The Washington Outsider

In A Pro-Employee Job Market, Employers Need To Make Strategic Plans To Deal With Turnover And Job Vacancies

10/8/2018

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​More people are working and working more hours.  This has helped push the median household income for Americans up to nearly $63,000.  Unfortunately for American workers, the booming economy that has created more work for them has not compelled employers to increase the real wages of workers according to Ryan Nunn, the policy director of the Hamilton Project at the Brookings Institute.  For household incomes to remain high and continue to rise as fewer workers become available to enter the job market and current employees max out their capacity to work longer hours, employers will have to increase wages.  They will, of course, only have a reason to do so, if they wish to retain their seasoned employees in a competitive job market or they need to attract new employees from a shirking pool of the unemployed.  Businesses, which do not meet the interests of their employees, will soon have to make strategic decision on how they will handle increased employee turnover and increased job vacancies.
​Employees are going to exit their current place of employment for three main reasons in a job market favorable to them.  One, they do not feel they are being paid what they are worth and they feel they can get more elsewhere.  Two, they feel they are working too hard for too little and want to find an easier job that pays them near the same amount.  Three, they do not like their current work environment or schedule.  For employees, the solution for employers is easy: “raise my wages.”  For employers, who must look at issues like employee turnover in budgetary terms, it is not so straightforward.  First, the business must be able to afford raises.  If it cannot, it must restructure itself to shrink to a size where a smaller staff can handle the workload and the business can earn a profit.  Second, employers must consider the future as today’s pay increases will become a permanent expense, even if revenue shrinks.  Third, employers must be strategic in how they issue raises.  Not all employees are equal in terms of their productivity and value.  The goal of offering raises is, after all, to ensure adequate staffing levels and retain the high-value employees who do mission critical work.
 
When a business sets a minimum wage, e.g. Amazon’s minimum living wage of $15 per hour, it is telling employees what it is willing to pay them to meet the basic expectations of their positions.  The right amount depends on the job market, employee expectations, and the workload.  Anything higher than the minimum wage must go to those employees who are needed to do work that exceeds the work and skill sets of basic employees.  Higher wages must also go to seasoned employees who ensure the company runs smoothly.  The simple truth is all potential hires, outside of recruitment efforts, understand they will not be paid as well as seasoned employees.  They will, however, look at how well seasoned employees are paid and treated when determining where they are going to work.  Strategic wage increases that favor high-valued, seasoned employees are, therefore, instrumental when trying to attract new employees as well as retain old ones.  Because employees are not equal, the finances of all business are limited to varying degrees, and high-quality employees tend to resent raises going to those who do not pull their weight, it is not necessarily wise or beneficial to raise the wages of all employees or the starting wages of new employees.  
 
When businesses experience major transformations through growth, market shifts, or crew rotations, it is often necessary to reevaluate the company’s needs and restructure.  The basic idea is to more efficiently use human resources, i.e. squeeze out wasted time and get more things done right in less time.  For a lot of companies, they have already done a great deal to maximize the efficiency of their workers, so it is necessary to ease the burden on the high-quality, seasoned employees in order to retain them.  In recent years, more and more employers have relied on part-time, seasonal, and temporary workers.  It is a necessity for some businesses that will never go away.  As the old saying goes, however, “you get what you pay for.”  Part-time, seasonal, and temporary workers are often a cheaper alternative to employing a workforce of full-time employees, but that cheapness comes at a cost.  Many of these employees are either low-performing and/or ill-trained, which makes it necessary for high-valued, regular employees to direct them, i.e. provide an adequate level of supervision.  Businesses lacking the proper structure to handle lower-performing employees need to restructure their operations to handle the lack of productivity and performance.
 
