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Company loyalty is dead and buried, yes

Company loyalty

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.

Ted Bauer

5 Comments

  1. I too feel that 2008 was a turning point for the way many viewed jobs (what a great time to graduate college that was, btw…), almost as if the events of that year traumatized a generation of organizational leaders into being extremely parsimonious with regards to hiring.

    We’re nearly ten years removed from that spectacle, and while MUCH has changed since, it seems the fear created by money and jobs flying out the proverbial window has warped a lot of folks’ minds. “The context of things” (see what I did there?) has changed dramatically, but for many hiring managers and job seekers, a mindset driven by scarcity remains. Some hiring managers have become stingy with qualifications to a fault, and some job seekers continue to operate as if they should be grateful to take whatever’s out there. I suspect both of these forces keep the wheel of shitty hiring and retention practices turning, but I’m still in grad school and haven’t formally researched that yet, so that’s purely hypothetical at this point.

    I’m slowly letting go of the feeling that I should be grateful to take whatever’s out there myself, but it is VERY hard to do. A good number of us were in survival mode from 2008-2013ish; it’s tough to break out of that way of thinking and behaving when the perceived advantages of running lean and mean seem to be applicable in boom times, too.

    I certainly think it’s still possible for companies to create a culture of loyalty, though it takes assembling a team of executives who understand and agree on the value of employee engagement; this is most certainly easier said than done, and my instinct tells me that the hope lies in smaller private organizations and community-based nonprofits that have a smaller set of stakeholders to work with and please. Failing that, maybe we’ll see a backlash over the next few years where employees job hop around and execs begin to learn the consequences of underpaying and undervaluing their staff.

    Cheers, man.

    D

    • You nailed it, as often. The problem is that many people are still competing on cost and from a place of fear. That doesn’t make for good jobs, culture, engagement, loyalty, etc.

      • Thank you sir. Just finished a values-centered leadership course in my grad program. I think maybe leadership at some companies ought to sit down and think hard about what their core values are and emphasize transparency in whatever comes out, even if its just “yeah, we like making money and maximizing profit for our shareholders, lol employee loyalty is for suckers”. Maybe that’d stop some of this “duh where do you see yourself in five years” garbage during interviews that’s supposedly included to test one’s loyalty to a company but is often simply a veiled and highly flawed way to assess risk/cover an HR hack or hiring manager’s ass.

        To me, if leaders were honest with themselves and honest about their corporate culture portending high turnover, they could at least orient their organizations towards project-based environments and find ways to be OK with employee turnover financially and morally. Interviews could be less about finding people who are going to “fit in” and “stay the course” and more about hard skills that advance the bottom line.

        Alternatively, if you’re the kind of org that WANTS people to stick around forever (looking at you, pretty much every company/nonprofit in the Twin Cities I interviewed at in 2014-15 aside from my current employer), identifying core values could be helpful, as you would state during an interview “We look for people who want to stick around for a while and promote from within. Is that what you want out of your career?”

        Inherently, I don’t see anything wrong with competing on the base of cost, but when your mission statement says one thing about the strength of your talent and your behaviors indicate you could care less about said talent, I think that’s when folks like you and I scratch our heads.

        Cheers

        Dan

      • The misalignment between “mission statement” and “how people are brought in” is really the tricky part.

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