Wednesday, September 2, 2015

Let's not lose sight of the class and inequality issues bound up in here

Maternity leave in particular and employee benefits in general are always an odd conjunction of hard economics and utopian euphoria. It is nice, if you ignore the fascistic overtones, to think of the company as a large family looking after its own. Sometimes benefits policies do indeed address particular employee needs in such a direct way that they do materially improve critical performance measures such as unplanned employee turnover. More often, benefits become a fixed cost that ratchets up during boom times and do not fall during bad times. Even if employees are happy with their career at a company, there is almost always high resistance to the removal of benefits once they have been "earned." Resistance so high that bankruptcy is preferred over adjustment (think of the auto industry.)

The problem is hard economics. Benefits are too often treated as a low cost signalling mechanism to employees (and the external market) rather than as specific value propositions. Only as long as they serve some beneficial function (which can be translated into financial benefit) are they in any sense worthwhile. If a year long paid maternity leave costs $100,000, it still makes sense if the fully loaded cost of finding, on-boarding, and training a new replacement is greater than $100,000. But if the person is doing a fungible job with little cost to simply replacing the person, then there is little business sense in paying that $100,000. It is money spent with no immediate benefit. There still might be some overall benefit based on overall employee morale, but that becomes very hard to measure.

And there are so many hidden costs and issues. This is all brought to mind by this article, Big Leaps for Parental Leave, if Workers Actually Take It by Claire Cain Miller and David Streitfeld.

There's the usual rah rah cheer about companies doing good by their employees, with a special call out to doing well by their female employees.
Some corners of corporate America have a new message for new parents: Put down that laptop and pick up your baby instead.

Even as employees are increasingly tethered to the office, a workplace culture that urges new mothers and fathers to hurry back to their cubicles is beginning to shift.

In recent weeks, companies like Accenture and Microsoft said they would offer more family-friendly benefits like generous parental leave. The trend may be a sign of a tightening job market, at least for a certain segment of highly skilled performers.
The broad focus of the article, above the cheerleading of family and female friendly policies, is the question about whether giving new benefits is meaningful if employees don't actually use those benefits. Its nice, as an employee, to have the choice of taking a paid year off to be with your newborn and a guaranteed job to return to. But if you are in a demanding position with limited turnover, perhaps you are unwilling to step off the escalator for a year. Yes, you'll have some job to return to, but will it be the job you want?

These are absolutely legitimate personal and professional considerations and I think that many policies are designed with the anticipation that few people will take them up. The company gets to brag about being progressive and generous but it doesn't actually have to pay much or anything to be seen to be progressive and generous.

The article falls into the usual bromides, tropes and cliches.
Highly educated women have become more likely to believe that an ambitious career does not preclude children. And the competition for elite workers has become so fierce that companies are searching for new ways to recruit and retain them.

“The U.S. may be behind on family-friendly benefits, but I see it’s changing, because we’re all facing a talent war,” said Julie Sweet, Accenture’s chief executive of North America.
I am all for generosity and especially keen for companies to be accommodating of families and employees with family obligations. But let's be pragmatic and realistic. Whatever we do has to be done within the context of individual and corporate productivity. And let's not delude ourselves about the real impact.

From this article, look at the companies that serve as reference points of innovative and generous benefits: Accenture, Adobe Systems, Goldman Sachs, IBM, KKR, Microsoft, Netflix, Twitter, Vodafone, and Yahoo. All representatives of the pinnacle of new economy companies. All are fiercely competitive. Half of them won't be around a decade from now. But they (and their ilk in their sectors) are perhaps 1% of employees in the US. And it's worse than that. Consider this paragraph.
Just 12 percent of workers in the United States private sector have access to paid family leave, according to the Department of Labor. White-collar workers are often expected to have a singular focus on work: Amazon, which a recent New York Times article showed fosters a bruising atmosphere, offers no paternity leave. For blue-collar workers in most companies, leave is even less common. Netflix, for instance, did not give its leave to hourly workers.
The article is talking about an issue, paid leave, that only affects 12% of employees and the examples of generous leave come from sectors that only represent some 1% of the 12%, so 0.12% of employees. And the benefits are targeted towards female employees (about 30% of employees in these sectors) so affecting, in all, about 0.04% of employees.

Let's not lose sight of the class and inequality issues bound up in here, all this talk is about benefits for the elite in elite industries. Middle class? You are not part of this. Blue collar? Don't even think about it.

If you want to signal to me about how well you treat your employees and how progressive you are, talk to me about how you are making all your employees more productive, how you are looking out for their interests. Telling me about how generous you are to the 1% (and less) of your most productive employees doesn't make you a good company.

Remember that most these companies in the tech industry have recently settled a class action suit based on their industry practice of coordinating to reduce competition among each other for employees, thus keeping down labor costs (and therefore cheating employees of higher income). They are also the companies who are constantly lobbying for more relaxed H1B1 visas so that they can wholesale replace their middle management technical employees with cheaper labor from overseas.

It is not the companies' actions which gall me. Well, maybe a little sometimes. It is the New York Times' hypocrisy or cluelessness. If you want to be a leading media voice in the campaign for reduced income inequality and increased social mobility, fine. But you can't take that position and simultaneously gullibly celebrate the press releases these companies are pushing as to their flexibility and generosity to the 1% of the 1%.

You have to look at the whole picture. Benefits cost money. How is the company making all its employees more productive and who is accruing these benefits? If the company is not making its employees more productive and/or if the company is showering all these benefits on a very small, very elite group of its employees (which may be necessary to be successful) then don't talk about being innovative, progressive, and cutting edge.

No comments:

Post a Comment