From the business perspective, “how low can you go” is the payroll mantra. The answer depends on how willing customers are to forgive quality issues.  Businesses with generous refund policies, picky clients, and high prices likely have a very small tolerance before their cuts start to threaten the survival of their business.  Looking at the fast food industry, for example, few workers can expect to rise above their near-minimum wage incomes.  To simply minimize quality control issues associated with low-skilled workers, fast food businesses rely on automation, pre-made products, centrally dictated assembly-line production systems, heavily structured training procedures, and layers of supervisors and trainers.  Businessmen attempting to run a company like a McDonald’s can, expect to provide products and services with the quality of a fast food joint.  While low-quality food and numerous order errors are expected by customers, fast food workers struggle to use new technology and make allegedly complex menu items.  
 
Industrialized companies like McDonald’s essentially take professional skills, i.e. cooking, and convert them into step-by-step instructions.  Instead of grilling and garnishing a burger then plating it with a side of fries, workers are trained to prep ingredients and assemble product units.  They are no longer cooking.  They are building units of burger, fries, and drinks.  The process is “unitized,” the work space is tailored specifically to the tasks at hand, and the tasks involved are laid out in detailed task chains.  The process is more akin to building a Lego set than cooking.  McDonald’s, which patterned its operations after those of the industrial sector, is far from unique.  Most major chain businesses have adopted industrialized operations to ensure consistent and high-quality results.  To be successful in this approach, however, businesses must have the proper oversight structure.  The longer the task chains, the better trained, more thorough, and higher performing workers need to be.  Key employees, who ensure lengthy, i.e. linearly complex, task chains are properly executed, are on par with the professionals, craftsmen, and artisans these task chains are supposed to supplement, thus they must be paid in accordance while enough of them must be kept on the payroll to supervise the lower-performing workers.
 
The simple truth is that businesses with ill-defined jobs and complex task chains can expect to falter when using the labor practices of the fast food industry.  A business seeking to increase the professionalism of its employees while suppressing wages and cutting hours can only expect to do so by paying a sufficient number of core employees to train and supervise temporary, seasonal, and low-performing employees.  This means employees doing mission critical tasks need to be retained.  Businesses need to entice their “heavy lifters,” who get the most work done, their “taskmasters,” who organize and motivate others, and their “standard bearers” who maintain the standards of the business, to stay.  Not only do they need to retain these critical employees, they need enough of them to compensate for the fallacies of new, low-preforming, and error-prone workers.  Failing to recognize worker performance is not equal and relying on weaker workers can transform minor tasks into costly errors and lead to a massive number of these costly errors.
 
