Surviving the Recession With Your Reputation Intact

When we were running Saltmine and Lux, we never liked sending employees out to tech industry functions. There was rarely new business to be found there—the entire purpose is a different kind of commerce, oriented toward expanding personal networks. During the go-go dotcom days, the people who I met at those events were either trying to sell me their services (legal, accounting, investing, etc,) or recruiters trying to convince our attending managers to join competing organizations. I even got recruited myself a few times, until the person I was speaking with found out that I owned the business.

In the latest version of the economy, the networking event persists, but with a different spin. In an environment where people are told that their bonus for 2009 is “You get to keep your job,” and with the sophistication and spread of social media, the nature of networking and employment is changing significantly. I’ve attended a few events recently, and have seen and heard some things that bode ill for employees and employers alike.

At a recent business networking gathering at the W in San Francisco, I met the usual handful of vendors looking for new accounts, but the bulk of the folks I spoke with were looking for new jobs. Most were employed, but once it was established that I wasn’t hiring, the conversation turned to the perceived shortfalls of their current position. I’ve heard a lot of people spend a lot of time complaining about their jobs, but have been recently hearing some new twists.

The idea of ‘being lucky to have a job’ at all has gained traction with some organizations. While it’s generally better to be employed than not employed, the ‘lucky’ notion grown into an excuse and a tool for management and ownership to freeze and drop wages, and for companies to eliminate perks and benefits. In tight economic times, this is understandable and even essential for companies that are intent on surviving.

However, there seems to be callousness and opportunism on the part of some employers that hasn’t been as evident in the past—or at least not to this extent. I’m hearing a lot of stories (remember, this is all anecdotal!) of junior staff or interns put on major projects for major clients, of people required to work longer hours under the cover of non-exempt employee status, or, in a very common tactic, being required to cover positions formerly staffed by several people.  At the same time, wages and increases—even cost of living increases—are being suppressed, with the recession as the excuse. The churn that would normally result from these practices is held in check by the poor hiring environment—for now.

Although beneficial to the bottom line, and perhaps necessary in this economy, this is a short-sighted strategy. As the economy continues to recover, and as companies begin to rehire and revisit expansion plans, a great game of musical chairs will begin in the job market. Some savvy organizations ( like Accenture) recognize this, and have begun to strategically dole out double-digit-percentage salary increases to staff who have been bearing the burden of working a position and a half, or worse. That’s a smart thing to do, as it will go a long way to placate people who have been unhappy about frozen wages and overwork. The process of finding a new position is difficult and unpleasant, and most people would prefer to stay put if they feel that they’re compensated and appreciated. Even a modest gesture in that direction from an employer can do great things for employee retention.

Appreciation and respect are crucial for retaining people in times when cash for compensation is in short supply. Institutionalizing practices that don’t consider the global ramifications of employee retention will cause long-term organizational damage in clear and not so clear ways:  First, the obvious: companies that don’t treat their folks well (particularly while asking these people to make economic or professional concessions to the economy) are running the risk of unwanted employee attrition as the economy recovers.

The more unusual problem results from the easy information flow provided by social media. Policies that seem expedient, and can be explained or rationalized in one on one situations or in closed company meetings, can be viewed as transparent and self-serving in the light of day—and social media has made the light of day broader and more accessible than in any other era of business. Worse, senior management and ownership are often from a pre-internet era, and aren’t aware that tales of business practices can circulate on the internet almost before they’ve adjourned a staff meeting.

In the same way that high school freshmen must now think of their internet activity as a visible part of their permanent record, business owners and managers are operating in a more transparent, permanent, and distributed environment. For unhappy employees, sitting around with a couple of friends at the corner bar, complaining about your job has now gone global. Websites like jobvent.com (and I picked this one at random from among dozens) are publicly airing formerly private information, and at a minimum are a soap box for disgruntled employees.

Right or wrong, this information will go away slowly, if at all. Social media and the lateral motion of data are having a profound effect on the availability and permanence of information. For companies that have been bad actors in the employee relations area (or who have fairly or unfairly gotten a reputation for poor employee practices), the process of rehiring or expanding in good economic times may be hindered.

Of course, employers take a dim view of the public airing of dirty laundry. People have complained in their Facebook profile about their jobs or managers (and been fired for it), and in the same way that a company can leave a record of poor employee practices, an individual can leave a trail of being difficult to work with, a complainer, or worse, with just a few entries on Twitter.

In 2004 or so, I was speaking to a graduating class in Advertising at the University of Washington. When discussing the process of vetting applicants, I mentioned that part of our initial sorting of resumes involved doing a web search for the applicant, and taking a look at their social media sites. It seems hard to believe in 2010, but at the time, the idea that an employer would look at their MySpace pages and photos drew a collective gasp from the 70 or so students in the auditorium. (I enjoyed this, as it was one of the only times I’ve ever heard an actual collective gasp.) I’d like to think that this information was helpful to those folks as they headed out into the market. I’d also like to think that students and job applicants of all sorts are now taking care to monitor their online image and reputation (there was an article in this morning’s New York Times that dealt with teaching grade-school students about the permanence of their online activities).

Although large companies have been aware of this for some time, it’s important for small businesses to be aware of the same thing—that like it or not, their company has both a planned and and unplanned reputation on the internet that needs to be managed.  For people and companies, bad marks are harder than good ones to erase, ignore, or outgrow.

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