Sunday, September 30, 2012

"I Like to Fire People"

Ed Frauenheim, a senior editor at Workforce, wrote a blog post last week that caught my attention as a full-time HR professional and a part-time political junkie.  He ties Mitt Romney’s 47% video comments to Romney’s business executive views of the modern labor force.  The post, titled “The 47 Percent: Romney's Misguided View of the 'Employment Deal'” outlines how Romney labor world view is from another time, not suited to today’s workforce challenges. 

As a refresher, here is what Mitt Romney said at a fundraiser in May, revealing his true feelings about American workers at the lower end of the wage scale:

"There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax…[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."

Frauenheim hears something else in these words, and he writes:

Implied is a view of a company where employees are costs to be minimized rather than assets to be valued and developed. It is a management mindset that reigned in the 1980s and 1990s. The corporate raider ethos, eager to lay off employees in the pursuit of quick profits. In fact, there's evidence Romney embraced or practiced this philosophy as head of Bain Capital.

We HR folks grumble about this all the time.  HR people whine about wanting “a seat at the table”, which translates to “we want respect on matters of financial importance to the company”.  We resent operations executives who view the workforce as an expense to be reduced instead of an asset that deserves investment, development and training.  We argue that labor as an expense is a short-sighted view; labor as an engine of profitability takes the long view.  Effectively developed, nurtured and deployed, labor creates profitability; it does not diminish it. 

“Labor is an expense line” – according to Frauenheim, that’s the business philosophy that Romney would bring to the White House.  It’s not just anti-labor; it’s wrong for the future of businesses in a competitive global economy.  Look at the companies investing in their workforce and winning the profitability battle – Southwest Airlines, Google, FedEx, The Container Store. 
He outlines the historical shift in industry’s approach to labor management: 

An employment deal that offers employees little in the way of security and treats them as necessary evils may have led to higher bottom lines for a while. It also may have served as a correction to the overly paternalistic compact around work in the 1950s, 60s and 70s: the one that saw companies give nearly guaranteed employment for life in exchange for employee loyalty.

Romney did get the evolution of the workforce memo.  He continues:

But companies can no longer be dismissive about their employees. Research shows that layoffs generally are not a strategy for success, that companies that are better to workers and to their stakeholders overall outperform peers in the stock market. Consumers increasingly want to do business with kind companies. And this just in: 75 percent of Americans would not take a job with a company that had a bad reputation, even if they were unemployed.

Romney wants to run for the Presidency on his business acumen, but his business acumen regarding workers was sharpened in another era into a philosophy that does not work in 2012 and beyond.

In short, Frauenheim concludes, “Romney's remarks reflect a version of the (employment) deal that is outdated and doomed.”  It makes you wonder what kind of direction he would give to a Secretary of Labor in a Romney administration.   


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