Friday, January 28, 2022

Jobs, benefits and mobility

The job environment I came of age in is vastly different than today's environment.

In the 1980s "benefits" were still a legacy from WWII where wages were frozen and firms sweetened the pot to retain workers.

Employee retention was a given and firms were generally OK with financing skill up-grades.

Things changed through the '80s and '90s.  Benefits were seen as non-value added, fixed costs by firms and they were cut. Variable pay was used to retain key employees and to encourage less-valued ones to leave.

The worm turned

Even as the firms started to view employees as fungible, that is, fully interchangeable cogs, employees started returning the favor.

Listening to various young people, nobody recruits internally. Employees are chained-to-the-oar in whatever position they hired in as. Employers are loath to create an opening by promoting.

Furthermore, there is very little differentiation between companies with regard to benefits. The ACA mandates what is in healthcare packages so there is little differentiation there. Nearly all firms abandoned fixed-benefit retirement plans so the only difference is the percentage matching.

It seemed weird to me when one young, recently pregnant woman informed me that she was thinking about changing jobs because her current place-of-employment hosted healthcare plan-enrollment only once a year and she had not been pregnant then. They will not allow her to switch plans mid-year to a higher premium plan with more maternity coverage. HOWEVER, she can change jobs and enroll into the level of plan with that coverage.

Ferdinand Fourier once estimated that the cost of replacing an employee was approximately one year's wages. That includes both the obvious and the hidden costs. It makes me speculate that the fad of "employees as fungible units of production" might have overshot the mark.

Enough humans are rational beings to seek positions where their needs are met that firms that are wedded to "no benefits, no training, no promotions" will become Human Resources firms that manufactures widgets as an unprofitable, sideline hobby.

We live in interesting times.

14 comments:

  1. ERJ, I would argue that it costs more than a single year - to be fair a year in productivity and "coming up to speed", but in some cases years as the accrued knowledge - I call it "institutional knowledge" walks out the door. Sometimes, that is irreplaceable.

    Even twenty years ago in my industry, the standing joke was if you wanted a promotion, get another job. Companies were - and are - pretty bad at promoting internally, let alone changing job fields for those that are willing to start back at a lower position to learn (the fact that they are reliable employees having been established already). They would rather let them leave (and thus have two open positions) rather than retain one.

    There will always be companies - smaller ones I assume - which will never quite "meet" the expectations of large corporate benefits but will have other things that retain employees - flexible schedules, love of work, even the indefinable quality that makes people want to stay (I have stayed in positions perhaps longer than I should have because my boss was amazing and I wanted to work for them). But to your assessment, companies that cannot offer any of that nor the benefits that are (now) fairly readily available will simple fade away.

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    1. My youngest sister will be retiring in three days. Her firm merged (was taken over by) another firm. Her job and associated benefits will be "converted" to the new firm's standards. She will lose hundreds of dollars a month if she doesn't hop off that horse.

      After hearing "I can hire three newbies for what I pay you" my sister had the opportunity to say "Now you get your chance."

      Her function had three people in it. One is out on stress-related leave. Sis retires Jan 31. The remaining person is melting down.

      The boss had been trying to game-the-system to promote one of her pets into the open positions but complaints were filed and the process is frozen during the transition.

      It is an UGLY time to be working in some places.

      I have rarely seen my sister so happy and stress-free.

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    2. When I retired last june Joe, it felt like the weight of the world had been lifted from my shoulders. I know how your sister feels.

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    3. When I was forced into retirement, at first I was angry. I loved my work and where I did it. But it only took a very few days before I realized that I had been slowly killing myself in that job. I wouldn't go back to work now if someone begged me.

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  2. I worked for a big consulting firm at one time. During orientation they told us they weren't like the others. They calculated hiring a new employee cost them like $60K. (This was in 1997), so they repurposed people. People were, they said, their biggest asset.

    When the project hit steady state, They spilled blood. Did it again as they migrated to their service center.

    It was all bullshit, and most of us knew it. I left long before that particular titanic hit it's iceberg.

