The Business of Business is Not Business Anymore; It’s People

Want your employees to be loyal to you and your company? Start treating them like the adult human beings they already are.

Have you ever worked for a company or interviewed with one where they claimed, “People are our best asset!”? My advice? Run away as fast as you can. Not because they acknowledge the importance of people, but because they think people are assets. Human capital might as well be human cattle. My all-time favorite is the use of the word “headcount” which gets straight to the core of this misguided mindset — you are just a thing. Not a teammate. Not a colleague. Not a human being. You are just an object. A commodity. A number in the P&L. Like Thing 1 and Thing 2 in The Cat in the Hat. If you are just headcount on their books, then you are replaceable, at any moment for any reason.

Also, “Thing 1,” you cannot be trusted! You must be in the office every day and look and act busy at all times. If I cannot see you physically doing the work, how can I know for sure it is getting done? This paternalistic approach (also known as micro-management) to treating adult employees like children (or worse), needs to end. How about you judge my performance based on the efficiency and effectiveness of my output and not on the false appearance of productivity? In fact, it has been proven over and over again that spending long hours in the office and on late night calls, just because, is counterproductive (which deserves its own blog post). Just think about it this way, if your people have adult, human, personal stuff (whatever it may be) that is not taken care of outside of work, then how focused do you think they are going to be when it comes to taking care of your business?

Employers — listen up! The tables are turning, especially on those executives who continue to put profits ahead of people (which is just silly because people who perform to their full potential will make you boatloads of profits — it is all about sequencing!). According to the U.S. Bureau of Labor Statistics, approximately 4 million workers are quitting their jobs each month in America, which will be almost 1/3 of the workforce quitting in 2022. Couple that with record low (below 4%) unemployment AND there being nearly 17 million open and unfilled jobs in the U.S. The market is now tilted in the employees’ favor, and I hope it stays that way indefinitely. It is no longer about organizations asking themselves, “Is this person worthy of being one of us?” It is now about organizations asking themselves, “Are we worthy of attracting and keeping the best people?”

It is no longer about organizations asking themselves, “Is this person worthy of being one of us?” It is now about organizations asking themselves, “Are we worthy of attracting and keeping the best people?”

I have read a lot recently about how “just” companies are doing well by doing good. And how companies that report on their reductions of carbon emissions and other Environmental, Social, and Corporate Governance (ESG) efforts are doing better or will do better financially than those that do not. I think we are getting way ahead of ourselves. I am all for saving the environment, as long as we save the people first. It is like we jumped to transcendence and self-actualization on Maslow’s Hierarchy of Needs before we laid a solid foundation of physiological and safety needs. In other words, do you really believe your employees care about what you are doing to save the planet if you also forced broad brush layoffs during the pandemic? Do you think your value-signaling on social justice issues matter more than paying people a living wage and good health benefits?

Once upon a time there were employees who would work for the same employer for an entire 30-to-40-year career. Job hopping and job sampling were unimaginable — you would never throw away your hard-earned years of service to start all over again. At the same time, owners and employers would jump through hoops to avoid layoffs if possible because they knew when the economy turned around, it would be hard and expensive to hire, onboard, and train new people. Many employers looked after their employees long after they turned in their company badge. Employer loyalty did not just come in the form of a gold watch you might get after a couple of decades. There were fully funded pension plans that provided guaranteed income in retirement. There were substantial healthcare benefits that would bridge the gap for you and your family until Medicare and Social Security kicked in. If you put in your time, then you could ride off in the sunset, confident you left things better for the next generation.

Owners and employers figured out that employees are expensive. Salaries are expensive. Healthcare is expensive. Pensions are really expensive. Maybe we should just have them figure it out themselves. They started thinking about their people as one big cost line item in the P&L to optimize. Employees went from being the one thing that made any organization or company possible to being just another asset for management to try and get the highest return on. We stopped calling people — people and started calling them human resources or human capital. They weren’t humans with lives and families anymore, they were just headcount on a P&L that needed to be reduced.

This lack of employer to employee loyalty has led us to where we are today. For many workers who want to work and provide for themselves and their families, things are not looking good. Millennials, people born between 1981 and 1996, are the first generation where less than 50% are doing better financially than their parents. This percentage of kids making more money than their parents at a certain age — has been steadily declining and dipped below half for the first time ever. Almost half of all Americans are in low wage jobs. Despite increases in wages by many employers in the last couple of years, that has been more than offset by record high inflation. In other words, that pay increase you thought you got this year over last year was probably a decrease in your spending power. As of 2018, only 17% of employers were offering a traditional pension plan and that number has continued to dwindle. As of today, “41% of U.S. households under age 55, and 32% of households age 55 and older, have not saved in a defined contribution plan or an Individual Retirement Account (IRA), nor do they have access to a pension plan.” Add to all of this the fact that out-of-pocket healthcare costs (premiums and deductibles), especially during the pandemic, are eating up a larger and larger share of peoples’ salaries.

What is an employee, a human, a person to do if their current job can’t provide enough income and benefits to take care of themselves and their loved ones? Quit and find a better job. As I have written before, this is not the big quit, it is the work-life awakening. People are not only looking for a job that is worth it; people are looking for an employer that finds them worthy.

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Dad, dog lover, Marine veteran, Author, Ex-McKinsey Partner, Ex-Accenture SMD, Harvard MBA, USNA alum.

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Nate Boaz

Nate Boaz

Dad, dog lover, Marine veteran, Author, Ex-McKinsey Partner, Ex-Accenture SMD, Harvard MBA, USNA alum.

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