A couple of years ago, I had a local employer call me and ask for advice about how to hire good people. We were still in the aftermath of the Pandemic and he couldn’t find good employees that would stick around longer than a couple of months. He owned a small trucking firm and spent most of our conversation complaining about the work ethic of the upcoming generation, their salary demands, and how hard it was to keep them once he’d invested a lot of money in them. “Nobody’s loyal, nobody has integrity anymore,” he said to me. “They all want to make a million dollars and don’t want to work for it.”
I’m sure to some of you reading this, he sounds like an old man shaking his fist at the clouds and yelling “get off my lawn.” But think about it from his perspective: To hire a driver means a lot more than the hiring process for him. He has to conduct a background check with past employers, get the new hire to take a DOT compliant drug test, do basic driving training required by the DOT, and that’s all outside of any onboarding process an HR person might like to put them through.
For a small business that’s a large investment. Of course, he’s upset when people leave. Some of it might be his fault, for all we know, but…
Maybe, it’s “our” fault.
American businesses, across all industries, have grown more and more conscious of the efficiency of their employees over the last 20 years. In my experience, CFO’s are more focused on their efficiency analytics, MBA equipped business managers understand analytic metrics better, and investment groups are more and more eager to use analytics to monitor their investments. This is in addition to the popularity amongst business leaders of Jack Welch’s method of firing the bottom 10% of employees annually.
In short, more and more businesses are quick to hire (grow) and quick to fire (trim the fat). They want to show that they are both growing rapidly and “lean”. HR plays a role in this as well. HR has caused a backlash by being synonymous with technical/legal roadblocks and bureaucratic delay. Companies like Netflix have, therefore, reacted by coming up with ways to move on from underperforming employees even sooner.
“Maybe, it’s “our” fault.”
Most white-collar workers in America, above the admin level, are hired, given a job description, perhaps a fancy onboarding, and told to produce. Despite complicated metrics for giving performance evaluations, employees largely go uncoached and the blood letting happens fast. Managers tell employees, “you’ll know if I am not happy because I’ll tell you.” They do, but by the time something is said, opinions are often formed and the disciplinary process is a formality.
Raises are evaluated annually, sometimes employees receive them and sometimes they don’t. When they do, the raise is measured, often, in single-digit percentages with large earners having worked for the company eight to ten years or more. Thus, to significantly earn more money, an employee must invest a lot of time in a company.
Companies utilizing such tactics see incredible, fast results. Efficiencies go up, productivity rises and profit margins grow. But that doesn’t mean there isn’t a price to be paid.
Take some time and look at the LinkedIn profiles of workers under the age of 30. You’ll see a string of companies listed with the end coming in under 18 months. Then suddenly you’ll see one job last for three years before returning to the norm.
Maybe, I hear you say, younger employees are more mobile and willing to jump ship quicker. They want big money and don’t stay anyplace that doesn’t give it to them. Yes, I’m sure there’s a lot of that. But it might go deeper than “they’re just a bunch of lazy, entitled kids.”
What if the rapid movement is a response to employers moving on quicker?
From the employee’s perspective, why would he or she be loyal to a company that openly states they can (and will) terminate them at any time without warning? If everyone in the company is expendable, then logically, it doesn’t hurt the company if an employee resigns; it’s pain free for both parties.
The quick to hire, quick to fire routine destroys not only loyalty but also any incentive to stay the course because the likelihood of long-term growth within the company is probably very small. There are too many ways to get fired to not be looking for a profitable exit.
In most positions, blue and white collar, it takes longer than six months for employees to become efficient in their jobs, but most managers tell you they can tell who is going to be a good employee within the first week.
“I can tell you this for sure, companies who create a good culture, develop their employees, allow people to grow and make mistakes, and reward those who show growth, are beginning to outpace those who don’t.”
Market forces now give younger employees, who by definition aren’t efficient because of their relative inexperience, incentive to keep their eyes out for a better, higher paying job all the time. Every MBA taught about the present value of money can tell you that 10 dollars in the hand today is better than 20 dollars in five years. You don’t think younger employees know that intuitively? That is especially true if today’s money isn’t guaranteed.
Employees are not as loyal today as they used to be, that is demonstrably a fact. But a lot of our larger employers started the downhill slide. In short, they demanded loyalty and showed none themselves.
This is just a theory. I think it’s a good one, but it’s just a theory until somebody picks it up and does the research. But I can tell you this for sure, companies who create a good culture, develop their employees, allow people to grow and make mistakes, and reward those who show growth, are beginning to outpace those who don’t. Over time that incremental momentum will carry them far past their competitors.
Loyalty is a two-way proposition. Companies need to begin to consider the long-term effects of their employment practices. Ironically, it’s the small trucking firm currently carrying the load for us all.