business career

Loyalty is dead (Part I)

Tuesday, February 02, 2016 Peter A. James




Yup, it is dead. But despite how the title of this article comes across, this is not a bad thing. Let me start out by showing you why this is such an important topic for you and organizations today. Here are few stats and headlines:
  • In May of 2013, companies took 1,301 mass layoff actions (BLS).
  • Total voluntary turnover in 2014: only 110% of the workforce (Compensation Force).
  • Preemptive layoffs continue to be common in today's corporate culture (Workforce).
But don't get mad at capitalism, corporate America, or your company for that matter. Because if you were an executive in any company that has downsized in the past ten years, you would do the same thing. My old adage is this - why have loyalty for someone or something that you don't know or think has loyalty for you?

That being stated, let's take a look at how and why this loyalty discussion is important for you to understand and ultimately, what you should do about it.

For you, the employee

A buddy of mine got his dream sales job a few years ago. He was super-excited. I mean really amped. He just finished college about a year earlier and was sending out resumes feverishly. At the time, he was working for a well-known car rental business that was working the hell out of him. He hated it. So, he got on with a new firm and began the process of sales training. He was on-board, eager, and already loyal. Unfortunately for him, the organization was going through a major crisis. Previous quarterly sales numbers did not sit well with the board of directors and shareholders. A downsizing ensued which targeted new hires among others. He was immediately given a severance package. He was crushed; and ultimately bitter. His dream job vanished into thin air.

Unfortunately, this could happen to any of us. And it usually catches people off guard. But the signs are usually staring us right in the face. I don't know about you, but I don't like the idea of riding anything until the wheels fall off. I hate to be surprised when I can help it. I hate to be disappointed when I can avoid it. Yes, these types of surprises are worse when you have a family who is depending on you.


You’ve heard the terms

Just in case you are not familiar with all of the terms that can crush your loyalty, I thought I would define them for you with a bit of commentary (thanks to Merriam-Webster):

Layoff - the act of ending the employment of a group of workers - this can occur for any number of reasons. As an example, if two companies merge, the headcount is plentiful and it does not make financial sense for the organization to carry so many employees.

A recent article in Fortune stated “Layoffs are often a sign of failure by top executives to properly manage a business and forecast needs — and failure of board members to ensure that the right management is in place”.

Downsizing - to make (something) smaller; to make a company smaller and more efficient by reducing the number of workers. In today's work environment, companies are continuously looking for ways to be lean. Since the recession in 2008, this has and will be a common theme. You've heard this one before, “Do more with less.”

Reorganization - the act or state of being reorganized; especially, the financial reconstruction of a business concern. Board of directors and senior leadership are always searching for ways and means to streamline their business. The goal: to increase profits and reduce expenses. And as much as we like to think we are an asset to any company, when it comes to financial accounting, you are an expense. (aka - labor).

Rightsizing - to make a company smaller and more efficient by reducing the number of workers. This term is closely related to the two previous terms, and it’s another term that likes to get tossed around in companies.
RIFs - reduction in force - self-explanatory.

Outsourcing - to send away (some of a company's work) or to be done by people outside the company. It is much less expensive to pay a contractor than a full-time employee. Think benefits, paid-vacation and expense budgets.

Ultimately, you will hear of and come to know these terms well. But after reading this article, don't be surprised or blindsided when you hear them - they are coming.

Why it happens

As was stated earlier, once you understand the process, it makes it a little bit easier to swallow. If you, the employee do not have a pulse on the organization, these types of actions will almost always catch you off guard.

Companies are in business to make a profit - even if their cause is a noble one. For that matter, even not-for-profit organizations need money to stay afloat. Many have and will downsize as needed. The fact of the matter is that no reduction in force is a personal one. Unless you have been identified as someone who “we are working out of the company” (that will be a forthcoming article - stay tuned), these actions hold no grudges and are only executed to benefit the bottom line. If you get nothing from this article, please remember at the end of the day, you are just a number on the books. It is up to you to demonstrate your value both internal and external to the organization.


What can I do?

I’m glad you asked.

Make yourself resilient and understand the process. Realize first and foremost that if you were in a leadership position you would probably have to engage in one of those terms we defined at one time or another.

Organizations need you to be loyal, if they are to be successful. As an example, they work hard to sell you on why what you do benefits both the organization and society as a whole.

Here is an example. Just think about a time when you were provided phenomenal service at an establishment. You more than likely returned because the service was great, not because of the quality of the product. Companies realize that a loyal employee is a more productive and an overall better employee. Loyalty will ultimately translate into greater sales, revenue and ultimately profit.

Today, organizations are trying hard to get employees to be loyal. Especially the good employees, so know who you are and who you work for.

Lastly, it would be stereotypical of me to say that all organizations are selfish. There are a few companies out there that do everything possible to demonstrate their loyalty to their employee (i.e. The Container Store, Scripps Health, Wegmans Food Markets). And they should be commended for this.

Before your next job

Statistics show that most of us will work for 7-10 employers in our lifetime. We will leave any one employer for a myriad of reasons (to include personal ones). That being stated, I would be remiss if I did not provide a bit of guidance for anyone who reads this article. So, here are a few things to think about for your current or future employer:
  1. Know what you are walking into. Know the industry, its history and where the company is headed.
  2. Research the leadership. History always has a way of predicting the future. Similar to major competitors. Interview them just as much as they are interviewing you. Know beyond the shadow of a doubt this is the place for you (and not just because of the money).
  3. Don't be naive.
  4. Always stay one step ahead of your company and career. It is your responsibility to decide what your next move should be, not your bosses.
  5. Put your priorities in order. Realize this is just business. And this a place of business. Although you give 110% daily, they should never take your heart and soul.
Don't let this article demoralize you - let it be what you need to take control of who you are loyal to in your life. Remember that when you are loyal, you are yielding a certain amount of control to someone else. However, if that is what you choose to do, please ensure they deserve it.

Peter A. James: Coach, Accountability Partner (AP), Professor | threefirsts.com | @drpaj

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