Stop Blaming the Employer!
Over the past few days I've had several people tell me that business is taking advantage of employees. When recessions hit, the employer exploits the situation in his favor, to the employees' detriment. While this may be the case in some situations I don't think it is in the majority of cases.
The employer may be an easy target in this situation, but the anger and frustration is misguided. The ability of an employer to pay an employee stems from demand for the employers product. If the demand shrinks, then his demand for employees with the skill to produce the product shrinks. With shrinking demand comes shrinking revenue. Without revenue to pay the bills, including payroll, expenses have to be reduced. There really is no other choice here if the business wants to remain viable.
There are several reasons why demand might shrink. There are two overwhelming reasons in the current situation that I see. First is that consumers (including businesses) have reduced or are reducing their spending, this directly translates into reduced demand. The second is globalization is providing real competition for technology related skill sets. If you can't differentiate yourself and provide real value it is hard for any employer to justify regular salary increases. Remember the employer must compete with other companies that can and will take advantage of these cost differences.
Another cause of reduced revenue is the inherent idea of consumers to want to buy the cheapest items possible that satisfies their need. With companies competing for the limited spending, this directly translates into less revenue for the company that you are buying from. The reduced revenue means reduced employment, but also means the most efficient business will be successful and will add jobs once demand increases. In a world of global competition keep this in mind when you think that your employer is not being fair. He is working in a world where to survive he has to make the best economic decisions to keep the business operating and competitive.
What can you do to change this and improve your situation? Learn new skills that makes your company more competitive. If you can show that your new skills bring value to the company then most employers will be willing to share that with you (remember it may take some time to actually realize revenue from your new skills). If they aren't then maybe it is time to find a new employer. You can bring value by selling jobs, learning new skills that are in demand by current clients or by increasing efficiency and thereby reducing costs. If you are not willing to do anything then you really only have yourself to blame.
If you are feeling like a victim of the current recession my advice is to get up and do something about it. Learn something new, at no time in history has there been such valuable information available for free. Help make your company more competitive and you will come to realize that taking action is a much better path than dwelling on your perceived misfortune.
Comments
This post was inspired by Thomas Friedman's op-ed in the times. In the article he describes how cheaply a company could produce a video based on globalization. With these and the free services available online, you can't get much cheaper and thus produce much less revenue.
Good topic, Steve! I think many also blame the employer because of the negative publicity that has been released over the past 2 years. Many hear about the enormous irresponsible acts of huge corporations on television and begin to think that everyone must act like those companies. It is unfortunate, because most companies do not act in the publicized ways you see on the evening news but are forced to make cost cutting decisions to preserve the livelyhood of their own businesses, largely due to the effects of many poor decisions by a few powerful people and corporations.
With that said, I do not believe consumers are always looking for the "cheapest" product or service. It is because, at least in my opinion, most fail to make themselves any different than their competition that it seems consumers are searching for the most price conscious alternative. If a company, sales person or product do not differenciate themselves as solving a need, want or desire, than the consumer uses common sense and gravitates towards the best price, but if someone truly stands out from the rest as a solution to a need, than they will inevitably create a more successful business and gain a great deal of sales, clients and contracts. After all, buying is largely emotional. In short, I am trying to say that I do not think consumers are "cheap," I think there is a lack of presenting a solution rather than just a product.
Good points Harold, I qualified cheapest with "satifies their need" because I agree that if you differentiate yourself you can show the consumer how you provide more value. I was trying to use the customers utitility to drive home the point that there are economic forces that put pressure on employers to keep costs down and productivity up.
I'll throw in my $.02 from the employee point-of-view, an employee in the IT industry --in particular.
Like most others, web development started out as a hobby that eventually evolved into a career. I took a lot of time to analyze the industry before I decided to pursue it. What I found was an extremely over-saturated market, where quality of work spans the gamut of horrible to mind-blowing, from dirt cheap to astronomically expensive. One of the huge questions that all peers ask, whether freelance or full-time, is “how do I value myself”?
For most people, I found that they try to find what others charge for similar skill sets and try to price themselves accordingly. Regardless of how often they make that amount, that is their “value”. Maybe I was raised differently, but I established my “value” based on how consistently I can pull in any amount. Harvey Reese, author of How To License Your Million Dollar Idea says something to the effect of “don't try to make a million dollars once, rather make one dollar a million times”. What that meant to me is that I needed to keep extending my skill set; an ideology that I've never stopped abiding by.
When you ask “What can you do to change this and improve your situation?,” I think it is very important to note that genuine work ethic is an extension of character and not just a front you put on for a paycheck. People like myself are constantly striving to better themselves, and therefore their knowledge, their work, and ultimately the facility they work for. Additionally, those type of people are also looking to see what they can do to improve a situation even when things are good. I am a programmer because I love to problem solve, and I refactor because I love to improve; regardless of the surrounding situation, my work is who I am.
I don't fear outsourcing, or underbidding; to me – it is not a sign of impending doom, but rather the constant motivation to stay agile in a competitive industry. I've been working long enough in the web world to conclude a well-tested theory: genuine hard work and intelligence will always win the war even if it looses some battles to low-cost / low-quality gimmicks. Outsourcing may be winning some battles, but they've also established a pretty negative connotation in the process – so I simply stay aware of outsourcing as a competitor, but not fearful of it as a possible victor.
Surely, you will see an employee's true colors when times get rough, and the same goes for the employers. I completely agree with Harold; people suspect their employers because we hear the echoes of horror stories from other companies, and, unfortunately sometimes, from companies we were formerly employed at– it's human nature to stay fearful and on the defensive. No worker ever wants to have to blame the employer, but they also don't want to be naïve to the situation when an employer isn't looking out for us. To conclude, I agree with you - no one should be blaming their employer, if they feel that they have done everything they can to keep themselves valuable, and the employer has done everything they can to keep the company valuable.
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