Why Right to Fire (and Hire) May Be in the Employee's Favour
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@scottalanmiller said in How do you guys handle counter offers?:
@IRJ said in How do you guys handle counter offers?:
I think right to hire / fire at will works in favor of employee. I dont quite understand why the rest of the world doesnt do this.
yes, I solidly believe that right to hire/fire is dramatically empowering to employees when you look at the whole. When you look at a single job, it's bad. When you look at the entire workforce and entire careers, it's good. People get focused on the wrong things and spend their time worrying about keeping their one job, and forget about their lifetime level career.
@IRJ and @scottalanmiller
Can you guys expand your thoughts a little on this. I find it interesting as my initial thought was the employer has the edge.
As @scottalanmiller stated above, I am probably in the "worrying about keeping their one job" camp and probably need to get out of it.
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@pmoncho said in How do you guys handle counter offers?:
@scottalanmiller said in How do you guys handle counter offers?:
@IRJ said in How do you guys handle counter offers?:
I think right to hire / fire at will works in favor of employee. I dont quite understand why the rest of the world doesnt do this.
yes, I solidly believe that right to hire/fire is dramatically empowering to employees when you look at the whole. When you look at a single job, it's bad. When you look at the entire workforce and entire careers, it's good. People get focused on the wrong things and spend their time worrying about keeping their one job, and forget about their lifetime level career.
@IRJ and @scottalanmiller
Can you guys expand your thoughts a little on this. I find it interesting as my initial thought was the employer has the edge.
For cheap, unskilled labor or even IT entry labor the employer does have the edge. However, for skilled professional labor the employee has the edge. Especially in a field like IT where there is a constant demand for specialized skillsets.
In the US right now, the IT field is booming skilled positions are very difficult to fill right now. I know several employers that have been looking to fill positions for 6+ months without any difficulty. If you have looked at the job market in the past 2 years, pay has gone up substantially and if you are skilled professional you can land a job in a week or less if you really wanted to put the effort into it.
In a weak economy, its a little more difficult for the employee. However, good employees will still have value and be treasured. It's the ones that aren't on top of their game that have to worry.
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@pmoncho said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
I find it interesting as my initial thought was the employer has the edge.
From an individual employment situation, it levels the playing field. Without R2F the employee has an edge, a dangerous one. You can always quit (or die, or retire, or just disappear, or just stop working) and impact a business rather dramatically. Without R2F, employers fear employees as being essentially weaponized against them and see employees as huge risks to their business because the employee so dramatically has an upper hand. R2F levels this so employees and employers can both severe relationships for whatever reason that they want. So employers don't get an upper hand, employees just lose their upper hand. Now things are equal.
Now should employers and employees be equal? That's more of the question at hand.
Part of the problem with even approaching this question is that the employer can be a Fortune 100 with millions of anonymous stock holders or might be a government agency or a government proxy agency (like healthcare); or the employer might be the neighbour lady needing her lawn mown or a little family business with one or two employees. It might make sense for giant anonymous companies to be at some risk to their employees, but in a tiny business the "employer" is just another worker and getting put at risk for trying to employ someone seems really, really wrong both logically and ethically. Why attack someone just for trying to help employ someone else?
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Now, from a tactical (single job) perspective, R2F provides serious protection to an employee. Your chances of losing that job are very low. And if we are talking about farm or industrial employees in Britain in 1890 then this is a really big deal. The ability for a manual labourer to be mobile and flexible to switch employers was low. You essentially had to work for the one available employer or you were screwed. Moving your family to take another job was almost impossible. R2F was critical to protecting manual labour workers.
Today, those factors are totally different. Unskilled labour is not 90% of the workforce, it is nearly 0%. And most remaining unskilled jobs are small shops (cleaning at a hotel) or just some form of official, unofficial, or corporate welfare (jobs that could be eliminated but are kept just to help provide somewhere for someone to work at cost or at a loss.) When I worked for Burger King even in the 1990s, over 75% of the staff at our store were employed only in a scheme to help employ unskilled workers in the area, they actually caused heavy financial loss to the store and every BK in the state participated. It was straight up welfare programs, probably with tax money. Those employees were actually cheaper to pay to send home because they were only in the way if in the store.
Even rare unskilled labour today is generally highly mobile (and moves willy nilly in most cases), and has loads of employment options, and has the option to try to become skilled labour. Both horizontal and vertical mobility in first world markets is practically unlimited. Even movement between markets is pretty fluid (you can easily work in other countries, continents and regions.) And skilled labour is insanely mobile, and work from home changes everything.
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Much of the approach to thinking around R2F is the problems for an employee when they lose a job. We tend to think of the world in 1800s terms and think about how "a job" is supposed to provide for its employees for forever. This thinking comes from feudal Europe where employees were basically property of a landed business owner who, through heredity, had a nobles oblige to employ ever able bodied man within their property because they inherited not only the wealth to pay them, but also inherited all means of production and even inherited the "ownership" of the employees. So of course, R2F doesn't work there. But that world is gone. Everything about it is gone.
