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Tough Love is Better Than Tough Luck

The "war for talent" ain't over. The retirement of baby boomers in the next decade alone will create greater employment opportunity than can possibly be met by persons over the age of 10 currently residing on planet Earth.

April 26, 2001
Related Topics: Downsizing, Workforce Planning
In a span of less than a week, USA Today (among others) chronicled thepending layoff of better than 100,000 workers at places like GE, Honeywell,Daimler-Chrysler, and AOL Time-Warner. The public reaction to this doom andgloom? A big, collective yawn.

Simultaneously, investment services firm Charles Schwab, in an effort to holddown expenses and avoid that very same unpleasantness, askednon-customer-contact employees to take a few Fridays off (as paid vacation days)over the span of a couple months. Public reaction? You'd think Charlie had askedfor their next-born children.

Despite some chilly, near-term economic headwinds, some of us manager-typesseem to be losing sight of a couple of inescapable facts.

First, the "war for talent" ain't over. The retirement of babyboomers in the next decade alone will create greater employment opportunity thancan possibly be met by persons over the age of 10 currently residing on planetEarth.

Second, and more to the point of this article, the ultimate winners in thatwar will be those who have zealously guarded their reputations as employers…reputationsthat are shaped not so much in good times, but times like right now, when thewheels are threatening to come off. Am I suggesting that we somehow return tothat failed experiment called lifetime employment? Nope.

But I am suggesting that treating people as an expendable resource, and beingan employer of choice are mutually exclusive. I'm not suggesting that we coddlepeople, either. In fact, if anything, some of us should consider dispensing sometough love.

Recently, a young friend called to wish me happy birthday… the last oneI'll have with a '4' as the leading decimal. After the birthday greeting, theconversation quickly turned to some problems he was having at work. My friendworks for Schwab. It seems that just before the 'vacation' announcement, hismanager had convened a team meeting to let everyone in the group know that --due to a difficult business climate where 4th quarter earning were off about 27%-- some of them might be forced to justify their continued existence with thefirm. His reaction… "Wow, that's pretty harsh, don't you think? That justdoesn't seem right. Do you think I should be concerned?"

I reminded my friend that approximately six weeks before, his company'ssenior management made headlines by acknowledging that, due to a difficultbusiness environment, the executive team would be taking pay cuts ranging from20-50% and forgoing their bonuses. "Do you think it's realistic, I asked,for you and your teammates to continue whistling past the graveyard in abusiness-as-usual mode while the executives are taking all the hits?"Silence on the other end.

In an apparent bow to pressure, both the time off and 'justify yourexistence' messages were subsequently restated in a 'kinder, gentler' way. I wassorry to hear that, because they shouldn't have been. In doing the research for Contented Cows, one thing we found consistently in evidence at 'Employer ofChoice' companies is unabashed candor. One thing they clearly understand is thatdespite the initial shock of bad news, their people would rather read mysteriesthan live them.

No, Schwab had it right the first time. People should know exactly what isgoing on in the organization, they should hear it first from their manager (likehe did) rather than read it in a newspaper, and realize that candy coating themessage benefits no one. Moreover, Schwab management should be credited for atleast trying to use some creativity, and especially for insuring that before thetroops were asked to sacrifice, the officers had bled first, and most. If facedwith similar circumstances, the rest of us could do a lot worse than followSchwab's example.

In addition to the aforementioned Schwab-like efforts, here are a few moreprecepts we believe will help your organization avoid this unpleasantnessaltogether, if you'll only execute them faithfully, in good times or bad:

  1. Spend ten times as much time worrying about the quality of employees beingadded to your payroll as you do the number of them. As Machiavelli said,"The first method for estimating the intelligence of a ruler is to look atthe men (and women) he has around him."

  2. Adopt outrageously high performance expectations, continually 'raise thebar,' and on an ongoing basis, reassign or remove people who don't measure up.As you're going about this, don't allow loyalty to be confused with competence.It's nothing short of cruel to keep people around who don't measure up. Do ithumanely, but do it!

  3. Eliminate every single systemic inducement to adding unnecessaryheadcount. (That's a miserable choice of words, but you know what we mean.)Never, for example, tie anyone's pay, position, or perks to the number of peoplethey 'supervise.'

  4. After doing the first three (above), be as judicious about addingheadcount at work as you are at home.

  5. Finally, don't allow profitability or "affordability" to cloudyour judgment or lower your standards on any of the above, ever… even if you are one of the few remaining dotcoms still flush with IPO loot.

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