How Wall Street Ruins Employee Engagement
If you received this call, knowing it’s the holiday season, what would you do? You would do what you have to do, wouldn’t you. That is what my friend Will did when he received this call the other day. The company he works for has over 600 locations nationwide.
Just think about the savings in payroll that can be added to the bottom line over the 3 week period before the end of the year. That’s exactly what the corporate leadership team thought. But what cost does this type of thinking have on long-term employee engagement?
“Wall Street is Running the Company”
I was telling Will’s story to my friend Terry. He and Will have never met. Terry has been a long-time mentor of mine and I greatly respect his advise. I sure hope you have a Terry in your life. When I told him what Will had experienced he said, “Oh, so Wall Street is running the company.” He quickly rattled off several short-term benefits of the strategy taken by this company. He then stated, ‘but look what they are sacrificing.”
I asked Terry, “What do you see as the sacrifices?”
Sure enough; just a quickly as he ran through the short-term gains he doubled that list with the long-term damage. While he was running through the list I was able to quickly recall several conversations I had with Will about his struggles with meeting his job objectives. There were 3 things Terry said that were directly connected to employee engagement during numerous conversations I had with Will in the past few years. Frequent conversations revolved around Terry’s statements of:
- It will be more difficult to replace worker knowledge
- The company will struggle to meet future objectives
- The ones that remain will be less loyal
Replacing Worker Knowledge is Difficult
The company Will works for has a seasonal business. In December and January they invest a lot of time and effort hiring people for their peak season. Over the last several years Will has experienced ever increasing difficulty in hiring. Will has had to spend more time and money in recruiting and interviewing to find people worth hiring. Instead of hiring this December he was laying off. You can be assured their peak season still requires planning. In January Will is going to have to do everything faster and more of it. His fear is that the people let go will be unavailable or if he can get them hired back it is highly unlikely they will be engaged to perform at better-than-average levels. Can you blame them? Who would want to give it their best effort after being treated this way.
The Company will Struggle in the Future
Have you ever had a new job that required no training and had no learning curve? Can you think of any job like that? The reason Will had to terminate these people was not due to their poor performance. Most of these people were positive contributors to the company, and they were trained. Now a larger percentage of new untrained people will be in the company to meet the demands for peak season. Now instead of leading and maximizing performance, the branch leaders will be investing most of their effort in training people and working on engaging the employees hired back or survived the layoff. Do you think the leadership team can outmaneuver the competition and optimize performance when most of their time is spent teaching and trying to rapidly increase employee engagement?
Those Remaining will be Less Loyal
Survivors were given more reason not to be engaged and get the heck away from this company as soon as the chance presents itself. This is what happens when people see how companies treat employees. They work for you until they find something better; they are dis-engaged. Also, the people that find the opportunities first are the high performers, leaving the rest behind.
Do you wonder how long Wall Street can be permitted to run the company before they hit the wall and experience a boomerang affect? Is it foolish to think this cycle of churning people can continue to go on and the company not be criticized by the investor community?
So what is Will going to do for this busy season? He is going to be learning something new. He turned in his notice a few days later to pursue a better opportunity. His boss offered him more money to stay, but he said “no way”. 10 years of experience, gone forever…good going Wall Street.