With the new financial year craziness wearing off and we settle into our new normal, now is a good time to rethink your strategies. For this year in particular, it is essential that you do this. It is essential that small businesses are on the ball in thinking creatively. Here are some simple tips to Read More…
The human cost of striving for profit
Thu 16 July 2015 - 2:51 pmEditor's Choice | Featured | Growing | Hot Tips | HR | Leadership Advice | Managing | Opinion | PR | Public Relations | Small Business | Strategy
Are the people who work for you no more than a means to make money? While our natural desire is to maximise profit, there is a point where the human cost is too high. Although profit is measured by dollars on the bottom line, the size of that profit can be a measure of how you treat people. Sometimes it is the processes we put in place that damage people.
Dollars before dignity
‘Hannah’ is a Registered Nurse in an Aged Care facility, caring for the sick and frail, while her employer treats her like an untrustworthy teenager. When she arrives for work Hannah registers with a thumbprint to show she is on time. A computer automatically docks her pay if she is more than six minutes late.
Hannah’s days involved frenetic, unceasing high stress activity: caring for dying and distressed patients, managing demanding family members and overworked staff, attending urgent staff meetings, checking and tracking dangerous drugs, briefing doctors, maintaining detailed notes of every interaction or comment (mainly to help in the event of litigation). Although Hannah is penalised for arriving a few minutes late, she is expected to work through all breaks and do unpaid overtime which averages an extra half hour on every shift.
At a recent staff meeting the distressed team leader said head office had decided they were overstaffed and needed to lose the equivalent of one of three Registered Nurses. Management by numbers and spreadsheets has arrived at the Nursing Home, which has become a profit centre for its owners. The overworked, underpaid, under-appreciated staff looked at one another in disbelief. Is it little wonder Hannah was too sick to go to work the next day? At other times we can lose sight of the work people are doing.
Profit before people
Andrew holds a senior executive position in a global mining services company. He was employed to manage risk in one sector of the firm’s operation. As the firm grew Andrew was promoted into his manager’s position, with responsibility for risk across a region and remunerated accordingly. In addition to increased workload and travel he was asked to continue his previous role until a replacement was found. Budget cuts however meant no new staff and Andrew had to increase the workload on himself and his limited staff in order to fulfill two key roles, and slowly shifted his focus to the more urgent and demanding.
Six months later Andrew’s role was expanded to head of risk for the firm across all their regional operations. Empty promises of backfilling previous roles meant he found himself doing three jobs, with a punishing travel schedule, a Herculean workload, and increasingly fragile health. His staff faced similar pressure, and the focus shifted almost entirely to crisis management and avoidance, with an emphasis on survival and quarterly results. Grown men broke down in tears because of the pressure they were under. Deep thinking, long term strategic planning, doing the important not urgent, became the stuff of textbooks rather than practice.
The firm reduced staff costs considerably, but at huge personal cost to the individuals, and considerable risk to the firm. Paradoxically the people responsible for managing risk were the biggest risk.
How much profit is enough?
At some point the stresses and strains imposed on people like Hannah and Andrew in the blind pursuit of profit will manifest in trauma and tragedy. This will certainly result in loss of reputation, income and profit— the very thing firms try to avoid with shortsighted cost cutting.
You need to look deeply into profit figures, and ask not whether you have achieved maximum profit, but whether this is a reasonable profit in the circumstances. Leaders need to appreciate the impact of their decisions on people — staff, customers, their world, and consequently their profits. Drawing a line through staff costs has a human cost, and if you don’t fully appreciate that then you don’t fully appreciate the impact of your decisions and the fact that you have human persons working for you.
It’s time to ask whether people are being exploited in the pursuit of profit. Where they are it’s time to boycott those firms.
About the Author:
Anthony Howard is an executive mentor and founder of The Confidere Group. He has written and spoken extensively on Human-Centred Leadership and has recently released a book on the topic, Humanise: Why Human-Centred Leadership is the key to the 21st Century (Wiley, $32.95). For more information visit www.humancentredleadership.com or email Anthony.firstname.lastname@example.org