No company is loyal to its employees. People are capable of loyalty, but companies are simply not capable of loyalty.
One of my neighbors a few years back worked at a lumber mill for 30+ years, including some serious downturns in demand for lumber when the owner of the company took little or no pay to make sure he could keep on his employees. The owner of the company? Super loyal.
The owner died, and his daughter, who inherited the company, didn't want to run it, so she sold it to a local investor who took one look at the books and laid off almost all the staff including my neighbor, replacing them with minimum-wage-ish workers. I don't think the daughter intended this to happen, she just didn't have the business knowledge to prevent it.
Luckily my ex-neighbor had less than a year left on his mortgage when this happened, and was able to pay off his house before unemployment ran out, but he wasn't able to find work (probably in part due to ageism). Last I heard (just before the pandemic) his attempt at starting a knife-sharpening business out of his home had failed and he was trying to sell the business, with still a few more years before he could collect social security (and give up full social security benefits by doing so).
> No company is loyal to its employees. People are capable of loyalty, but companies are simply not capable of loyalty.
The smaller the company, the less distinction there is between "the company" and "the people who own it". So it's possible to have something like loyalty/trust with the company if you have loyalty/trust with the people in charge
But there's always a difference, and it can always change in the time it takes to sell, or IPO, or take new investment
> The smaller the company, the less distinction there is between "the company" and "the people who own it". So it's possible to have something like loyalty/trust with the company if you have loyalty/trust with the people in charge
I understand what you're getting at, and this is why I support small businesses both with my money and politically, and when I can, by working for them. If someone has to look you in the eye when they screw you over, they're less likely to screw you over. And on the flipside, this is why I generally despise large corporations. More often than not, "scale" is achieved by creating enough distance between those in charge and those not in charge, and then mercilessly exploiting those not in charge.
But ultimately, the distinction between business and business owner will always be there at any size company, and loyalty, if it exists, will always be a trait of the business owner, not the business.
I would even add a further layer for public companies (vs large private companies): we might think of "those in charge" as management, and large companies certainly put more distance between them and folks on the ground, but public companies also have a big distance between investors and management. Most investors on the open market won't even be involved with the company directly - it'll just be a line in a portfolio, their only signal being buy/sell - and yet ultimately they are the ones "in charge"
Which is why we often get behavior that's not just disloyal or callous, but wildly irrational too
Agreed, the vast majority of shareholders have little or no visibility into a company. And management and shareholder incentives aren't aligned in timescale: while shareholders be in it for the long term, management can be in it for the short term, collecting bonuses on their quarterly performance and leaving when their short-termism comes back to bite the company.
Another problem is that shareholders aren't a cohesive group. If the holders of the top 51% of shares vote as a block, they make 100% of the shareholder decisions but reap only 51% of the results. This greatly decreases the cost of doing things like buying a controlling interest in a competitor and running it into the ground, because you can get the holders of 49% of the shares to subsidize your cost. Shareholder behavior in this situation seems irrational if you look only at their behavior within the company, but it's rational in the larger context of their holdings.
Shareholders can also be in it for the short-term in a public market, sometimes more so than management. That's why you get execs trying to juice the stock instead of setting the company up for success
> No company is loyal to its employees. People are capable of loyalty, but companies are simply not capable of loyalty.
This is a good point. I have had bosses I liked and trusted and I trusted them, but not the "company" as such. If you replaced them, it wouldn't be the same. Maybe I'd be able to trust the new person or maybe I wouldn't, but that's what would matter.
That aside, the company culture and rules can influence whether it's more likely to hire good people or bad ones. There are some companies set up to do regular layoffs and compete strongly enough that people are sabotaging each other and that just seems miserable.
I work for a place now that's a quiet, enjoyable workplace where everyone is trying to help each other do better while getting good compensation. Maybe I could make a bit more somewhere else, but I'm not sure it'd be worth giving up what I have now. Most people who work here have really long tenures (10+ years) and that's a good thing.
Make no mistake, all companies are one leveraged buy-out away from full private equity ruthlessness. Even if the current owners are great – people get older, they'll want to retire... and we all die. Eventually the ownership can pass to someone who really wants to turn the screws.
Do you have good examples of companies loyal to employees? I have been pretty loyal to my employees, but I have had to make hard decisions when the health of the company was higher priority than loyalty to an employee.
In fact, my next article on Maps will talk about the Zagat acquisition. Tim and Nina Zagat were getting on in years, and wanted to protect their employees against getting acquired by some ruthless private equity owners.
So they sold to Google. Oh well. Zagat was eventually spun out again. I don't know what happened to those long-time employees.
I don't see anything wrong with that. Similarly, employees have to make hard decisions when the health of their families is a higher priority than loyalty to the company.
Maybe we should stop using the term "loyalty" because it unfairly implies absolutes -- at least in the minds of westerners.
This is why I am asking. I did not say that I made decisions against employees when it was an inconvenience to the business or to my profit. I made hard decisions when employees jeopardized the company.
In my experience, it's typically the smaller the company the more loyal they are to good employees.
Big companies with plenty of institutional inertia have zero loyalty and would replace their entire workforce with chatgpt of given the opportunity.
I have yet to see a company where the "loyal" employees are paid more than those who leave for a better salary, or are exempt from laid off. I feel like "Company Loyalty" is one of those nonsensical ideas boomers left to the younger generation.
What value besides money? A company paying a employee to be "loyal" is nothing more than a business transaction, and "loyal" really is "please, don't go to another company, we will pay you to stay here". I'm assuming the employee is not also the owner.
I agree. I think what most people seek in a company is the weathering of risk, the establishment of an opportunity, and the reliability of income.
Employers can "demand" loyalty, but as you say, it's basically a request. There's no legal basis for it or anything.
I think it's fine to have a culture of loyalty. It probably means you have a pretty good company. Demanding it doesn't work, and if it's not real loyalty, we don't have to be mad about it being one-sided.
