From my friend Ed Gordon....
Gordon Report
Special Talent Alert
"How to Lose Business Talent"
IBM is cutting the pay of certain workers in one of their
divisions by 10 percent for a six-month period while they are enrolled in
company-provided training to acquire new skills and expertise. In the current
fight for business talent this seems a peculiar move for a knowledge-based
company!
At one time IBM led the IT industry in employee development.
Their corporate motto was "THINK". In fact, IBM University was an
accredited educational entity that awarded college degrees to its workers. IBM
also has been active in developing the P-TECH early college/high school career
academy in Brooklyn, New York. It is a public high school, open to all
students, that enables students to graduate in six years or less with a high
school diploma and an associate's degree in either computer information systems
or electromechanical engineering technology. IBM has put together a free guide
for developing similar academies in other U.S. cities.
Why is a corporation that has long been known for its
generous range of incentives for promoting employee education and training,
seemingly without prior warning or consultation now begun penalizing some
employees by deducting an arbitrary proportion of their salary for the time
they will be receiving training that IBM judges necessary to address future
needs? We can only speculate that this move is part of the prevailing
short-sighed cost-cutting continuing across the U.S. business community.
Company investment in plant and equipment and R&D is also stagnant.
As the profits of U.S. publicly traded companies generally
remains high, what are they doing with these funds? Stock repurchases today are
running at record levels. Edward Luce of the Financial Times reports
(9-22-14) that between 2003 and 2012 the top 449 businesses in the S&P 500
spent $2.4 trillion, more than half their profits on stock buybacks.
Many executives today receive stock options or stock awards
for meeting performance goals. These incentives encourage driving short-term
value from the companies they manage. Creating future values by in investing in
equipment, R&D, or their human capital is not on the table.
Let's hope that other wiser managers prevail at IBM and
rescind this move that threatens to weaken its employee talent base and
undermine morale. However, what can we expect if IBM's short-sighted and
regressive talent move prevails and is adopted by other businesses as the new
wisdom on the street? U.S.competitive advantage will decline as the current
employee skills gap continues to grow.
Edward
E. Gordon is the president of Imperial Consulting Corporation (www.imperialcorp.com). His latest book
is Future
Jobs: Solving the Employment and Skills Crisis (Praeger, 2013).
Business continues to ignore the fact that although this recession has eased considerably, there continues to be a worker shortage - actually more of a skill shortage, along with the mentality of offering low pay. The idea that workers can foot the bill (as above) for the necessary training the company needs for a competent staff may be a bean counters dream, but it will adversely affect morale. I agree with Ed and the outcome in todays world is for the word to spread by going viral with the technically savvy younger workforce. Unintended consequences of this move will show up eventually. Does IBM really want to jepardize their workforce further?
Jim McShane
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