I hope that adage applies to the topic of people management at the outset of 2010.
As you may have seen in my editor John Hollon’s blog, Americans’ job satisfaction is the lowest it has been since The Conference Board began tracking it in 1987. The survey of 5,000 U.S. households found that only 45 percent of respondents said they are satisfied with their jobs.
“The drop in job satisfaction between 1987 and 2009 covers all categories in the survey, from interest in work (down 18.9 percentage points) to job security (down 17.5 percentage points) and crosses all four of the key drivers of employee engagement: job design, organizational health, managerial quality and extrinsic rewards,” The Conference Board said in a statement.
All the gloom isn’t surprising. Amid the dismal economy of the past couple years, companies have made tough cuts and behaved callously toward employees. But it goes beyond the recession. In the past several decades, businesses have generally moved to more of a transactional relationship with workers, one in which employees have come to be seen as largely disposable. To some extent this may have been necessary thanks to the growth in global competition.
But American workers by and large haven’t loved the rise in insecurity, and the shift can be seen in The Conference Board’s data. It shows a fairly steady decline in satisfaction since 1987, when 61 percent said they were satisfied with their jobs.
The loosening of ties with workers and shift of risk onto individuals has worked for many organizations. It has translated to lower costs and higher profits.
But I believe this low-road route is coming to a dead end. The evolution of the global economy is conspiring to reward high-road companies. Among the forces in play are the shift to high-value work in developed nations requiring inspiring management, growing social solidarity with people across the globe and the explosion of interactive technology. Web 2.0 sites and a culture of personal participation mean that workers are also Twitterers, Facebookers and Glassdoor.com users—increasingly they will expose mean-spirited or ill-advised treatment of employees.
The push for better treatment of employees is part of a broader call for more corporate social responsibility. People are demanding that companies be worthy of their best efforts as workers, of their business as customers and of their dollars as investors.
According to a report last year from polling firm Harris Interactive, 90 percent of Americans give some consideration to sustainable business practices when purchasing a company’s products and services—with nearly 30 percent saying they consider sustainability “a great deal” or “a lot.”
Harris defined sustainable business practices as “a company’s positive impact on society and the environment through its operations, products or services and through its interaction with key stakeholders such as employees, customers, investors, communities and suppliers.”
The growing pressure on firms to prove they care about people and planet is a crucial topic, I think. So much so that I recently started writing a book tentatively titled The Worthy Organization with co-authors Laurie Bassi, Dan McMurrer and Larry Costello of consulting firm McBassi & Co.
As a result, Global Work Watch is going to close its eyes for several months. While I’m on a part-time schedule at Workforce Management, my work for the publication will focus on HR tech matters.
When Global Work Watch wakes back up, I hope we’ll see the beginnings of a brighter era in people management.
U.S. organizations have some catching up to do when it comes to vetting their suppliers on labor and human rights matters.
And if they don’t get up to snuff soon, American firms could find their bottom lines hit as both outsourcing and corporate reputations become more important.
A study last month funded by watchdog group IRRC Institute found that about 43 percent of companies based in Europe have labor and human rights policies covering their supply chains, while only 23 percent of U.S. companies and 20 percent of Asian firms have such supplier policies.
Overall, the report found that roughly 28 percent of global companies—including nearly half of those with market capitalizations of more than $10 billion—have labor and human rights policies for their global supply chains. The study looked at more than 2,500 companies and was conducted by the Harvard Law School Pensions Project and research firm Asset4.
While policies to ensure decent treatment of workers are becoming the norm for the largest firms, there’s plenty of room for improvement, the report found. Only 15 percent of firms have issued a detailed labor-and-human-rights code of conduct for their suppliers, and less than 6 percent endorse specific labor standards, such as the eight core conventions of the International Labor Organization .
Second, blemishes on a company’s record, such as worker mistreatment by suppliers, increasingly will surface—whether companies like it or not. Watchdog groups, including unions, are shining a light on labor and supplier practices.
