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.
Under the contract, thousands of recruiters in cities and districts across China will use London-based MrTed’s software to better connect employers with workers in the private sector.
“For the employer, it’s a recruiting service,” says Jerome Ternynck, CEO and co-founder of MrTed. “For the employee, it’s a placement service.”
Recruiting software products such as MrTed’s TalentLink do such things as manage job requisitions, track résumés and rank applicants against job openings.
Ternynck says the project in China is focused on “talent,” which refers to a class of workers distinct from farmers and civil servants. The goal behind the software effort is to speed up the time it takes to return “talents” to employment from an average of four months to three months, Ternynck says.
Although exact terms of the contract weren’t disclosed, Ternynck says it will bring MrTed annual revenue in the seven figures in U.S. dollars. The deal amounts to a feather in the cap for MrTed. Ternynck’s firm prides itself on its global capabilities, and calls the Chinese effort the largest-ever implementation of talent acquisition software provided over the Internet.
According to U.S. government estimates, China’s urban unemployment rate was 4 percent in 2008. But if the country’s large population of migrant workers is included, the total unemployment rate may have been as high as 9 percent.
Labor unrest in China can get ugly, and potentially represents a threat to the authoritarian government. In this light, the deal with MrTed is a forward-thinking move. I’m also not aware of many other deals by government agencies along these lines. Ternynck says MrTed was tapped for a similar pilot project in France not long ago, and showed decent results. But the effort died partly because of bureaucratic infighting, he says.
If so, it wouldn’t be the first time promising technology for boosting employment was unplugged for suspect reasons. In 2007, the Bush administration killed public job board America’s Job Bank without a thorough explanation. The absence of the site hamstrung an effort at the beginning of the recession to help Americans get back to work.
Not only will more jobs restore a sense of economic stability and peace of mind to millions of out-of-work Americans, but it will also help make the nascent recovery more sustainable.
China is taking action to combat unemployment. America can too.
Recent reports about workplace morale make it clearer still that the pendulum has swung too far in the direction of the disposable employee.
Employees feeling more secure on the job are much more satisfied with their work, according to a study published last month by job board SnagAJob.com. The survey of about 1,000 U.S. workers found that 52 percent reported a decline in job security compared with a year ago—and of those, just 49 percent expressed happiness with their jobs. Of those who think their jobs are more secure, 70 percent say they are happy at work.
Job happiness is a close cousin to employee engagement—the commitment employees feel to their employers and how much extra effort they give. Employee engagement data in recent months has been mixed but on the whole indicates a decline. And drooping engagement weighs on the bottom line.
Earlier this year, the Corporate Executive Board said the percentage of employees showing high levels of discretionary effort had dropped from 17.2 percent in 2005 to 6.5 percent, and that the decline in engagement is decreasing overall productivity by 3 to 5 percent.
A new report from staffing firm Randstad, on its surface, finds a countervailing trend. Employee morale in the U.S. is at its highest since 2004, says the survey of about 2,200 employees and some 830 employers. What’s more, 57 percent of employees say they are loyal to their firms, up 8 percentage points from last year.
But Randstad finds rockiness amid the rah-rah. Just a quarter of employees say their companies are loyal to them. And, the report notes, a morale boost is typical in a recession.
“This isn’t really a picture of satisfaction,” the study says. In the wake of widespread layoffs, “remaining workers are happy to have their jobs, but they feel the loss of their workplace families,” the report says. “They are optimistic about their futures, but the feeling is slipping every year.”
Americans’ resiliency has been battered by three decades of firms treating employees as disposable, as author Louis Uchitelle puts it.
It’s as if workers want to love their employers, but keep getting spurned by firms fundamentally focused on short-term results in a cutthroat global economy.
It’s a testament to Americans’ hopefulness and sense of dignity that, if anything, workers want more from workplaces these days. The Randstad survey found that 80 percent of employees say their ideal employer “cares about their employees as much as their customers,” up from 66 percent last year. That was the top response, tied with “delivers on its promise to customers,” which was up 15 percentage points from last year. It seems that in the wake of fraud in the housing and financial fields, workers are putting a higher value on a firm’s integrity.
Even if we’re headed toward organizations with a smaller “core” of employees, those workers likely will perform best with a degree of job security and a culture of true respect for customers and workers.
Another way to frame the issue is to move to seeing employees as “recyclable.” That is, don’t trash them to make the quarterly numbers. Do your best to keep them, and keep helping them upgrade their skills to fit your changing business needs.
Companies hoping to thrive in the recovery ahead would do well to get out in front of the pendulum’s return. Ever more data indicates the era of the disposable employee is coming to an end.
One of the recession’s casualties could be the further erosion of employee trust in employers, with a corresponding hit to business bottom lines.
Trust can seem esoteric, a nice-to-have. But it actually plays a major role in the economy and within a company. Just as consumer trust in a brand can make or break a retailer, employee trust can make or break a firm’s productivity and innovation. As consultant Stephen M.R. Covey has pointed out, lower trust taxes a firm through lower speed and higher cost.
But other signs point to growing cynicism toward businesses and business leaders. In January, public relations firm Edelman said that only 38 percent of U.S. respondents to its annual trust survey said they trust business to do what is right—a 20 percent drop since last year. Just 17 percent said they trust information from a company’s CEO. Both are lower levels of trust than those Edelman measured in the wakes of the Enron scandal, the dot-com bust and the September 11 terrorist attacks.
In recent months, companies have shown greater interest in furloughs, which keep employees connected to employers and can preserve morale. But the initial response to the downturn at many firms appears to have been panicked job cutting. Seventy-two percent of organizations surveyed by consulting firm Watson Wyatt Worldwide in April laid off employees or otherwise reduced their workforce.
For companies and the country to enjoy sustainable success, it seems a new compact around work will be needed. It may not mean a return to guaranteed jobs for life, but it will probably involve a still-stronger government safety net and new efforts to rebuild trust between companies and employees.
A new report from The Conference Board research group underscores this point. The report found that trust, transparency and clear communication are vital to preserving engagement and productivity in the wake of layoffs.
“The downsizing action itself pits a management team’s interests against employees’ interests—essentially promoting an ‘us against them’ atmosphere,” report author Stephanie Creary says in a statement. “Survivors will perceive the layoffs as either fair or unfair based on the extent to which they believe the decision to layoff employees was either strategic or impulsive.”
Communications consultant Alison Davis adds that flooding employee e-mail in-boxes with sophisticated memos isn’t the answer. It’s an era of interactive media, and workers want authenticity from leaders, she said in an essay earlier this year for The Conference Board Review publication: “Employees want to hear what leaders really think and feel, not listen to carefully scripted talking points.”
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