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Dealing with the Recession – the Spanish way

Dec 19, 2012
An interview with Inter S&R, Spain.
Wherever you are in the world your business will have been touched by the worldwide recession.  In some countries, such as the UK, we think we have had it pretty bad.  But elsewhere the effects have hit even harder. In this interview with Àngels Gallardo and Catherina Stier, International Director and Manager for Inter S&R in Spain, Steve Jordan looks at some of the decisions they have had to make to keep the business healthy.

Inter S&R was started 20 years ago M. Dolores Martinez, Àngels Gallardo’s mother.  She had been working in the industry for some years, including with Interdean in Spain, but the time had come to start a business of her own.  She still owns and runs the company and is involved every day.

The company originally started in Barcelona then opened a branch in Madrid ten years later.  The offices in Barcelona are still bigger than in Madrid but more crews run out of the capital.  In 2005 the company opened an office in New York to service enquiries from Spanish people, mainly those working for government agencies and multi-national companies, who wished to move home. 

Àngels joined in 2004 at a time when the Catalan government were encouraging companies to become more international.  She spent five years in New York, returning to Spain only after the birth of her son and when the office was then established.  “We started in a rented office in the Catalan trade centre in NY before moving into a Business Centre,” she explained.  “It is just a sales office with all the work being sub-contracted to partners that we have chosen very carefully.  It’s just a point of contact for the Spanish community in Spain.”

Catherina joined the company in 2006 and has enjoyed the business ever since.  “I like the people and the fact that every day is different,” she said. 

Working with the recession

Àngels explained that when the recession hit in 2009, things had to change.  “At that time we were running with around 55 people.  We had to make cuts and had to work twice as hard to get the same amount of business as before.”  The company now has around 40 people employed.

Part of the problem was that Inter S&R’s corporate customers changed their objectives. “Before they just wanted a smooth stress-free move,” Àngels explained.  “But they had to cut costs themselves so their main goal was to keep the cost down. The quality of the service became less important.”

The competition changed too.  Many moving companies started to cut corners to cut costs.  “I don’t know exactly what they are doing but I know the prices they charge and there is no other way to do it. One way is to use more temporary staff.”

Not only are moving companies cutting costs but there are more competitors entering the market too.  “We are seeing more people come into the business from other areas of the industry,” explained Catherina.  “Courier services, cleaning companies, even shipping lines are all offering removals services now.” 

It would have been easy for Inter S&R to follow the market down and, to come extent at least, its margins have been squeezed.  But they have made a stand when it comes to the quality of the service.  “All our crews are on the payroll and all our vehicles are inspected and legal for the road,” explained Catherina.  The company has also avoided the temptation to follow any business at any cost.  “If people just want to load a container themselves we suggest they go direct to the shipping line.  We don’t want to get involved with that side of the market. We have to keep our level and our standards to ensure that we will be here long term.  Maybe we took the difficult way.”

Maybe they did, but Inter S&R did make a stand and have already seen improvements.  2009 was very bad, 2010 and 2011 were better, and so far 2012 has shown continued improvement. “Nobody likes to have their salaries cut and in the sales department we have been working harder than ever before to find the work: more travelling, longer hours, more agency visits,” said Catherina.  “But the motivation is huge.  Everything is now more urgent. Most of the staff feel the same way.”

“We are already stronger because we have had to do these things.  I see now that we were too comfortable before,” said Àngels.  “When we knew we had to make cuts we all accepted that we needed to change the way we get paid rather than let more people go.” 

The on-road staff have been hard-hit too although in a different way.  There was a time when there was plenty of overtime but now many of them are on reduced hours. “In some ways it’s harder for them,” explained Catherina.  “They don’t know how hard we are working to get more work or what might be just around the corner.  They just have to wait for the work to arrive.”

But over the last 20 years the owners have shown respect for their workers and some have stayed loyally for many years. They try to create an atmosphere of support in which everyone works together for the same aim.  “They are worried about the future but they know we are all in it together. What happens to them will also happen to us all.  I don’t think they blame us.”

In fact that loyalty extended even to those people the company had to let go.  When they left they were all given letters promising them their jobs back as soon as the company was hiring again. 

The company has rejected diversification, preferring to stick to its core business and focus all its energy on what it does best.  “We’ve all accepted that this is the way it’s going to be for the foreseeable future.  We are not going back to 2008.  That’s fine with us.  We have to work harder of course, but we are doing OK.”

Left to right: Elisabeth San Nicolás, M. Dolores Martínez, Catherina Stier, Miriam Acedo and Mari Carmen García

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