Workers themselves have growing numbers of tools for disclosing problems, such as personal blogs and anonymous posts on Glassdoor.com. What’s more, in a global culture of increased self-expression, employees have become more comfortable making their views known.
The public already is clued in to shortcomings of American firms, compared with businesses elsewhere. Harris found that 68 percent of Americans believe U.S. corporations are lagging behind companies in other countries when it comes to sustainable business practices. Public relations firm Edelman’s annual trust survey found that the most trusted global companies are headquartered in Sweden, followed by those in Germany and Canada.
American firms need to see reputation—including the labor component—as a key factor in their business. Becoming a leader on reputation will pay dividends. On the other hand, ignoring supplier labor issues and reputation generally is likely to cost companies dearly.
By and large, HR consulting firms have stepped lightly around the issue of how well their corporate clients have cut costs and employees during the past year. It’s rare to hear outright criticism that businesses botched the job.
But Rusty Rueff doesn’t mince words on the subject. Rueff, the former head of HR at video game giant Electronic Arts and now a board member of workplace feedback site Glassdoor.com, remains appalled that so many firms chopped workers between the Thanksgiving and Christmas holidays last year.
“You just don’t do that,” he says.
What’s more, some companies made “cosmetic cuts” designed to please Wall Street with little sense of whether they were appropriate, Rueff says.
Last year, the initial cuts companies made often were 7 percent or less of the workforce, Rueff says. As a result, firms often required another round or more of layoffs later on, he says. In addition, some leaders have taken advantage of the fact that employees have had few job options during the downturn, Rueff argues.
At some firms, an “abusive” relationship has taken shape, Rueff argues, with employers the guilty party.
“They’ve been callous,” he says. “They’ve been insensitive.”
But I appreciate Rueff’s refreshing candor on the question of job cuts. There’s a fair amount of evidence that employees, including top performers, have felt mistreated or let down by their employers over the past year.
A recent survey of 500 U.S. employees from consulting firms APCO Worldwide and Gagen MacDonald found that more than 80 percent of respondents say they are extremely loyal to their company and personally motivated to do all they can to help their companies succeed. But less than half of employees say they completely agree with the statements “My company is loyal to me” and “My company values its employees.”
Rueff likens the situation to how an abused spouse may stick with a partner as long as there is no financial alternative. The minute they see light at the end of the tunnel, they’re gone, Rueff says.
“We will definitely see people pick up and start to go,” he says.
Layoffs, underemployment and a still-meager safety net aren’t hurting only U.S. workers. The failure to provide much economic security for average Americans is likely to wound companies and the economy overall. It’s probably doing so already.
What I’m getting at is the way shell-shocked, struggling individuals may make less-than-optimal choices because they’ve become so risk averse. When people pick jobs out of fear or an obsession with financial safety, they often end up in positions where they don’t thrive. And by passing on a job that would have been a better fit but may have entailed a bit less money or more risk, they deny that firm an engaged, enthusiastic employee. It’s suboptimal all around.
Even top performers are saying security is a top priority. In fact, they want it more than do employees overall, according to a recent survey by consulting firm Watson Wyatt Worldwide. Job security was cited as a reason for joining an organization by 37 percent of top-performing employees.
That made it the second-ranking reason after “nature of work” for top performers. Thirty-three percent of all employees cited job security, tying for second place. Employers, meanwhile, appear clueless about this stability focus: Security didn’t make the top-five list for employers when asked why employees join an organization.
The recent career deliberations of a friend flesh out the point. He had two job offers in hand: a stable job he didn’t think he’d love and a position at a startup that is riskier but the kind of work he’s been fantasizing about. He eventually went with the startup, but came very close to turning down his dream job.
In particular, at one point he felt he couldn’t take the post without a guarantee of severance pay in case the job fell through. This demand, which the startup would not agree to, is unusual for midcareer business consultants like my friend.
But it is understandable given his recent economic experience. After losing his job nearly a year ago, he has been unemployed or underemployed as an independent consultant despite holding an advanced degree with a focus on China from an elite university. Without work, he has faced the loss of a cherished private school for his kids, home foreclosure and strained relations at times with his spouse.
