“Company loyalty will make you poor.” Really?

This recent job advice on social media caught my eye, as it was posted almost to the day of my 20th work anniversary at my current employer.  That coincidence set me thinking about the nature of employment in the modern age.  And from that perspective, hitting two decades stands out. I’m posting this on LinkedIn, which is a website designed mostly around getting a new job, not keeping your old one. And I work in financial services, where the poster’s advice of jumping from lilly-pad to lilly-pad is assumed by many to be the way to fame and fortune. And we are at the high point of the gig economy, where short-term, non-employee engagements have become the norm. And there is the post-Covid Great Resignation of scores of people who just don’t want to stick it out any longer. And “quiet quitting” is now all the rage.

And here I am marking another year—a big one—wondering whether, if I look in the mirror, I will see a pocket protector on my white shirt, my horn-rimmed glasses, and my IBM badge clipped to my belt. The 1960s called and they want their career back….

Even in today’s dating rather than marrying job market, there are reasons to stick around.  Good pay might be one, but it’s obvious in our current economy—with uber low unemployment and signs of significant wage inflation in many industries—that many workers can make at least somewhat more by going across the street or, virtually, across the country.

Still, it’s getting to the point where why people stay may be more interesting than why people jump around. Family matters are always important considerations. Job satisfaction is another important factor. Personal relationships with colleagues are a powerful motivation. Loyalty may be a fourth, but that’s tricky. Modern corporations—especially large ones—are impersonal, even if we attribute human characteristics to them. As a younger person, I did a lot of high-country hiking.  Struggling my way up to the ridgelines and the peaks beyond, I comforted myself thinking about the personal relationship between me and that big rock.  That was nonsense. The mountain didn’t care whether or not I made it to the top. It was not there to assist or defeat; it was just there. (The Adirondacks are an exception. They actively want to defeat you, to break you. The Adz are the meanest, nastiest mountains I know.)

As far back as 1932, Adolph Berle & Gardiner Means identified the challenges associated with the large new corporate entities that had emerged in the late 19th and early 20th centuries. Prior to the Industrial Revolution, most enterprises were small, family-owned and family-managed. Personal relationships, by definition, mattered. Loyalty and trust were genuine considerations. Big business changed all that. Within just a few generations, the dominant businesses of the day had thousands of employees, multiple divisions, elaborate org charts, HR departments, and not much of yesteryear’s mutual obligation.

Whether or not you feel loyalty to your big-business employer, your big-business employer does not necessarily view you that way. It can’t. It’s an inanimate object. It’s a legal construct. (Though large, my employer is still family-owned and family-managed, so there is greater opportunity for bilateral consideration. That definitely contributes to worker longevity at the company, even if the vast majority of employees are not part of the family. Twenty years there barely merits notice. Thirty- and forty-year anniversaries are not unusual.)

There is another reason—more internal than external—to stick around. And it is largely the same reason I kept to the trail and clambered to the top of the mountain: I wanted to finish what I started. I was committed to seeing something through. I had earlier switched careers—the bottom fell out of my prior profession in the 1990s—and I had a very difficult 5-year career transition, with several short-term engagements. Having landed at my current employer in 2002, I was determined to make a go of it.

Commitment isn’t much of a virtue in our current age. In my industry, private equity is a perfect example of this short-termism. It’s an in-and-out business, raise the capital, leverage it, buy a business, strip it, and sell the remains to someone else in time to return the client’s money in five years. And then move on to the next one. It’s a description of our times. Building something durable is further in the background.  That short termism is similarly reflected in the resumes that regularly cross my desk. They are notable for having a string of two-year engagements.  Each presumably comes with a promotion and higher compensation….

It’s worth stopping for a moment and celebrating the mobility that the US workforce now enjoys, especially compared to prior generations who may have had no way out of milltowns and mines. Many of our ancestors were too often the modern equivalent of indentured servants. In no way am I trying to diminish that newfound employee mobility. Workers in go-nowhere or exploitative positions should take advantage of this mobility. And in many instances, a flexible, remote, free-lance, gig approach is superior to a full-time employment arrangement.

But is there a point where the nearly limitless mobility that characterizes today’s workplace culture loses marginal utility for the employees themselves, and actually becomes a detractor to careers and productivity? Are we at that turning point? I think so. I’m forecasting a change in the overall economic and business paradigm that made this job hopping a viable career strategy. The United States has now had more than three decades of neo-liberal globalism which has favored outsourcing, off-shoring, just-in-time supply chains, and margin improvement above all else. Encouraged by the capital markets, corporate America has privileged short-term efficiency over long-term efficacy.  Over the past two years, the cycle has come to an end. The geo-political landscape has changed dramatically and the financial tail wind of declining rates has also petered out. Corporate America is due for an investment “reset” that will amount to many hundreds of billions of dollars.

I have in mind incremental spending in technology and capital and real assets, but there is also room to spend more on labor, for creating an environment where more employees wish to climb the mountain they are on rather than hop over the valley to the next one. From the perspective of the employee, lilly-pad jumping may become more difficult with rates rising and start-up unicorns becoming rarer. The looming recession might also make current positions look more attractive, and lead to fewer offers to cross the street for a 10% pay increase.

While it may be naïve to try to nudge the pendulum back in the direction of greater mutual commitment between capital and labor, it’s worth a try.  Comments welcome.