What Ails Corporate America?
For millions of workers who are no longer satisfied with their current jobs and are looking for new positions, the 2007 employment market will be full of opportunities. Companies that do not keep all employees engaged, including senior executives, "will create a fast moving conduit of quality candidates that feed their own competitors and their own failure," is the prediction of staffing professional and author Eva Jenkins.
An upward swing will continue towards a large range of high-quality job opportunities that is being offered to a shrinking group of candidates, and Jenkins says, "When it comes to employment, it is a true Sellers' Market. The ability to retain staff will be just as important as finding new employees." Jenkins speaks as a leading authority on human capital management, and the driving force at VIP Staffing and VIP Innovations in Washington, D.C.
Jenkins has found a direct cause-and effect relationship between leadership and business failure while examining traditional corporate culture and finds that valuable "human capital" is lost to CEO's who only look at business from a "value-per-share perspective," and the business is doomed to fail when it wastes its assets. "When senior executives began a mass exodus, companies will find themselves 'rotting' from the inside out, empty and eviscerated," says Jenkins.
People no longer remain at companies for life and studies show that the average worker in America will have three to five careers and between 10 to 12 jobs in their lifetimes, marking a decrease in company loyalty and a tight job market factors. Executives receiving huge life compensations, corporate scandals and disappearing pension funds have all worked to undermine employee faith in their employers, causing employees to look for better opportunities elsewhere.
CEO's are not totally to blame and they too may feel at risk. "Executive Pay Compensation is a double-edged sword. Boards are more willing to approve astronomical compensation packages because of their own greed and desire for someone to produce profits," says Jenkins, but these boards will also oust a CEO if the company and stock do not perform to their expectations. "This means even the best-intentioned CEO's who truly value their workforce will change the way they do business to ensure that board members and stockholders are happy about company earnings," observes Jenkins and that causes CEO's to become short-sighted and self-protective. Even the most humanistic CEO can "become little more than greedy robots doing whatever is necessary to show a profit," Jenkins adds.
The loss of low-and mid-level employees is costly to companies, although not a fatal blow, but the loss of senior management can be a challenge to the success of even the most stable company. While the cost is steep to constantly hire and train new staff, losing vital, experienced upper-level executives can shake a company's very foundation.
There were common reasons found in research studies noting why employed executives are not satisfied with their jobs, including limited opportunities for advancement, lack of challenge or personal growth, and unfavorable company prospects. Jenkins feels that the company itself is the key to staff retention.
The dominant characteristic of current corporate culture is fear, not support, according to Jenkins, noting the fear of upper level employees that they may become the Board or CEO's "scapegoat" for missed earnings, leads senior execs to down-play bad news while keeping a positive personal profile. The result is a breakdown in communication. Because they fear being held accountable, executives are hesitant to point out problems, so the problems are not addressed or solved. Clear communication is vital to eliminate the fear factor, she notes.
CEO's seldom hear the candid truth, so the real message may not get through. In order to correct this, CEO's need to keep senior executives informed and have a realistic and truthful attitude that will result in proactive not reactive decision making. "This gives executives the confidence to continue to thrive as professionals." Jenkins concludes. "It creates an inter-connected corporate environment that rewards team effort and success, and encourages healthy growth rather than fearful stagnation."