of tips we've talked about just minutes ago. Um, it's all about just increasing your coverage. When I did increase my sales coverage, I was given an incentive in a way that's commensurate to, you know, probably how much sales I was, I got.
Attorney: (07:27) So, but supposing that you guys agree on a certain percentage.
Gian: (07:31) Yes.
Attorney: (07:32) What's an average percentage?
Gian: (07:34) Well, it depends.
Attorney: (07:35) On the industry.
Gian: (07:36) Yes. It depends on the industry.
Attorney: (07:37) Let's say for example, as a hypothetical example let's say 5%, so increases in sales 5% of that goes to the field employee.
Gian: (07:50) That's right. But you know, um, there are instances that I wasn't able to hit those targets.
Attorney: (07:56) Oh, there were minimum requirements for that? Okay.
Gian: (08:01) Are there any, I mean, does the employee have the right or probably, I mean, what if he wasn't able to hit those minimum targets?
Attorney: (08:10) Well, um, Okay. Let's put this into context. Incentives are an exercise of management prerogative.
Gian: (08:19) To begin with.
Attorney: (08:20) Yes. Basically, these are benefits, which are given above and beyond but are required by the law. So being something that is extra the management actually has the right to impose conditions wherein these have to be complied with before the employee gets to benefit from this incentive.
Gian: (08:41) This is the very enlightening attorney, you don't know what you're doing to me.
Attorney: (08:44) So being a part of management prerogative. Sure. Feel free to set a minimum requirement. So you should be able to sell this amount of volume before this incentive kicks in.
Gian: (08:57) Okay.
Attorney: (08:58) and that percentage kicks in. Can the employee complain? No, because the employee was already getting the minimum. You can only complain about the minimum because that is what you are entitled to as a result of being an employee. But can you be entitled to incentives? Yes. Provided that you comply with the conditions.
Gian: (09:20) Correct. I mean as a business owner, if I'm listening to us, to you right now attorney I mean it gives you a lot of ideas in terms of, because my, at the end of the day, my goal is to increase my sales, increase my profits and I think its we’re talking about right now.
Attorney: (09:35) Yes, how field employees can increase your sales. So, Gian, can you give me some ideas from your experience, from your clients? What sort of incentives work for field employees?
Gian: (09:50) Well, aside from increasing their sales, sales coverage, well that's really a given minimum for example 5%. There's also an increase if there is an increase in sales for this, this specific district or area...
Attorney: (10:10) Or you open up a new district.
Gian: (10:11) That's correct. if there were new client acquisition.
Attorney: (10:14) How do you guys call that in, in your industry? Opening a new territory?
Gian: (10:19) Well its. Yeah, new territory, new sales territories, new accounts, new client acquisition, new clients to the new business.
Attorney: (10:32) Is that hard to do? Can you share with me, because from a legal perspective, it's all about creating the policy which would govern that but from the experience itself? Can you share some stories about opening up a new sales category or territories?
Gian: (10:46) Well, I'm sure I, lots of salespeople will relate to me on this one. It is really hard. I mean, I guess it's, it's harder if you don't have like a system in place. It's harder if you don't have incentives in place. But I'm getting a new client or getting a new territory for that matter is even harder, I guess. Because if you get the new client, you have to, you know, it's all about education and it's all about, you know, introducing your products, especially if you don't have any idea to they don't carry your products yet.
Attorney: (11:21) It's the first time they've seen the brand.
Gian: (11:24) Yes, the first time they've seen the brand, It's very crucial. You have to, you know, for salespeople they have to do a lot of representations as well and you know just to you know …
Attorney: (11:33) When you say representation, define representation.
Gian: (11:35) Oh you know, dinners, lunches…
Attorney: (11:39) Coffee.
Gian: (11:40) Coffees, a lot of those. I guess, a lot of people, salespeople would relate to that, but it's really difficult. But since it's part of my KPI's expected, expected to meet to close new accounts, especially if I have targets to meet...
Attorney: (11:44) It’s difficult but we have to go through there.
Gian: (11:56) That's that. That's right. But as a, for example, as a business owner, that's really a crucial index for me to do really grade you, sort of grades you or your performance because it would also be very crucial to my business as a whole because you're, you're opening up new business for me. So…
Attorney: (12:22) So even if it's hard,
Gian: (12:23) Even if it's hard.
Attorney: (12:25) The management would really push…
Gian: (12:28) Yes.
Attorney: (12:29) To make it happen, whether it be through incentives…
Gian: (12:30) That’s right.
