The Loss of Pensions

This week my professor asked about what do organizations owe their workers. I found his thoughts about “allegiance” to the worker by the organization to be intriguing. 

When I was working as for a contracting group as a Director of Recruiting, Training and Career Development, we had a tough time keeping our workforce onboard. For our 7000 person company, we had a 50% turn over rate. This meant we lost and had to rehire over 3000 people annually. 

It was a tough job. Our goal was to find ways to retain these workers to make our recruiting jobs easier, and ultimately make a safer work environment for our workers. We were never successful. Most of the time, despite our best efforts, worker would jump ship for even a nickel more an hour for a competitor down the street. They would forego the opportunity, training, and relationships they had built with our organization for a minimum increase in wage with a competitor, no matter how many future incentives we tried to communicate to them. 

I wonder how much “pensions” and other long term employee/organization retirements schemes have affected this. I know at our field worker level there weren’t many opportunities to invest in a retirement plan (nor was there much desire by the worker at that level and in that point of their career) but I believe that the lack of “stickiness” that comes from portable accounts like 401K’s and individual investment accounts like IRA’s have made things less sticky for all workers to remain with their companies. In the past there was investment by the worker in the company for the long term payouts and the stability that came with being a part of the organization, and a counter investment of the organization in the worker for their retirement. Now with less far-sighted mechanisms and investments, the organization is quick to lay off workers when their P&L’s demand it, and the worker is quick to jump ship for a small increase in wage. A dynamic that is healthy for neither group.