Do you remember the “Gold Watch”
Do you remember the stories of companies gifting their long serving loyal employees of 25 years and above with Gold Rolex watches?
How come companies stopped giving gold watched to their long time employees? Is it because of the increase in the price of gold or the current generation of employees are not loyal and jumping ships to something better and profitable.
Just like the Rolex Gold watch, Company loyalty is a thing of the past.
How many people do you know that have been with their current employer for more than 10 years?
Well according to the US Bureau of Labor Statistics it’s actually 29% of people, which sounds suspiciously high until you consider that a vast majority of this group are made up of workers on the verge of retirement, which is important to remember for later. Amongst all workers in the US the median was just over 4 years.
In fact multiple studies as written in a Forbes article back in 2014, have suggested that full time workers that stick with their employers for more than two years on average get paid FIFTY PERCENT LESS. This is an unbelievably large gap, ESPECIALLY when you consider that the average of the loyal working group will be drastically inflated by senior executives and the C Suite who tend to have more tenure.
In plain English, for regular Joes and Janes like you and me, this 50% figure is likely understated. So why aren’t companies stopping this? Surely having to pay tens of thousands of dollars to advertise a position, interview candidates, onboard new staff, train them and wait for them to get up to speed with their new role is not sustainable if it has to be done over and over again every 2 years… right?…
Well you would think so, but there are a few reasons why companies don’t care about employee loyalty… anymore…
Here are the factors that are ruining the aspect of company loyalty –
- An abundance of skills
- Standardization of tasks
- Broken corporate ladders
- Changing demands for roles
The changing demands for roles in the corporate workspace is a huge factor in company loyalty. Your current role is going to be obsolete in a year or two with the introduction of new technology and new ways of working. This means that while you are working and are loyal to your current employer, you are going to be replaced shortly after.
Technology has created new jobs while simultaneously made several job roles redundant. Good example, is the job postings where you will see several openings for Blockchain Developers, Machine Learning Engineers and Cloud Engineers. You will also see a rising demand for Digital Marketing specialists than a need for a telephone switch board operator. The rapid change in our world is changing our career paths, naturally your job can be either replaced by a machine or even a software, you are most likely going to be kicked out pretty fast.
But this goes both ways, we are seeing folks changing their careers because the financial payout is much better in the new career. One example, is the construction worker entering into digital marketing space to be a Social media manager as the pay is 3-4 times better.
The abundance of skills to the employers is another factor that is changing the labor landscape. The Educational attainment is at all time high, having a college degree is a rarity. Companies do well for themselves by hiring new recruits for few reasons, firstly they are cheaper and younger than their older counterparts. They are also willing to put the long hours to make sure that their projects are delivered.
The Big 4 accounting firms are notorious for this – PriceWaterCooper,Ernst & Young, Deloitte and KPMG. They offer widely recognized graduate programs that pay terribly an expect massive sacrifice. These companies offer these with the mutual that almost none of these graduates will stay on with these companies and seek out higher paying jobs and a work- life balance; once they have committed their two years for that resume boost.
Both these parties know what they are getting into here, The Big 4 get a cheap pool of talent young recruits for a few years and those overworked get to put the graduate programs on their resume so they can get a higher paying job with a regular company. The regular companies hires these ex-graduates and love this system for 3 reasons. The first one is that these ex graduates from these programs have been through a trial of fire and experienced heavy workloads. the second reason is that these graduates come with useful industry insights with pre-loaded skills that would be necessary for their new work position at a regular company. These graduates already have the knowledge of the basics of the business functions, operations and insights of their competitors
The truth is the best way fro businesses to stay on top of their industry is to make sure they have a healthy supply of of talent coming in from their competitors. This becomes quite clear with the rise of globalization. The rise of offshore centers, skilled migration and access of getting talent from all over the world. Even the entry level jobs which are posted are open globally. The advent of work from home policies and technologies has made it possible.
Businesses love to hire outside, particularly for their senior positions as it prevents chain reactions in staffing aka. broken corporate ladder. Companies hiring from within sounds great , but it only works in theory. There are problems with this system as the roles of the company are filled internally by experienced folks, there is still a learning curve to be acquired to make their new senior roles successful without any issues or delays. The alternative is to hire a senior manager from the outside and not worry about the nonsense of being familiar and taking time to be 100% successful in a short amount of time. Another plus point is that the company can take away the talent of a competitor in its industry.
Other factor I would like to point out is the standardization of tasks in the workplace. I’m sure we all are familiar in using emails and even most of the Microsoft office suites. The adoption of computers have massively improved office productivity. The spreadsheet prepared by bookkeepers several decades ago, can now be prepared by an intern using Excel spreadsheet in less than 30 mins.
If you are in sales, business development, accounting , customer service etc , if you are using a computer, you are most likely using a industry standard software suite to maximize your productivity and performance. You can imagine, the on boarding process which would take several weeks can be drastically reduced.
An example I would like to point out is the role of a bank manager back in the old days to our current time. The bank manager in the old days was at par with a doctor or a lawyer. IT was a BIG DEAL.
The skill sets of a bank manager in those days requires you to have a deep understanding of business functions, industry know-how, local economy , national economy as well as banks financial processes etc. The bank manager needs to be a great communicator and relationship builder in the community to attract business. On top of that he needs to make the decision to approve or reject a loan. Now forward to the present, the Bank manager is a glorified customer service role. The decision making in underwriting loans and approving credit cards are all done by an algorithm or an offshore team.
The above information definitely sounds depressing , but it doesn’t have to be. The dream of having a stable job for 40 years is most likely dead, but the current reality we are experiencing is refreshingly honest. The reality is that companies are there to get the most out of you, until a better alternative comes along. While you are with the company till a better alternative comes along.
Switch jobs, the statistics show that its better to switch than stay loyal to a company. You will be better of for it. You have learnt that the only way to climb the corporate ladder is to switch between the corporate ladders. The employers are going to screw you, they are a business and not a charity.
So screw them back, get your amazing LinkedIn profile updated and looking good and accept any certifications and trainings they are willing to offer. Remember that you will not be rewarded for your loyalty.
Be brave and move to better opportunities whether it be a new job, freelance opportunities or even venture into the realm of business and entrepreneurship.