For business leaders, who embrace the need to solve problems, raise standards, and treat their workers as respected, professional members of a team by retaining quality workers, the interests of their workers matter.  Fulfilling the needs of employees who take care of the company is the only way to effectively increase productivity and cut costs.  Addressing the emotional and social needs of all employees can do a lot to motivate employees and increase productivity, but the financial needs of core employees must, ultimately, be met first.  The minimum living wage is the wage someone needs to make in order to sustain a modern lifestyle and, therefore, the true cost of a person’s labor.  Those making below the local minimum living wage are running personal budget deficits, which they can only sustain for so long.  Today, that minimum wage is rising, but wages are not.  Regrettably, this means, even if they enjoy working at a particular company or doing a particular job, workers cannot afford to work their jobs.  Because financial interests are measured in incomes, both wages and hours matter, thus employer efforts to freeze or cut the incomes of critical team members force them to seek employment elsewhere, which can easily harm the business, productivity, and profits in unanticipated ways. 
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        • On Questioning the Need to Address Economic Disparity
        • Minimum Wage is Not the Problem
        • Responding to the "Blip"
        • Why Education Is Not The Civil Rights Issue Of The Twenty-First Century
      • Considering the Impact of the Capital Gains Tax Deduction
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      • Primary Education in America and the Changing Needs of Society
      • The Greatness of the American Education System
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      • Is Engaging Parents in Their Children's Education a Major Factor in Turning Around Low-performing Schools?
      • Should Grants Be Awarded to School Districts that Try Innovative Methods to Improve Student Achievement?
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        • Are We Losing Our Second Amendment Rights
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      • Should a Woman Have the Right to Choose Abortion? >
        • Should Fathers Be Able to Opt Out of Parenthood?
      • Should Smoking Be Allowed in Public Places?
      • Is Teen Driving a Right or a Privilege?
      • Should US Companies Be Required to Provide Equal Pay to Women and Men?
      • Is eighteen too young to vote?
      • First Amendment Rights: The Priviledge of The Press
      • Do Mandatory Seat Belt Laws Violate Individual Rights?
      • Should cell phone use be banned while driving?
      • Dealing with the link between video game violence and children's behavior
      • Should police have to submit to routine drug and alcohol testing?
      • Public schools should not impose mandatory drug testing on students
      • Are High Taxes on Cigarettes Proper?
      • Should pharmacists be required to violate their religious beliefs and dispense the "Morning After Pill?"
      • Should school counselors uphold patient privacy or report students who become unstable?
  • For the record
    • Ongoing Issues >
      • Red Dawn in Ukraine: Understanding the Actions of Russia >
        • On Russia’s Coercion of Ukraine
        • The Russian Annexation of Crimea in the Eyes of the World
        • Putin Has Overplayed His Hand With Crimea
        • Ukraine in Terms of Resovereignization
        • Avoiding a Conflict Between America and Russia Over Ukraine
        • What Drives the World’s Interest in Russia’s Actions in Ukraine
      • China’s Aggressive Pursuit of Interests Demands a Global Response
      • Iran Makes a Deal: A Start to a Long-term Diplomatic Effort to Denuclearize Iran >
        • On the Future of a Nuclear Negotiations with Iran
      • America's Sphere of Influence: Retaking South-East Asia >
        • Power in Asia: Looking at the Power Shift in Japan
        • The China Paradox: Why America is Worried About China
      • Assessing US Support of Israel >
        • Tread Softly Israel for a Heavy Step May Be Your Undoing
      • Understanding the Dysfunctional Nature of the US-Pakistani Relationship
      • Recognizing the True Threat Behind the Current Unrest in the Middle East >
        • Reacting to the Escalating Crackdown in Syria
      • Assessing the Threat of North Korea >
        • Answering North Korea's Call for Food Aid: Breaking the Vicious Cycle Forced Upon Us by a Warring Nation
        • Dealing with the Restarting of the Korean War
        • North Korea Attacks South Korea
      • Dealing with the Ill-effects of Climate Change
      • Racial Inequality and Oppression Do Truly Exist in Today's Society
      • Should energy independence be a high priority in the US?
      • An overview of world wide Human Rights violations
      • Nuclear Threat from Pakistan
      • Return of The Cold War?
    • World >
      • Coverage of FIFA World Cup is a Chance to Focus on Poverty >