Attorney: (12:31) or providing the right tools. And I think one of the biggest tools that salespeople opening up a new territory would love to have is a reporting tool. A tracking tool that way they can validate whether they are entitled to certain incentives because supposing the incentive makes it a point that "Oh, you should visit at least five clients a day or you should be able to submit this amount of reports so that you can alert HQ as to what kinds of products are in demand here.
Gian: (13:03) Yeah. Well, for some companies there are two types of how you're measured. You have your KPIs and you have your KRAs. Your KPIs means your key performance indicators.
Attorney: (13:15) What’s an example of a KPI?
Gian: (13:17) Well, it's basically how you do things. I mean basically, what type of, what, how much effort you'd be put into in closing a business for example and…
Attorney: (13:28) Give me a specific KPI.
Gian: (13:31) For example. How many clients, the number of clients visited that number of lead, number of leads generated...
Attorney: (13:42) Supposing you put up a booth somewhere, how many leads you get there.
Gian: (13:46) Yes. And just basically how much effort you put into that. And the KRA is the key result actions are basically the results of your output came from the KPIs.
Attorney: (14:00) So it doesn't matter if you generated a hundred leads. but at the end you weren’t able to close any of them.
Gian: (14:06) that's right.
Attorney: (14:08) That's why these two have to go hand in hand.
Gian: (14:09) Yeah. And it depends on the companies. Um, how much weight they put in, in their KPIs versus their KRAs. And I'm speaking for myself and then from my experience, yeah.
Attorney: (14:20) Uh, as for myself, speaking from the legal side, uh, legally the legal basis for establishing KPIs and KRAs that's again, Management Prerogative because you're trying to govern how you are managing this aspect of their employment.
Gian: (14:40) Right. Because, um, at the end of the day, I'm putting a lot of cost in spending for my employees. Um, uh, you know, and if for example, the, I put, excuse me, much expense in sending them on the field. So I'm expecting...
Attorney: (14:55) you're paying for gas, you're paying for lodging, you're paying for the food.
Gian: (15:00) And speaking of, there's also, there's also, there should be a way of kind of also monitoring how they spend the the expenses for example, like the gas allowances.
Attorney: (15:12) I think that should be part of the reports.
Gian: (15:16) Yes. It should be part of their reports. Much I know that got me thinking, what are probably the legal consequences of not being able to, you know, to uh, you know not being able to report the correct amount of expenses? Does that make sense?
Attorney: (15:39) It would depend on the intention, as legal I would have to investigate whether it was a result of trying to mislead the company or whether it was out of negligence because that would determine the legal ground for disciplinary action. In Filipino, gusto mo bang lokohin or naging pabaya ka?
Gian: (15:59) Right. But well the good thing is there are you know, systems right now in place to actually,
Attorney: (16:06) I agree and I think your application would be able to handle that. So, so just to recap everyone, this is what we learned today. We discussed how field employees would be able to help you increase your profits and that's through providing the right information. What sorts of products are in demand at a certain venue? What venues need attention or what venues can be opened up. And as well as validating incentives, whether the field employees should be entitled to certain incentives as a result of validating their performance versus the KPIs and the KRAs. Is that a good summation?
Gian: (16:44) That is very good.
Attorney: (16:46) So guys, if you, if you would like to increase the performance of your field employees by giving them the right tools, I invite you to try out kustom360. It's a mobile application and as Gian has mentioned before, we now have a promotion for legal guide. We now have a PR, and as I mentioned before, we have a special deal for legal guide listeners and readers. A kustom360 was nice enough to create a free trial for our readers. You just have to go to www.legalguide.ph/kustom360. That's custom with a K. So if you sign up there, how many days did they get the app for free?
Gian: (17:44) They get 30 long days.
Attorney: (17:46) 30 long days, I think that's enough time to be able to see how their field employees can increase their sales. That's correct. Anything to add bro?
Gian: (17:53) Well, I'm just really grateful for this opportunity. I guess it's at the end of the three episodes we’ve had, I'm just really happy and thankful for this discussion. I think there's more to it and that we can explain.
Attorney: (18:05) Let's see, let’s see. The feeling is mutual. I am very happy that you were able to share your actual experiences in the field with my listeners and my readers. I think they would be able to pick up a lot of things from there and implement it in their own systems. Yeah, so that's it for this episode, guys. I hope we were able to simplify this enough for you to be able to help you make better choices. See you in other episodes.
