On the 14th of November 2018 the first expert groups workshop within the framework of the Voluntarily Raising Standards Program was held jointly with the League of Business and Professional Women of Ukraine and FORBIZ | EU4Business, International Technical Assistance Project. The purpose of the Program is a preparation of a general methodology for the development and implementation of business standards applicable to any sphere of economic or professional activity.
An implementation of transparent and higher business standards within a particular industry requires joining efforts of responsible market participants on creation of a single platform for the determination and maintenance of conscious and open competition, implementation of simple services for consumers and business owners, ensuring high quality education, availability of high-quality social advertising and, as a result, unshadowing the economy of the country as a whole.
We assembled business representatives who work in HoReCa, Beauty and Real Estate Industries to determine the basic principles, norms and mechanisms for improving standards, taking into account features of each industry.
During the event, business representatives from Kyiv, Chernihiv, Lviv, Vinnitsa, Kharkiv, Odesa, Kramatorsk, and Donetsk regions were working in the relevant industry groups according to the field of activities sharing their practical experience, key issues and challenges, and existing risks for both owners and consumers, as well as discussing the solutions for addressing the situation and working out follow-up steps.
The list of core issues that all groups have emphasized primarily.
- Significant proportion of the shadow sector, unfair competition leads to high reputation risks and distrust of the sector or industry, as a whole.
- The problem with the personnel is that there’s a lack of qualified staff, caused by significant migration of the population and particularly, youth.
- There’s a low level of awareness about the existing risks upon getting poor-quality products, services, etc.
- There’s a lack of cooperation , no availability of effective entrepreneurial coalitions, business associations to solve common issues and increase leverage to influence. Lack of understanding of the strategy “From Competition to Partnership” is observed.
The groups determined existing challenges and problems, possible solution, and follow-up steps. The results worked out by each group are provided below. You are welcomed to join the discussion, provide justified comments, and add your vision in constructive manner. All this is necessary for establishment of high-quality standards that will fully consider possible risks, will be easy for comprehension by businesses and consumers and will help to create a safe environment for business development and creation of high-quality products and services.
Moderator: Konrad Drozdowski
- Shadow market – up to 60 % of businesses operating without registration, unfair competition for the legal businesses.
- No common standards of service, outdated law, no business strategy especially in businesses financed by shady funds.
- No awareness of importance of professional level of service, lack of skills.
- Lack of employees, personnel not trained properly, no universal system of training and certification applied by a significant part of the market. No loyalty of employees who change work often.
- Customers unlikely to give feedback to the businesses.
- Risk for the client due to the lack of hygiene, unprofessional standard of services, procedures performed in unsafe conditions i.e. nail producers involving sharp tools, shaving.
- Taxation is too high, not enough support especially for small businesses and start-ups.
- Counterfeit products of unknown origin.
- Setting-up a system of quality trust mark for beauty industry, scalable and adaptable by other industries.
- Universal insurance system for beauty industry agreed with major insurance companies.
- Creation of standards of operations for three parts of beauty business: hair dressers, beauty salon, esthetical medicine together with code of ethics.
- There is a need of cooperation on public-private introducing new vocational programs for schools.
- Insurance – creation of a professional fund to compensate clients for unscrupulous work.
- Hotline for consumers to report illegal businesses.
- Provide more information for business and consumers on the risk using unsafe.
- Set-up an industry wide coalition of businesses and associations, possibly forming union of associations. Certification/trustmark system to ensure quality of business standards applied.
- Developing an industry wide information/awareness raising campaign for consumers and business.
- Training for the industry concentrating on business development and marketing.
- Developing a universal industry certification system, so consumers could make choice based on higher standards applied by businesses.
Real Estate Industry
Moderator: Marina Pervushyna
- Lobbying, corruption, “Gray schemes” working with banks. Unfair competition.
- Opacity, lack of transparent rules of the game on the market.
- Lack of performance standards, professional standards, code of ethics.
