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Leadership Thought #208 – The Employer-Employee Model is Broken


I feel there has been a major shift in the employer-employee relationship in my lifetime.  These days talented employees see themselves as free agents and will move at the drop of the hat for more money or responsibility.  Careers have simply become resume building exercises with the expectation or hope that you will fall forward or simply move on to the next job if things don’t work out.  The interest of the company is secondary to what is in your own self-interest and will provide the greatest short term gain.  The millennial generation takes this to an even higher level and has no tolerance for paying their dues or working their way up the corporate ladder.  There is a laser like focus on the present with very little consideration of the future implications of their actions on themselves and/or their co-workers.  There is definitely a “get what I can get and live for today” mentality.

Employers now more than ever tend to see their employees solely as assets to be managed and reallocated as needed.  To the greatest degree possible they want to turn labor into a variable expense and minimize employee related overhead.  With unemployment so high, the mindset is fast becoming that if you don’t perform in ways I want, then there are many other people lining up to take your place.  There is minimal appetite for investing in people development because it’s expensive, takes time and employees ultimately leave and take those skills to your competition.  Moreover, if we can close down operations here and move it somewhere else that it is cheaper than the decision is a “no brainer” and should be implemented ASAP regardless of the consequences.  Finally, the gap between executive and average employee pay has become extraordinary with the creation of a very small and extremely wealthy aristocratic leadership class and everyone else struggling to make ends meet and save for their retirement.  At times it feels like we are reverting to a “Banana Republic.”  Does anyone else see that we are on inevitable a collision course? 

What made American industry great was that we had a solid albeit often informal contract between employer and employee.  If you show up, put in your dues and do a good job, we will take care of you economically and provide a sense of security around your professional and personal well being.  Hang in there and stay the course and there will be opportunities for advancement.  We will also create a safety net to catch you when you fall and/or have to deal with challenging life issues.  The overarching theme being that we are all in this together and should make the best of it.  It is also why we created the largest middle class ever known to mankind and put great distance between ourselves and other economies in the world.

There are still some companies that get this like Google, Apple and Disney but they are getting harder and harder to find.  The good news is that the results speak for themselves.  There is no magic formula when it comes to business success. It has always been the same thing:  Create quality products/services that customer’s value, deliver them in and efficient and effective manner, and take care of your people and they will take care of you.  The evidence is in plain sight for all to view and always has been.  Business should be a Win-Win- Win proposition for the company, its customers and the employees.  I wish more company leaders were paying attention.

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