23 October 2006

On Employees Who Quit

An interesting article from TODAY:
No points for this loyalty programme
To retain star employees, companies should reward committed workers, rather than long-stayers

Monday • October 23, 2006
Liang Dingzi

IS STAFF loyalty passé? Are we clutching at straws, refusing to recognise that in the changing, competitive world, this value is no longer as important a corporate asset as it used to be?

At a job interview several years ago, the chief executive officer (CEO) of an eminent company said to me: "If a person has not changed jobs — at least twice — in his first 10 to 15 years, it gives the impression that he is easily contented with being what he is." That, he explained, reflects a lack of ambition to want to do better.

With so much lamentation today about the fast erosion of the loyalty culture, many Singaporeans are unlikely to agree with him. What price staff loyalty, then? Is it still relevant?
Personally, I agree with the CEO. Of course there are exceptions. For example, an outstanding employee may stay for a long time because he keeps getting promoted.
The debate thus far has been fairly one-sided — from the companies' point of view. Management consultants talk about the importance of staff loyalty contributing to the bottomline. The findings of a recent survey by research firm Synovate attest to the readiness of Singapore workers to change jobs at the promise of higher salaries ("Staff loyalty key to bottomline", Oct 16).

Unfortunately, that has been put across as something negative. But if competition is healthy, why is this not encouraged in the employment market?

If an employer is concerned about losing its competent workers to rival companies, it is up to it to offer adequate compensation that will deter resignation, while acknowledging that there are other influencing factors such as job security, prospects for promotions and a conducive work environment.

So, too, if an employer is concerned about recurring training costs because its workers do not stay long enough, it will have to factor in that risk. It's not the fault of workers when they leave. The current discourse on the dilemma of displaced older workers may have overplayed the issue of loyalty — in this case, company loyalty.

The real problem is not the lack of such, but rather job security and the perceived worth of workers after a certain age. They are deemed too costly when there is a cheaper alternative of younger workers.
Aha. Liang Dingzi offers an insight. Some of these non-movers are staying put, because of concerns about job security.
An ex-classmate, who was laid off six years ago from an accounting job, continues to harbour misgiving about being written off just because he had reached that certain age. Many others like him were axed in cost-cutting exercises during the economic downturn. The good news that today, the employment rate has reached a 15-year-high — with the biggest gain made in the 55 to 64-year-old category — only partly assuages concerns.

The other question being asked is: What becomes of rewarding staff loyalty?

Mind you, seniority has become a convenient measure of "loyalty", for both the workers and the many companies that continue to salute long-serving staff. To quote NTUC's director of industrial relations, Ms Cham Hui Fong: "We have to look after the interests of our older workers, who have put in long years of service."

That makes it obligatory. But if employers can no longer assure workers of job security, is it fair of employers to demand staff loyalty? The expectations, one might argue, must be mutual.

Understandably, employers find themselves in a bind when better workers leave, since they are the ones likely to be offered opportunities. The less competent — who, by circumstances, stay — are rewarded for their "loyalty".
Heheh. The less-competent do not merely just "stay". Sometimes they can steadily rise through the ranks of a not-so-excellent organisation, simply because the more-competent ones have already departed or keep departing.
This Catch-22 demands a shift away from the traditional mode of compensation — paying workers by grade and job category — which, in a way, has contributed to the problem of obligatorily carrying higher-paid but less productive older workers.

If merit were the key determinant instead, staff loyalty would no longer be held to ransom by seniority.

But if staff disloyalty costs companies dearly, staff loyalty could cost workers — which was the essence of the CEO's message at my job interview.

Singaporeans are practical people. According to Synovate, they are nothing short of model employees.

This is borne out by many productivity studies, such as the Beri report, that laud our workers as being amongst the world's most reliably efficient. But while they are enthusiastic and focused, they are unlikely to swear loyalty.

And, if you think that's a blemish in an otherwise perfect report card, it's about time we look at staff loyalty from behind the lenses of the workers. As the work ethos changes, what is going to matter more is commitment to the job, rather than loyalty to the company.

