How much do we value one another in the workplace? As it turns out, this question is becoming quite a serious ethical issue and as a business ethics keynote speaker, business ethics consultant and author, “employee value” is taking on important aspects.
The reset
We started really think about employee value in 2021, when tens of millions of workers walked off jobs, topped in November of that year when 4.53-million walked through the corporate doors and said they had enough.
To say the mass migration was due to “anger,” or “laziness,” is sheer folly. Speaking on business ethics as I do, I knew the reasons that force an employee to give up and leave an organization are quite complex. In the latest Edelman survey, employees clearly wanted employers to “see them,” to allow for more human dignity, equality and safety. As a business ethics consultant, I do find those issues to be ethical, especially in tight job markets where unemployment is low and choices are many.
In an article for Fox Business (September 4, 2023), business writer Breck Dumas interviewed labor management consultant Jason Greer, who talked about wage compression,
“When a longtime employee’s wages have not kept up with market demands but new hires make the going rate – is breeding resentment that is silently destroying companies and many do not even know it.”
In the interview, Greer provides the scenario of an employee who has worked with a company for 10 years… and is capped at a certain wage rate because they have been with the company so long. Then the company hires someone new to do the exact same job, but at a markedly higher wage…”
The tactic is not only undermining but insulting. It tells the loyal, long-term employee that they aren’t valued while the new hire is more valued. In taking that position loyalty is lost and the recipients of the wrath are the new hires. The dynamic is called wage compression and it frequently suppresses workplace interaction. Why should a long-term employee making less than a new hire (doing the exact job) help train the new person?
Said Jason Greer on the mindset of the long-term employee:
“We [no longer] have trust in our organization. We have no belief that they’re going to do the right thing by us. So, let’s go get a third party in the form of a union to actually negotiate our rights.”
The other option is simply more long-term employees are quitting. They know they can find similar employers who are willing to pay them more with better benefits. Meanwhile the companies they leave have to go through hundreds of thousands, if not millions in interviewing costs, background checks and training.
A matter of culture
Greer continued: “…the biggest blow for companies is that they are losing long-tenured employees who are really the lifeblood of their respective departments but were never recognized for it.”
If a company has a reputation for being ethical, customer service driven, creative and trusted, who carries on those traditions in the light of massive lay-offs? It is also important to note, and in my role as a national business ethics keynote speaker, business ethics consultant and book author, I know that the backbone of a company are not necessarily managers and executives but those “in the trenches” who understand the nuances of policies, procedures and a navigation of the system.
Often (and I mean this) those valued employees are the culture of the company. When they leave a company, much more than a blank position on the organizational chart is created.
It is a matter of recognition. To pay a new employee more than an experienced, loyal and effective older employee doing the same job, is to destroy the very fabric of the organization. The ethical imperative of business ethics is, of course, to be fair.
How are long-term employees regarded? Are they fixtures or contributors? The Edelman survey I mention above, stressed the desires of employees for greater human equality. This is a real thing and an ethical construct that wage compression has taken away.
Employers are going to be forced to decide if they value an ethical culture or a culture of expediency. The consequences of that choice must be heavily weighed.
