Stretching people • 19 February 2008 • The SnowBlog
Stretching people
Have you seen the CMI survey which says British managers work, on average, 40 days of unpaid overtime per year? When I used to work in retail head offices, it was normal to work, say, from 8 until 6:30, with a half-hour lunch break. That would total up to around 50 hours a week. So it was always slightly upsetting when my payslip, along with everyone else's, said 32 hours per week on it. And we weren't eligible for overtime pay because we were too senior (which in my case wasn't really very senior at all). But try to leave at 5:30 and you'd hear cries of 'half day is it?'. If you made a habit of it, you'd be in trouble come annual review time. It was never clear to me how working only slightly more than one's contracted hours could be seen as under-performing, but that was the culture in every head office I was at. These things always start out temporary and become permanent. And in some places I've worked, the new question was whether people would work some or all of the weekend as well. I imagine that's become even more common now that companies have decent computer networks and laptops for all managers. You can do your unpaid overtime from the comfort of your own home. Perfect.
Wherever I went, I also noticed lots of people 'temporarily' doing a more senior role. If a manager left, one of her subordinates might be asked to take over, but without a pay rise or formal promotion. It was 'good experience', but that situation might last a year or more.
There would also be a few people who left who weren't replaced. The team would just have to cover the empty slot. Put all these things together and you could run a business using only 80% of the workforce you'd need if you didn't stretch everyone's hours.
That would allow the wage bill to drop significantly, which is usually the single biggest outgoing in a company. So a culture of unpaid overtime would fund a company's profits for several years. Of course at the end of that period everyone would have to stay permanently on what looked very much like an emergency footing, and the company would have to look somewhere else to make its cuts or boost its income.
And the purpose of all is this miserliness is to keep shareholder dividends up. But increasingly I'm mystified by that idea. If you gave the profits to the staff instead of external shareholders you'd be able to pay them all properly. Which would mean you'd have 100% of your workforce, happy and well motivated, with which to challenge your competitors who were pushing 20% fewer staff to give up their weekends.
Sure, in the early days of a business, shareholder investment is needed, but later on in a company's life, investment is rare. A mature company becomes a cash cow. If the start-up and expansion money came from loans (or bonds) instead of selling off the company as shares, most big businesses would have long since paid it back.
But doing away with shareholders is unthinkable in the current climate. Why? Because a well run employee-owned company could be sold and milked, yielding a decade's worth of profits. So no one thinks it's strange for a company employing ten thousand people to squeeze most of them in order to pay dividends to faceless external investors. I sometimes imagine a world in which everyone works for minimum wage so that one investor somewhere can own the world. Would we still think of boosting profits in a world like that as 'economic growth'?
Personally, I'd like to see relative tax breaks for large employee-owned businesses, because after all, their profits are going straight into communities. That has to be better for the country than profits which end up overseas or in city funds.
That's why I'm always delighted when John Lewis Partnership defy perennial predictions of their demise and instead thrive. And they do so by rewarding staff and trying to be honest and fair with customers in a way which conventional business wisdom would say is naive to the point of commercial suicide. And yet people notice the difference and they love it. I sincerely hope that in the future more businesses will be employee-owned. Because then, when you pull out all the stops and work weekends, it will be to build up a company whose success includes you and not one in which success means giving as little back as possible.
Rob
Have you seen the CMI survey which says British managers work, on average, 40 days of unpaid overtime per year? When I used to work in retail head offices, it was normal to work, say, from 8 until 6:30, with a half-hour lunch break. That would total up to around 50 hours a week. So it was always slightly upsetting when my payslip, along with everyone else's, said 32 hours per week on it. And we weren't eligible for overtime pay because we were too senior (which in my case wasn't really very senior at all). But try to leave at 5:30 and you'd hear cries of 'half day is it?'. If you made a habit of it, you'd be in trouble come annual review time. It was never clear to me how working only slightly more than one's contracted hours could be seen as under-performing, but that was the culture in every head office I was at. These things always start out temporary and become permanent. And in some places I've worked, the new question was whether people would work some or all of the weekend as well. I imagine that's become even more common now that companies have decent computer networks and laptops for all managers. You can do your unpaid overtime from the comfort of your own home. Perfect.
Wherever I went, I also noticed lots of people 'temporarily' doing a more senior role. If a manager left, one of her subordinates might be asked to take over, but without a pay rise or formal promotion. It was 'good experience', but that situation might last a year or more.
There would also be a few people who left who weren't replaced. The team would just have to cover the empty slot. Put all these things together and you could run a business using only 80% of the workforce you'd need if you didn't stretch everyone's hours.
That would allow the wage bill to drop significantly, which is usually the single biggest outgoing in a company. So a culture of unpaid overtime would fund a company's profits for several years. Of course at the end of that period everyone would have to stay permanently on what looked very much like an emergency footing, and the company would have to look somewhere else to make its cuts or boost its income.
And the purpose of all is this miserliness is to keep shareholder dividends up. But increasingly I'm mystified by that idea. If you gave the profits to the staff instead of external shareholders you'd be able to pay them all properly. Which would mean you'd have 100% of your workforce, happy and well motivated, with which to challenge your competitors who were pushing 20% fewer staff to give up their weekends.
Sure, in the early days of a business, shareholder investment is needed, but later on in a company's life, investment is rare. A mature company becomes a cash cow. If the start-up and expansion money came from loans (or bonds) instead of selling off the company as shares, most big businesses would have long since paid it back.
But doing away with shareholders is unthinkable in the current climate. Why? Because a well run employee-owned company could be sold and milked, yielding a decade's worth of profits. So no one thinks it's strange for a company employing ten thousand people to squeeze most of them in order to pay dividends to faceless external investors. I sometimes imagine a world in which everyone works for minimum wage so that one investor somewhere can own the world. Would we still think of boosting profits in a world like that as 'economic growth'?
Personally, I'd like to see relative tax breaks for large employee-owned businesses, because after all, their profits are going straight into communities. That has to be better for the country than profits which end up overseas or in city funds.
That's why I'm always delighted when John Lewis Partnership defy perennial predictions of their demise and instead thrive. And they do so by rewarding staff and trying to be honest and fair with customers in a way which conventional business wisdom would say is naive to the point of commercial suicide. And yet people notice the difference and they love it. I sincerely hope that in the future more businesses will be employee-owned. Because then, when you pull out all the stops and work weekends, it will be to build up a company whose success includes you and not one in which success means giving as little back as possible.