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Service Master Has A Family Of Brands Essay

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Service Master has a family of brands that consist of companies that deliver services to home and businesses include pest control, maid service, landscaping and other services. The company has a high dependence on labor, and this labor must not only be professional in demeanor (quality service) but it must be well-trained and able to deliver the service to a high standard. There are two factors that could potentially increase the company's demand for labor. The first is a growth in the business. There is little opportunity to scale up this business, so any increase in demand equates to an increase in demand for labor at ServiceMaster. It should be noted that a growth in the business can also be met without increasing staff, should staff improve efficiency. Given the nature of the service, it is unlikely that ServiceMaster, if operating at capacity, will be able to improve efficiency much. Another factor that can impact on the firm's demand for labor is turnover/retention. The more employees that leave,...

Mueller and Wohlford (2005) note that the state of the job market in general affects turnover rates as employees in good job markets feel more comfortable moving around, whereas in tight job markets they are less apt to quit. In addition, increasing the retention ratio, the firm is likely to experience some productivity increases as well. This is because new workers are less efficient and more experienced worker will on average be able to perform tasks more quickly than their younger counterparts.
All other things being equal, if the market price for the services that ServiceMaster delivers, this should decrease the demand for labor. The reason is that customers are to some extent price sensitive, so aggregate demand is expected to fall if the price of the service increases. If that occurs, the firm will need fewer professionals to perform the services, assuming that the decrease in business is viewed by the firm as permanent. If it views the decrease in…

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Works Cited:

King, W. (1999). Tutorial on Marginal Utility. Essential Principles of Economics: A Hypermedia Text. Drexel University, Philadelphia, PA. Retrieved May 17, 2010 from: http://faculty.lebow.drexel.edu/McCainR//top/prin/txt/MUch/Eco413.html

Mueller, C. & Wohlford, J. (2005). Evaluating estimates of labor demand and turnover. Bureau of Labor Statistics. Retrieved May 7, 2011 from http://www.fcsm.gov/05papers/Mueller_Wohlford_VIA.pdf

ServiceMaster.com website, various pages. (2011). Retrieved May 7, 2011 from http://www.servicemaster.com/brands.html
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