        • The FIFA World Cup Offers Benefits for More Than Brazilian Soccer Fans
        • FIFA Can Bring Brazilians Together as a Nation
      • Being Prepared for Any Potential Dangers at the FIFA World Cup Games
      • Treading Softly on the Politicizing of the 2014 Sochi Olympics Over Gay Rights
      • Why NATO Operations in Libya Lack a Well-defined Mission
      • China Hijacks the Web
      • Lessons from the Great Japanese Earthquake of 2011
      • A Modernizing Cuba Offers an Opportunity for Capitalists
      • The Seeds of Democracy Take Root in the Middle East
      • The Rebirth of Democracy in Tunisia
      • What May Come from the Hurt Revolution in Libya
      • Responding to the Violence of Qaddafi and Other Besieged Leaders
      • Embracing the Rise of a Democratic Egypt
      • Protests in Afghanistan Turn Deadly for Coalition Forces and UN Personnel
      • Haiti: Another Failing Humanitarian Investment
      • What Karzai Can Learn from Calderon
      • START II: A Necessary, Easy Success that Nearly Failed
      • Why Does the U.S. Government Support Independence for the Breakaway Serb Territory of Kosovo but Oppose Independence for the Breakaway Georgian Territories of Abkhazia and South Ossetia?
      • Iraq's Electric Issues: When Human Wants Trump Economic Sense
      • The International Community Reacts to Wikileaks: We May Be Moving Toward a Third World War in Cyberspace
      • On Climate Gate
      • Assessing Obama's Afghanistan War strategy
      • 2009 Iranian Presidential Election: The Fallout
      • Resolving Sri Lankan Conflict through Free Media
      • What are the Global Consequences of Russia's Invasion of Georgia
      • The War in Iraq: an assessment of President Bush's surge strategy
      • Drug War: Actions of Venezuela, Columbia, Ecuador in terms of Resovereignization
      • Is the Iraq Refugee Crisis America's Responsibility?
      • US support for a united Kosovo, Abkhazia, and South Ossetia: why?
      • Should the US withdraw from Iraq?
      • Setting a Timetable for Troop Withdrawal from Iraq is a Terrible Mistake
      • War on Terrorism is needed
    • Law and Order >
      • Rape in the US Military
      • Ethics of Force-feeding Guantanamo Bay Detainees
      • Reacting to the Aftermath of the Tucson Massacre
    • Economy >
      • Affordability Drives Fear of Obamacare and the Individual Mandate
      • Is the Economy Built for a Job's Recovery?
      • Gutting Healthcare Reform of the Individual Mandate
      • Arizona Budget Cuts Lead to Lethal Healthcare Rationing:
      • Shameful Collection Practices of American Banks
      • The Fed Reveals it Actually Undertook an International Bailout
      • Thoughts on French Budgetary Reforms
      • Seniors Start Businesses
      • The Case for Slimming Down the US Military to Make it Better
      • Looking at the Obama Administration's New Approach to Economic Policy
      • Should the Government Regulate the Credit Card Industry?
      • The Big Three's Big Chance
      • The Unhealthy Tone of the Healthcare Reform Debate
      • Should the federal government offer a bailout for home owners?
      • Environmentalists: Do They Do More Good Than More Harm?
      • Responding to Scott Walker's Contribution to the War on Unions
    • US Government >
      • America Needs to Focus on the Impending Fiscal Crisis
      • Reacting to the Bush Era-tax Cut Extension Deal
      • Quitting the Obama Revolution: The Fickle Nature of American Politics
      • John Boehner's Circus
      • Is the Fed Putting Itself in Jeopardy?
      • Wikileaks Goes After the US State Department
      • Discussing the Political Environment Surrounding the 2011 Budget Debate
      • What the Democrats Can Do to Ensure a GOP Year in 2012
      • What the 2010 Midterm Actually Said
      • Congresswoman Kathy Dahlkemper
      • Democrats Minus Nancy Pelosi Equals Opportunity
      • Terrorists Go Postal: The Terrorism Threat Reexamined
      • Victory in the 2008 Election: Reaction to Barack Obama'a Win >
        • Expectations for Barack Obama
      • President Obama's first one hundred days
      • John McCain's Negative Campaign
      • Reasons People did not Elect John Mccain
      • History judges the George W. Bush Administration
      • Should the next US President focus on domestic issues?
      • President Bush, should he resign or be impeached
      • Should the Ban on Government Sponsored Assassinations be Repealed
    • Off Topic >
      • A Face of America’s Greatest Generation
      • A Story About a Man Who Made the World a Better Place
      • Making the World a Better Place
      • The Bipolar Ethical Nature of Google
      • Learning Computer Plays Jeopardy
      • Verifying Medicine is the Real Thing
      • Taking a Practical Step Forward in Optical Computing Using Slow Light
      • Scientists Take a Closer Look at How Lithium Batteries Work
      • Remarking on the First Blizzard of the 2010-2011 Winter Season
      • Driving in the Snow: Acceleration is the Key
      • How People in Northwest PA Are Coping with the Increasing Cost of Oil
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