Wednesday, June 2, 2010

Well, Mr. CEO, Was It Worth It?

An interesting story appeared last week in the Wall Street Journal. The basic gist of the story was that as the economy recovers, more and more people are telling their bosses to take their job and shove it as they move on to greener pastures.

One of the reasons they give is that people are looking for that step up on their climb to success. Another reason is that people were getting tired of being treated like garbage:

Another factor making it harder for companies to retain employees is the effect of the heavy cost-cutting and downsizing during the downturn on workers' morale. A survey conducted last summer for the Conference Board, a management research organization, found that the drivers of the drop in job fulfillment included less satisfaction with wages and less interest in work. In 2009, 34.6% of workers were satisfied with their wages, down more than seven percentage points from 1987. About 51% in 2009 said they were interested in work, down 19 percentage points from 1987.

"Employees feel disengaged with their jobs, which is going to lead to a lot of churn as we come out of the recession," says Brett Good, a district president of Southern California for Robert Half International, an executive recruiting firm.

There's an old saying that you can kick a dog only so many times before it turns on you. People are having to go through furloughs, pay cuts and lay offs, all the while the CEOs and members of the Board of Directors are still taking home their millions of dollars. Understandably, people get tired of being treated like a dirty shirt, and will go where they feel they are wanted and not just used.

The companies are going to have to pay heavily for the short-term gain that their CEOs pursued:
An increase in turnover can be costly for companies. It typically costs a company about half of the position's annual salary to recruit a person for that job, but the cost can run up to several times that if the position requires rare skills, says Right Management's Mr. Haid. Convincing employees to stay might not be cheap either. Nearly 5,400 members of, a job board for positions that pay $100,000 or more, responded to an April survey that asked how much more money it would take to convince them to stay if they wanted to leave. More than 20% said it would take a raise of more than $25,000. In all, about 50% of respondents said it would take more than $15,000.
This refusal of delayed gratification can also be used to explain why their is a lot of animosity towards union workers, especially public sector workers. Most people only look at the immediate pay and whether they get certain health benefits. Union workers, especially in the public sector, tend to take a longer look down the road, and try to get the best deal they can, balancing the immediate needs of their workers with their long term needs.

When the country faces economic hardships, like the one we are trying to climb out of, the short-term benefits evaporate into the air. Then those that sought out the quick fix become jealous and angry with those that looked further ahead. And even though this has happened many times before, people seem to have such short memories that the pattern keeps being repeated.

1 comment:

  1. super-interesting, but i wonder how this phenomenon might affect people with more, well, normal jobs, like service workers, office clerks, etc