Company loyalty to their employees: Dead as a doornail, friends

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Written before about employee loyalty, and now let’s tackle the other side of that same coin: company loyalty.

You can define this term in two ways: it’s either the loyalty of the company to the employee, or the loyalty of employees to the company. I’m going to define it in the first way here, since I think the term “employee loyalty” I linked above is the second definition.

So, are companies loyal to employees these days?

Good Lord no.

But we tend to over-generalize this whole narrative, so let’s walk through it quickly — and try not to over-generalize — and see where we land.

How did company loyalty die?

If you’re writing a shitty college term paper, the two easiest pieces of fruit to grasp at are:

  • Decline of unions
  • Generational shifts

There is truth to both of those, although you could choke every horse in South America with the amount of posts recently on generational differences. Hint: millennials right now are just like Boomers in 1968. The biggest difference there is technology. The second biggest difference is how we relate to work.

Here are some other things that happened that we don’t discuss as much:

The rise of stakeholders: Growth-focused cultures create a lot of pressure to please “stakeholders,” but in the 1960s “stakeholders” also included “employees.” That isn’t true anymore at most places.

2008 recession: This hit a lot of Boomers in the wallet, and probably kept them working longer than they wanted to. (As in, they’re still working.) The ones running companies thus became even more cost-averse. Your biggest cost is people. Time to cut them (look into automation) or stiff them (economic stagnation).

There’s no logical reason for companies to be loyal to people: Even though the U.S. legally has companies as people, companies don’t operate according to moral norms like reciprocity.

And now about that generational differences thing…

Rick Wartzman (historian, not business/econ guy) wrote this book The End of Loyalty, then went on Wharton’s XM Radio show to do an interview. This part pops:

Corporate culture is a kind of reflection of our national culture and societal norms. You had a generation that came through the Great Depression and World War II and there was definitely much more of a “we” mindset, we’re all in this together. I think there’s much more of an individualistic, “I” mindset that began to set in by the 1970s, 1980s and prevails today. That’s certainly part of what’s going on here.

Heard this framed up two ways myself:

  • Millennials never seen a World War. (Shit, that might change!)
  • The U.S. transition from Eisenhower (corn-fed, middle America, general) to Kennedy (slick, tied to mob, handsome, Cape Cod) was when we traded “we” for “I.”

Not sure either is true or massively important, but definitely with high-powered mobile, social media, etc … we’re very much focused now on putting our shit out into the universe, not necessarily chasing empathy.

What are the repercussions here?

Massive, and you could write a series of books about them. Let me hit a few quick ones:

There are more, but that’s a pretty heady start.

Here’s the bottom line: in a capitalism, you typically need a job (or jobs) to get by. More and more people are doing their own thing, which has some value. (Peer to peer economy!) But despite that narrative, increasingly many North American companies are actually becoming more bureaucratic and hiring more people in the middle. That’s good — people have jobs — but ultimately will not end well, because most middle managers have no ROI and, with company loyalty declining, they’ll eventually get sacked.

Hard to ignore the fact that we live in a world where five guys (Gates, Bloomberg, Buffett, etc.) own about as much as 4 billion other people. The game has always been about money and accruing it. It’s never really been about the people who help that process. And therein lies the death of company loyalty.

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Blogging, largely about work and how to improve it. How I make (some) money: http://thecontextofthings.com/hire-freelance-writer-ted-bauer/

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