You Better Start Treating Your People Right, Or The Best Will Be Leaving Soon

This week's Economist has a story called Hating What You Do, which presents a rather discouraging but well-documented argument that, since the downturn began, a lot more people are a lot more unhappy with their jobs.  For example, to quote the story, "A survey by the Centre for Work-Life Policy, an American consultancy, found that between June 2007 and December 2008 the proportion of employees who professed loyalty to their employers slumped from 95% to 39%; the number voicing trust in them fell from 79% to 22%." Ouch.

Certainly, some of this unhappiness is due to the fear, bad news, pay cuts, loss of benefits, objective loss of job security, job overload (an effect of layoffs on survivors), and other bad experiences provoked by these hard times.  But there is huge variation in how well or badly different organizations have treated their people during the past couple years.  The Economist article refers indirectly to my HBR article on being a Good Boss in a Bad Economy (see the McKinsey interview for free). If you recall from my prior posts, my basic argument was that there is a big difference between what organizations and bosses must do to survive during tough times and how they do it -- and the keys to doing dirty work (like pay cuts and layoffs) well include providing people as much prediction, understanding, control, and compassion as possible in the process.

Well, now that we seem to be seeing early signs that, within a year or perhaps less, many companies will be hiring again (in fact, I notice that Google is back to hiring already, and they did some layoffs earlier in the year), your chickens will be coming home to roost soon. If you are a boss or organization that has treated your people well despite the challenges, the return of the so-called "war for talent" will be great for you because your best people won't run for the door when the job market starts heating-up again and you will have an easy time recruiting great people because, after all, the good word spreads. 

But if you have treated people like dirt during the tough times (for a horror story, see here), have been inept about how you have implemented tough decisions (see here) or have simply been clueless about your people's perspective during these tough times (see here), you may have been able to keep great people working for you during these tough times and to hire some of the best. You can be sure, however, that they have told their friends about how much your company or you suck.  They are waiting for things to get better, and perhaps encouraged by the signs the labor market is coming back, are probably doing their jobs extra well these days to enhance their reputation for that coming job search.  So you may be fooling yourself into believing all is well when it is not.

In my view, if you have been nasty, inept, or greedy about how you've treated people during the downturn, you will deserve everything you get when, as things start getting better, your best people start leaving in droves and the best candidates not only turn down your job offers, they don't even bother to apply because your reputation stinks.  Looking at it from your perspective, however, you've might have just enough time to salvage your reputation if you begin reversing your vile ways right now.  And, if you've treated your people well during these tough times, cranking up the respect, attention, and -- if you can afford it (I know it is tough) -- your pay and benefits right now just a bit could pay huge dividends down the road.

Comments

[rich solomon]

Reading the "dumbest management practices" comments following the recent BNET piece I was struck by how many people cited annual performance reviews as useless, contrived, empty, fake, and so forth. Wonder if some of this comes from the tight economic times and the tendency of companies to consider their workforce a "cost" to be cut when the upward flow of capital seems at risk. I suspect things would be different if the annual review was accompanied by a profit-sharing check.
I agree with many of the comments here that fundamentally the undervaluing of employees by companies and the tendency of the same employees to put up with at least mild mistreatment will take a lot more than an upturn in economic activity to improve, should that actually happen. I think we're well past the point where those "101 ways to reward employees without paying them" tricks will work. Genuine consideration, kindness and respect, honesty and openness all make for positive reciprocity in human relationships, often in ways more subtle than if someone stays in or bails out. In fact, the "stupid management practices" often have roots in the mistrust that arises when these attributes are absent.

[Wally Bock]

I join in lauding you for the post, Bob. But I also concur with several of the comments that even with the jobs god comes back from the ground it still won't be easy to change jobs. I think there will be an upsurge in leaving, but I think the big benefit will be to companies who have treated people right and will gain resources to try new things.

[Kim L.]

This was a great post. I think it takes someone who is not directly involved in a situation, whether it be a good or bad situation, to be able to fully see and understand the possible future consequences to the current actions. For the distant future, the economy is going to be rebuilding itself and employees are going to want the support from their employer that their work is valued, that they are valued as an employee, and that they have both their customers' and employees' interest at heart. If a company shows its employees that they care about their well-being, even through tough times, and that the company is doing the best they can in doing so, then that's all the employees can expect during these times. If the employees see that, I believe there would be no problem in keeping a good company reputation and valuable employees.

I work for a company who, in my opinion, has not handled the economic downturn very well in the eyes of the employees. I strongly believe in this article, and I am interested to see what happens when the coin flips and the company is back on the up-and-up.