Employees aren't slaves or serfs any longer. And the idea that you want to stay in one job for forever is not a bad thing, not a good thing. Advancement primarily comes from an employee's mobility and broader experience.
So the focus on keeping "a job", while sounding good from historic context, is actually really bad. That having R2F may cause you to lose your job (maybe often) isn't actually a bad thing. It sounds bad, it's bad in that very moment, but it's not a bad thing because keeping a single job, forever, isn't a good thing in the first place.
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All of that is the background, now the big career and economic context.
On an isolated scale, one little company at a time, one person at a time, R2F means that companies are free to hire whenever they feel a need or opportunity. Labour unions want to call it "right to fire", but businesses refer to it as "right to hire." Because having R2F makes a company free to employ as many people as it can, as quickly as it can find a benefit to them. It doesn't have to wait to hire until it has vetted an employee to an absurd degree or vetted the long term need for the skill set to an absurd degree. It can take the chance on hiring someone that doesn't fit the normal mold, it can hire for a need that might not have a long term future, it can hire because it temporarily got busy, it can hire in the hopes that the new employees will generate their own revenue to be able to afford them.
Bottom line: R2F increases the number of employees in total every company can have, makes every company more efficient, and dramatically increases the total number of job opportunities in the job market as a whole. Without R2F, all companies hire only the minimum number of employees that they can, with R2F companies hire as many as makes sense above that minimum number.
What this means to employees is that there are more jobs in total to compete for. This alone raises salaries and reduces the chance of unemployment, for everyone. Everyone wins because the economy as a whole is larger. And as employees move from one employer to another they get more and more valuable. Everyone wins. Companies win by being able to hire quickly and have the staff that they need to be as efficient as possible. Employees win by getting way more job/career opportunities and are able to move up market more quickly.
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Thanks @IRJ (from other thread) and @scottalanmiller for that info. That is very useful and makes a lot of sense. Just wish I would have had that perspective 15 years ago. Things could be different now.
To paraphrase Dr. Phil, only thing worse than doing the "wrong" thing for years is doing the "wrong" thing for years and a day.
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Now someone must lose, right? Yes. R2F benefits employers and all minimally valuable employees. The only benefits to not having R2F is for completely worthless unskilled employees who are trying to get a free ride and not provide value to their employer, but are employed anyway. In a modern market, being forced to retain unneeded or worthless employees is literally just a proxy for welfare, but in the worst possible way. I'm not opposed to welfare, I'm 100% on board with guaranteed basic income, no one pushes it more than me. But it should be centralized and done equally; not used as a weapon to cripple private enterprise. In one case, it empowers the market to get the economy lean and efficient; in the other it makes it bloated and crippled. Welfare should fall on society as a whole, equally - it should not be a weapon to attempt to make employers punished for trying to employ people and then make them have to carry society's welfare. Because that's just an attack on the people you want to empower, encourage, and reward for building the economy.
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@pmoncho said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
Thanks @IRJ (from other thread) and @scottalanmiller for that info. That is very useful and makes a lot of sense. Just wish I would have had that perspective 15 years ago. Things could be different now.
To paraphrase Dr. Phil, only thing worse than doing the "wrong" thing for years is doing the "wrong" thing for years and a day.
I had the benefit of having been a consultant early in my career and made my entire career around R2F. Because of R2F I was able to take nearly ephemeral jobs and was never unemployed, but was never with the same company for long. Quick movement meant lots of experience, lots of opportunity really quickly. And watching those around me who tried to stick with single jobs, single employers for a long time while I bounced quickly really showed me how quickly they stagnated and lost out. I was unemployed less often, and paid more, and had just more fun.
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I also have the perspective of the employer. Every time someone says they don't like R2F, as an employer, I guarantee you that I hear "I want a free ride and I hate anyone who employs people."
In our situation, we have some of the most unlimited R2F rights you can imagine (just comes from our combination of jurisdictions) and we use that to hire almost recklessly - if we see the revenue to create a job, we do. One of our corporate mandates is job creation in difficult markets so feeling "safe" to give someone work is important for us. If we didn't have R2F to protect us, we'd be forced to employ several fewer people and make the remaining people work much harder because we can't guarantee the work will exist into the future.
It's actually because of R2F that we are able to not fire. When you have R2F, you can employ people as long as possible. Without it, an employer if forced to be looking for ways to shed any unnecessary employee anytime that they can because they can't risk being stuck with them. So with R2F we can give employees more chances to improve, more opportunities to grow. Without it, they do one job and if they screw up, you kind of are forced to use the opportunity to try someone else. R2F actually makes having a family atmosphere possible.
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R2F also does other weird things. Like if you have R2F, you have single companies more often. Without R2F you end up with parent companies or investors setting up more isolated companies and if that isolated entity ends up with tons of "stuck" employees then they just bankrupt that isolated company and walk away, taking every employee with it, even the good ones. Everyone loses. But this is how those kinds of companies protect themselves from predatory employees. This makes even good employees get screwed along with the bad employees that weren't adding value. You end up with tons of "casualty" employees. It's a terrible situation, but it's required to make investments less risky.
