Right now, I'm concerned about several challenges we are facing. Up to now, Resource Link has not been fully recovering its costs. Our growth forecasts were often off the mark. Our overhead and compensation expenses turned out to be higher than we anticipated . . – The people at the top [of AT&TI understand that losing money at first is part of building a business, Yet I've committed to stopping the red ink by 1995- We probably can't do much with pricing-we already charge a bit more per hour than our competitors [e.g., outside temporary employment agencies]. So we somehow need to get better control of our costs.
At the same time, we have not been spending all of our training budget and we need to consider investing more in our associates. For example, many associates need more training to help them with their nontraditional role as a consultant. We also have been very concerned about their current skills becoming obsolete. We make a longer-term commitment to our associates than an outside agency makes to theirs- For this reason, we select our associates with extreme care, based not only on their having skills to meet current client needs but also on their ability to develop and maintain their marketability over time. But who should pay for the investment in their continuous development-Resource Link, our clients, or the corporation?
My staff and I have debated the issue of whether RL is primarily a social intervention or a business. At this point, I believe the business focus needs to come first. These days, there is a relentless pursuit of cost effectiveness throughout AT&T and I feel that has to be the driving mindset within RL as well. In a company like ours, to be credible and show that you're not just another HR passing fancy, you need to have a financial objective and show you are making a contribution. We have made a financial commitment and we intend to fulfill that commitment. Not just because my name is on the line but because RL is much too important, too strategic to the company, to jeopardize
I wouldn't say there's a crisis just yet. But we're definitely at a major turning point that requires some decisive actions. I think we now have the right kind of management team in place to do the job. But there are a lot of important decisions to be made to get ourselves into the black and to position ourselves for future expansion.
(AT&T's Internet address is www.att.com)