And yet a dispassionate look at my friend’s work situation showed him getting an increasing number of consulting projects, two recent full-time job offers (the ones he was weighing) and growing economies in both the U.S. and China. His prospects would be good even if the startup flopped in a few months.
In other words, he was approaching his job choice with the scars of economic insecurity distracting him. And they came close to keeping him from a choice likely to benefit both him and the startup.
The severance issue was not my friend’s only concern with the startup job, but it was a major one. Eventually, he dropped that demand and took the leap. But how many of the country’s millions of unemployed and underemployed are going for the safer bet? How many will go for the safer bet in the months and years ahead?
Companies overall were quick to ax employees during the recession. And they are rehiring slowly.
If economic life for Americans is akin to climbing a mountain, we’ve allowed that journey to become very hazardous, very slippery. It’s easy to lose your footing or get knocked off your feet and tumble down far. Firms want people who are eager to take risks and rise to new heights. But don’t be surprised if battered and bruised Americans instead seek refuge in low-lying caves—to the detriment of all.
Looked at one way, a raft of recent data about what employees want suggests they are hopelessly schizophrenic.
But it’s also possible to read the research as showing workers to be entirely sane—and asking for things employers either can’t fathom or don’t want to know about.
Let’s look at job security first. According to a recent Watson Wyatt Worldwide survey, job security was cited as a reason for joining an organization by 37 percent of top-performing employees, making it the second-highest-ranking reason. But research from the Corporate Executive Board indicates that once workers take a spot in a firm, organizational stability is not one of the most important drivers of employee engagement.
Indeed, employees say they want excitement. In a Salary.com study published this year, 35 percent of employees named “boredom” as a significant factor in an employee’s decision to look for a new job, enough to make it the fourth-highest factor. But Corporate Executive Board data show that employee engagement is deflated by disruptive change such as massive restructuring, and even more so by the anticipation of such change.
Employees also say they want a caring, encouraging employer. In a recent Randstad study, 80 percent of American employees said their ideal employer “cares about their employees as much as their customers,” putting that response in a tie for first place. And 75 percent of employees said that “recognizing and rewarding employee successes” was an important leadership practice.
That ranked as employees’ top answer for leadership practices. But right behind it was a nod to standards: 74 percent of employees said that “holding people accountable for their behavior” was an important leadership practice.
Given these responses, do employees collectively suffer from multiple personality disorder? I think not. Taken as a whole, what workers are getting at is a common-sense desire for a baseline of economic stability as well as a supportive yet challenging work environment.
These goals can be better understood in the context of economic and cultural trends going back 30 years. Economic risk has shifted to workers and families from business and government since the 1980s. Layoffs, pay cuts and roller coaster retirement accounts during the past year have added to the financial anxiety.
Employers don’t seem to get this picture of what workers want. In the Salary.com study, only 20 percent of employers thought boredom was a significant factor in an employee’s decision to look elsewhere—a difference of 15 percentage points from employees. And in the Watson Wyatt report, job security didn’t turn up among the top five reasons employers gave for why employees join a firm.
I’d bet the disconnect is partly ideological. Many company execs adhere to a pull-yourself-up-by-your-bootstraps mentality, downplaying the role of the group or the need for stability. It also may be that companies consciously want to avoid opening the door to an earlier era where their flexibility to hire and fire was limited.
In any event, some companies seem to be sticking their heads in the sand about security. Adam Zuckerman, a consultant with advisory firm Towers Perrin, says a lot of companies don’t ask directly about security when surveying employees. Another business consultant involved with engagement issues, Laurie Bassi, says she has talked with company leaders who didn’t want to ask their employees about job security.
“This is kind of like going to the doctor and saying, ‘I don’t want you to do that cancer test, because I just don’t want to know,’ ” Bassi says.
The attitude of denial suggests to me that business leaders, more so than workers, may need a head examination. In a world where engaged employees are increasingly critical to business success, a wise company will want to think clearly about how to win over its workforce.
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