Example: A tee shirt manufacturer wants to start a printing business.
With R2F: The new business is just a quick department set up in the existing company, new people are hired. As opportunities come up people are hired, or shifted around internally. If one division falters the other might carry it or jobs might shift to whichever side is more profitable.
Without R2F: A new business is set up to protect the original business. Opportunities to move between the companies don't exist so mobility is lower. Only new people go to the new business, old people are essentially trapped even if they want a job at the new place. If either company fails, its' on its own and all those jobs are lost.
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@IRJ said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
In a weak economy, its a little more difficult for the employee.
There is another factor that people often overlook...
When the economy is weak and employees are at risk of being unemployed those former employees also need more ability to self-employ and start their own businesses. But if we lack R2F, it puts those unemployed at risk, too, as it is more costly and dangerous to try to start your own business!
One of the common misconceptions that people often have is the idea of employees vs employes, us vs them, workers vs the man. This doesn't exist. In feudal times when "the man" inherited the ownership and there was no mobility, yeah, it was real. There were two classes and people fell into one group or the other.
But today, the owners and the workers are all the same people. Making unequal playing fields hurts everyone because everyone benefits when all sides work well. We are all in the employment game together.
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The problem with seeing it in individual employee's favour is that the view is based on the employee's mobility, while in real life, many people have not structured their lives that way, and career advancement is not their primary goal.
It is possible to be more mobile, put there are many things that tie people down. In some careers it would be guaranteed you would have to move for a job. So you move for a job, and your spouse starts a business. If you get fired, there are no other jobs in your profession there. Now you have to make the decision if your career or your spouse's business is more important.
Even if you do not have things tying you down. I've attended presentations on the affect frequent moves have on your kids (based on studies of families in the military that were moved around the US), so there are considerations other than career here.
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@flaxking said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
It is possible to be more mobile, put there are many things that tie people down.
Mobility goes way beyond ability to move physically. Mobility also means working from home or taking a different job in the same town. Very few people are limited to a single, local employer and those that are nearly always decide to the locked down in that way voluntarily and move there in the first place for that employer. The idea that you are born to a location and can't move is simply gone. That there is only one potential employer in a town, is nearly gone. That you can't start your own business in town is certainly gone.
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The idea that employers and employees can be equals seem laughable to me. Quiting is the only power an employee has, and it can be very risky for the employee.
For example, if I quit my job I lose my health benefits for 3 months until I qualify at the new job. And if I quit in order to take another job, there is no guarantee that the other employer will honor the employment offer.
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@flaxking said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
The idea that employers and employees can be equals seem laughable to me.
It shouldn't, if anything the employee has more power. The business needs the work, employees don't need the money. Employees can find any work, anywhere. Or just quit and retire. Or take unemployement if fired. Or live off of family.
Companies can't do that. Companies need employees with specific skills to function. Employees of any value have most of the power.
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@flaxking said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
there is no guarantee that the other employer will honor the employment offer.
Employers will tell you, that the same goes both ways. We invest heavily in hiring a new employee, and then they don't show up at all, quit after a few days, etc. Employees can do that and do all the time. It's super common for the company to go through expensive hiring rounds and go person after person before someone actually shows up and does the agreed upon job.
Even here, employees have the upper hand because of the simplicity of their needs (cash) and the complexity of the businesses needs (whatever skills they were hired for.)
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@flaxking said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
I lose my health benefits for 3 months until I qualify at the new job.
You lose those specific benefits, but pick up others. You can actually end up better from that happening in the US at least.
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@flaxking said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
And if I quit in order to take another job, there is no guarantee that the other employer will honor the employment offer.
Work 1099 contracts and there certainly is. You are protected by contract law.
If they hire you on W2 and don't honor the contract, you have employment fraud protection.
R2F doesn't protect from those things, other basic contract and employment law already does.
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@flaxking said in Why Right to Fire (and Hire) May Be in the Employee's Favour:
I've attended presentations on the affect frequent moves have on your kids (based on studies of families in the military that were moved around the US), so there are considerations other than career here.
US military is not a good way to look at how moves affects kids. My kids move all the time and while it does have an effect, it is completely different. Military is moving along with a lot of other things that are part of that situation. Being a military kid has effects on its own, moving is kind of background noise as to how much it will affect you. One can argue that not moving has loads of effects on kids too. One of the reasons that we choose to move so much is literally to avoid the stagnation effects on the kids. So I agree, it's a huge consideration and doing things for my kids drives my career decisions more than anything else and giving up mobility and crippling a career are some of the worst things you can do because you are best able to care for and spend time with your kids when you maximize your career value.
Remember that while R2F might require you to be more mobile, taking away R2F makes your value as an employee decline. Literally you are worth less to every employer, a lot less. So one of the things R2F does is make you more likely to have the leverage to work from home or limit your hours. Taking away R2F encourages employers to be sticklers for enforcing crappy working conditions like requiring your butt to be in the office all day and working you overtime rather than employing someone to handle the overflow.
R2F supports families big time.