In that context, neither party can cry foul.
The way I see it, individuals owe it to themselves to do what's best for their own careers. If you ought to move, then you move. In fact, changing your jobs every now and then may be the best way to stay relevant.

That's because when you move into a new job, the fact that this new job exists in the market reflects that there is demand for the particular set of skills or knowledge which this new job requires.

Better organisations will make efforts to work out a career path for their employees, providing training opportunities, promotions, internal transfers, competitive salaries etc. Sometimes however your continued progress within that organisation will no longer be possible, or no longer possible at the pace you want.

For example, in some situations you may not be able to progress any further unless your immediate boss resigns, dies or gets sacked (and the probability of any one of these events occurring seems low). Or your current organisation may simply not be able to offer you work which is as challenging or interesting as you would like it to be.

In those circumstances, the best thing to do may simply be to go elsewhere.

In my opinion, employee loyalty is passe. As Liang advises, you should give your best to your job while it's still yours, but neither you nor your employer should have any expectation that you will be a permanent fixture in that role.

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10 comments:

Christopher Ng Wai Chung said...

Mr. Wang,

Well said. While I've never tendered from a company before. I agree that loyalty is passe and Singaporeans should look out for number 1 when it comes to their career.

But there should be a distinction between switching a job over a couple of bucks and switching jobs because it presents a geniune opportunity for progress. It's actually very hard to tell whether something offered to you is such a great deal. After all, what happened to the previous guy doing that kind of work ?

American MNCs like the one I work for are ruthlessly unsentimental with their older workers who are past their shelf life. But we stay because we are owners of company equity and look forward to getting more when we get more customers.

If local companies want loyalty. Keep the pep talk to themselves and stop teh motherhood speeches on loyalty.

Instead, insitutute a workable profit sharing agreement and the people would stay because of the invisible hand.

You can't exploit workers forever, they'll think of ways to fight back.

Mr Wang Says So said...

Oh, you can always ask whether it's a brand new role or a replacement role, and if the latter, what happened to the previous guy ....

Indi said...

i wonder how IKEA HR Department could have managed an average of 15 years tenure worldwide.

I think loyalty programs are important but it is more important to have the right people for each job.

Anonymous said...

Love your job but never love your company. You will never know when your company don't love you any more.

Anonymous said...

Just as importantly, you must make yourself, and keep yourself, lovable to all your potential employers out there.

Anonymous said...

Mr Wang,

"Better organisations will make efforts to work out a career path for their employees, providing training opportunities, promotions, internal transfers, competitive salaries etc. Sometimes however your continued progress within that organisation will no longer be possible, or no longer possible at the pace you want.

For example, in some situations you may not be able to progress any further unless your immediate boss resigns, dies or gets sacked (and the probability of any one of these events occurring seems low). Or your current organisation may simply not be able to offer you work which is as challenging or interesting as you would like it to be.

In those circumstances, the best thing to do may simply be to go elsewhere."

Do you think people should be loyal to a country that behaves like a corporation then?

Anonymous said...

"Who gets the risks? The risks are given to the consumer, the unsuspecting consumer and the poor work force. And who gets the benefits? The benefits are only for the corporations, for the money makers."
- Cesar Chavez

...smells of elitism...

"Corporations cannot commit treason, nor be outlawed, nor excommunicated, for they have no souls."
- Edward Coke

...really not sure i want my country to be run like a corporation. there's more to citizenship than profit.

Anonymous said...

sorry.

Cesar Chavez

Anonymous said...

When I was an audit senior, I was ever asked by my juniors: "what's the secret to career longevity in the life-threatening and blood-boiling audit industry"

Well, I said: "If you love your job, you don't work a single day." (similar vein to Mr Anonymous)

But I din tell them, I WORK everyday...

Anonymous said...

If you look at the type of HR policies in place, we should not be surprised that Singaporeans have little or no loyalty to Singaporean employers.

http://lemondroplets.spaces.live.com/blog/cns!26F399664A850E81!304.entry

The above article appeared in the TODAY newspaper in May 2006, and has to date, no responses from NTUC, MOM or any headhunting companies. Says so much about the amount of love and care split between the tripartie relationship.