There is a great Simon Sinek video floating around about how companies say employees are important, but don’t really act like it. He lines up the typical CEO hit list of growth, shareholder value, customers and in fourth place, employees. Richard Branson is also a powerful advocate for putting employees first before all else. It makes sense. We want motivated, enthusiastic staff engaging with our customers and going the extra mile.
Japan’s Escalator System No Longer Works
We can’t rely on the Japanese nenkojoretsu system of steady escalator career advancement based on seniority and age. In a global economy, awash with disruptive and competitive technologies, waiting for the best and brightest to become older in order to be given their leadership shot is an opportunity cost we don’t want to pay. There are 1.4 jobs available for those looking for work to choose from. They have the whip hand here not the bosses.
After the Lehman Shock, Japanese companies moved to creating a lower risk work environment by employing more and more people part-time. The thinking was, if the economy tanks again, it will be easier to fire these part-timers than regular employees. This was seen as a positive, a stable buffer against future unknowns. The use by date on this idea however is well and truly over because we are running out of people. Those part-timers are increasingly being absorbed into firms to give them the staff numbers they need, because hiring in people is so fraught.
Demographics are the key to the future
The reality of less and less young people coming into the workforce is creating labor shortages. Women re-entering the workforce and older workers continuing on working is preferred to the perceived social disruption of having immigrants come in substantial numbers.
The recruiting war for talent has been replaced with the recruiting war for anyone with a pulse. Retaining staff will become even harder. Recruiters will have a field day, searching for talent to lift them out of their current firm and place them elsewhere. Automatically, this worker shortage has swung the pendulum to place workers first above shareholder value and customers. However, we are not going back to the cushy old Japan Inc days of “who cares about shareholder value and corporate performance”. People are now at the forefront of company business plans.
Do we have a middle management skillset able to retain our most talented people? Are bosses still thinking they can just hire in new staff easily? Have we replaced the elevation by age and stage with performance evaluations which identify, inspire and mobilise the talent. Do we have the right training in place which will actually lift staff productivity.
The soft skills are where the big gains will come from, as we better lead our teams, engage them, motivate them and keep them. This time around, the workers can more easily vote with their feet and leave. Already 40% of young staff into their third and fourth year at the firm are heading for greener grass. This situation isn't going to improve. Are our company leaders ready for the revolution?