Thanks for linking this article, as well as describing the real possibilities from the company action.

[Ajo Cherian]

I'm not for a slow economy but one benefit of it is that it will force companies and employees to be tested leading to some shakeups that may be for the better. As with people, a company's true character will show in the trials rather than the good times.

[Ruth Sanderson]

Steven M R Covey in his book The Spped of Trust, talks about how
"trust" in companies was eroding
even before the down turn so I am not suprised to read some of your data Bob.

Some people believe that once trust is lost (and lets face it the public have lost a lot of trust in banks and finacial institutions) you can't get it back.

Covey puts forward the idea that trust can be rebuilt and I agree.
It comes down to the character and competence of leaders.

You are right Bob talent walks and young talent even quicker than before.

Encouraging conversations around trust and building or rebuilding
would be a place to start.
Regards
Ruth

[George Smith]

This was a great post. But I think that, even with the job market recovering, people will still be content working in jobs with low approval ratings. Even as the job market turns around, it doesn't seem that it will be so easy to jump ship and find the perfect job.

[RG]

I'm not sure where to post this, but I just read your book and it seems... profound. So profound that it's obvious, which is a deep compliment I hope.

One of the many thought rattling around in my brain is the idea of recognizing when you're being a jerk. When you're in a conflict with someone and they call you that, are they automatically right? And, more to the point, is it helpful to label people (even as temporary a-hats)? Or is this one of those "no one can demean you without your permission" ideas?

An unrelated thought rattling around in my brain is that I fit the accusation of being attracted to a-hats. Meaning passionate, forthright people who like to think in unique and unusual ways, and who then rub up against status quo defenders. More to the point, I divide the world into these guys and the doormats. So I'm trying to understand why I fail to notice the balanced guys (who are they?), there's obviously some false-negatives or false-positives going on.

A third idea rattling around is: am I jerk when I snap at someone above me? It was funny to realize that I try much harder to "kiss-down" than I do "kiss-up". It's the idea that I've been trained to be nice to people below me, but to hash out ideas as equals. Superiors aren't always on the same boat about equals.

A fourth idea is collateral damage: a lot of the damage comes before I label someone, the frustrated, wondering if I'm overreacting, trying to decide how to deal with it, "what am I doing wrong?" place. Once you know that someone is basically unreasonable, then detachment is possible. But since most people aren't reasonable or un-, there's a constant "reality check" going on.

[Brittany]

I agree 100%; great post, and such perfect timing for it. Once more jobs start to open back up and companies are hiring again the people have been treated poorly are sure to leave and take their talent elsewhere. Many bosses don't realize this, and are in for a big surprise when they start to lose workers due to their bad reputation. I'm thankful my boss isn't this way. We actually had a reduction of workforce last week and the President of the company scheduled three different meeting times so all 1500 employees could hear from his mouth his intentions and where he was hoping to go next. I feel like it helped calm everyone's nerves and misconceptions.

[Sharon Markovsky]

Jerks, jerks everywhere and not a job to have...

Bob, I think you are right on with this blog. I am constantly bombarded with horror stories about bosses/companies that are just hammering their people to do more with less. As it is I am doing the job of 2 1/2 people because of a layoff in the beginning of this year.

My favorite "boss" line is: "you are just likely to have a job in this economy." I feel so motivated! Because we always think of a great comeback about two seconds after the jerk leaves you to lick your wounds…how great would it be to be able to say: "You know what buddy, you should feel the same way, cause it is unlikely that you will keep your job when you loose more than half your staff when this economy improves.”

Bob, again this was a great blog. I hope the senior and mid-level executives in companies throughout this great land of ours read your words of wisdom!

[Jake]

I think a number of experienced people at my employer will jump ship when the job market turns. We are experiencing massive wage compression issues.

About a year ago, my employer started implementing tighter cost controls. To avoid losing job postings or contractors; many people were quickly hired at higher (often much higher)than company average wages for a job. Sometimes they were earning just much as the positions above them.

To add more tinder; annual merit increases were canceled in 2009. Now the spark: We have been extensively reorganizing throughout the year so this situation is becoming more apparent.

I do not see the company budgeting large amounts of money to correct the internal equity issues. Rather people will leave and they will fill the position at a higher wage level.

[Dwayne Phillips]

Studies and data document once again what most people know - People don't like working for jerks (or whatever synonym you prefer).

What I see happening is that the younger people (below 30) are far less tolerant of this than I was 25 years ago. I have seen college grads quite their white collar jobs and work as a waiter instead of working for a jerk.