- Lack of a UNIFIED register of companies and certified market players.
- Professional negative image, caused by many unprofessional “brokers”, that results from a low threshold for the market entry (the threshold is practically absent). Marginalization of the agency environment.
- Small share of officially registered labour relations. Only a small percentage of companies have certain “quality standards for customer service” (evaluation criteria) and plans for their own staff development. Often in companies, there’s a high turnover of staff, lack of loyalty, a desire to make an independent deal that causes a distrust between the employer and employee.
- A client does not understand the essence and value of the service provided.
- Also, a ” professional vector ” is not clear, insufficient attention is paid to the development of professional human environment or automation (blockchain usage).
- The customer has the right not to pay for services he didn’t order. If a realtor wants to work with the client, first he must sell his service (as well as, arrangement on what is included in the service and responsibility).
- Large-scale awareness-rising campaign about client rights and “definition” of agent’s service using all possible tools (for example, a promo video “I did not pay my broker because …”
- “Standard generates trust”. Creating a single standard of activity, in which describes the essence of Real estate services.
- Creation of a professional standard, in which describes WHO and on what GROUNDS does provide a qualification to a realtor. There is a possibility of applying of ISO 9001.
- Raising the level of realtors’ expertise: scaling up the experience of successful companies through BRDO and other law firms. Creating of open and transparent market, attracting donor/international organizations to spread positive experience.
- Revision of existing legislation and demand compliance from relevant authorities. Provide a clarification of the laws in the information campaign for customers.
- Insurance – creation of a professional fund to provide compensation to customers for the provision of unfair services.
- Conduct consultations with lawyers and methodologists, correctly formulate key messages to clients (the client has the right not to pay for a service which was not ordered).
- Contact the Consumer Protection Committee, the Anti-Monopoly Committee of Ukraine, the State Regulatory Service of Ukraine to attract their attention to the issue.
- Develop and launch info and promo campaigns for consumers about positive / negative experiences.
Moderator – Lora Apasova
- Low level of awareness of new HACCP standards (Hazard Analysis and Critical Control Point) – a system for analysing risks, hazards and controlling of critical points. The HACCP system is scientifically based, which makes it possible to guarantee the production of safe products by identifying and controlling hazard factors.
- No standardization system.
- Development of checklists (according to a relevant process) and general recommendations.
- Development of standardization system.
- Development of the algorithm for the introduction of standardization system.
- Third party liability insurance (civil liability of the owner).
- Develop a voluntary business standard / certificate based on HACCP.
- Develop a checklist and recommendations.
- Conduct an information and marketing campaign.
- Negotiate with insurance companies and identify the best opportunities for liability insurance.
- Low level of hygiene/ cleanliness.
- Low level of security.
- Low level of service provision (service standards).
- Use the HACCP standards as a basis.
- Simplify for business owners the requirements of HACCP standards and procedures (including the ability to track deliverables).
- Develop a checklist and recommendations (framework standards).
- Use the HACCP standards as a basis.
- Low level of personal security (fires, fights).
- The threat to health security.
- Moral lesson (comfort).
- Implementation of services standardization.
- Develop basic recommendations.
- Automation of processes, taking and issuing orders.
- Standards of service.
- Tracking the supply chain.
- Hiring and training staff, short-term employment, and problematic staff.
- Violation of standards.
- Owner liability insurance.
- Introduction of HACCP standards (Risk analysis at critical points).
- Introduction of non-financial incentives (organizational structure and values).
- Development of admission and training standards (availability of clear instructions).
- Introduction of protocols (action at critical points).
- Psychological test for staff.
The problem of introducing standards:
- No information availableof information.
- No methodology.
- Lack of control.
- Develop templates.
- Conduct an information campaign.
- Conduct an advertising campaign for those who implement and follow standards.
- Analysis of the current situation.
- Development of basic templates.
- Development of implementation methodology.
- Development of a control methodology.
- Organization of information and marketing support and mentoring (by analogy with the brand).