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  3. Tis true... Been tacitly looking for several years now (gainfully employed, just looking for the right kind of better).
    Several otherwise likeable positions at the same company seem to keep showing up in the job search. Will get filled for 3 months, then show up again. Constantly.
    Can you say 10 foot pole?

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  4. I left my decade plus job last spring. They had been going downhill for years but it took me a while to find something better.
    They kept promising a promotion but never delivered and kept making the job harder while claiming it was the same or they were making it better.
    I ended up taking a one year pay cut to move into a field I wanted to learn, with much better management and a better working environment.

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  5. As an employer I tried to promote the good employees whenever possible and hire new ones into the bottom. That worked great until about the end of the '90s, early 2000s. Then my top level employees were getting hired by big companies in the same field from other parts of the state and out of state, and by my banking customers to work in their mortgage departments, and by local governments that had benefit packages unavailable to private businesses. I was talking to a guy that I know in the same business out of state and he told me he had a 110% turn over the previous year and it was busting him. This is not all the fault of the employer. It is caused by other businesses, usually large ones, looting the small ones but mostly by employees with no sense of loyalty that appreciated the time and money I put into training them. I'm glad I sold out and retired. ---ken

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    1. Tough to compete with dot-go on benefits. Basically you are competing against money the government took from you.

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  6. I seem to remember a study that said us old farts had maybe 5 jobs over our lifetimes, where the 'kids' under 40 had already had 9 different jobs before age 40. I think much of that was due to what you've outline above.

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  7. I wonder how much of an impact different industries or types of jobs impacts employment mobility - do careers in, say Information Technology, tend to be more "active" in terms of job moves? For myself (40 yrs of working) - 4 construction jobs, 8 IT employers, and two fire departments.
    Completely agree on the high cost of replacing employees! Something that .gov employers seem to completely ignore...

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  8. Longevity with one employer is largely a thing of the past. My wife has been with the same large corporation for over 26 years, now, after bouncing around a bit in similar, but smaller, organizations now mostly defunct. Started in a rather lowly position, overall, and has steadily risen in the ranks, and been rewarded handsomely for her efforts. I cannot wait until she retires in March 2023.

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  9. This is a UK experience.
    I worked for 20 plus years in same relatively small UK company which was taken over by a huge, non USA, company. Mainly because they wanted the juicier big projects which other parts of the UK company had. The small but very profitable stuff that I worked on was considered too trivial and was ditched. Out of spite they would not even sell the intellectual property to former customers of ours, after the Big Company raised the unit price of our kit by a factor of 4 in the hope of putting buyers off and then no doubt justifying the shut down. But customer accepted the far higher price.
    After being made redundant and accepting early pension and getting house and other things in order I thought I would try contracting.
    I was surprised at how well it went. Contracts were 3 months long, but continually extended. Sometimes with my former company, sometimes with former customers. I was making multiple times what I was earning as a permanent employee. Most importantly I was given interesting work with all the mundane work reserved for the cheaper permanents.
    I think I became known for being reliable, knowledgable, experienced. Because I was not looking for a career, the folk I worked with did not see me as a rival and we got on better and achieved more, my bosses did not have to worry about my loyalty and did not have to worry about me dropping them in the shit. I did not even mind my ideas being adopted as their own.
    What I did learn is that there is a shortage of people with experience, common sense, reliability and tact, and who can do the job. Without bullshitting. And who are willing to relocate.
    So, all you people out there do not be afraid of making the leap. Keep learning, gaining experience and always make friends. Good luck.
    Oh, and never bullshit in an attempt to get a job.

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  10. Reading this after dinner, SWMBO reaches over and taps me on the nose. "You know what that is, right?" Me: "It's the pause button." "Yep." We had been sold to a venture capital group by a former employer. I had been in the department for twenty-seven years - we worked together like a small family owned business. I was ready to retire, but didn't want to leave our group in the lurch. A coworker, knowing I'd be there until the end, gave me everything I needed to pick up where he left off if he got caught in one of the periodic "force adjustments". They came for me right after they finished with him. When they got done with me, I checked everything I had outstanding into the version control system and called it a day. I was smiling, the rest of the group was not. Company eventually exited the business, and I now do contact work for the firm that took over the customers, still working with the same people. It's better this way.

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