Headlines cause headaches for HR
When the headline says 'surging profits' and the policies say 'austerity' it can be tough to breed engagement
May 31, 2011
By Todd Humber
Reading the business section of the daily newspapers feels a bit like being on a rollercoaster. Case in point — the May 31 issue of the Toronto Star where readers were met with the following headlines:
•Global economy too fragile for a rate hike, says Central bank
•Scotiabank’s surging profits beat expectations
Flip open the pages of any newspaper, or surf around the web, and you’ll find the same dichotomy everywhere — many firms have returned to (or even exceeded) pre-recession profit levels, yet austerity remains the word of the day. Despite glowing profit reports from many organizations, boards of directors, investors and the C-suite remain jittery about the short-term future and fears remain about sliding back into recession.
It’s all understandable, and being cautious is being responsible — nobody wants to see another economic meltdown caused by cavalier behaviour. But juxtaposing solid financial results against wage freezes, scaled-back bonuses and continued belt-tightening poses a headache for HR departments and line managers.
If a worker reads in the paper that “surging profits beat expectations,” yet they’re working in a climate of salary freezes and scaling back perks — that’s a tough climate in which to foster engagement and engender loyalty. (Not to suggest for a moment this is what’s actually happening at Scotiabank — they’re just a convenient example since they’re in the headlines.)
In a story posted on Canadian HR Reporter’s “News from the Global Workplace” section, we may find a cautionary tale emerging from Australia.
Australia is benefiting — just like Canada — from the resource boom. But wages aren’t keeping pace, according to trade unions.
The Australia Council of Trade Unions (ACTU) said wages have grown 3.8 per cent over the past year. Profits for Australian firms, on the other hand, were up 9.5 per cent in the March quarter year over year.
Unions are starting to flex their muscles, and the country is facing its worst labour unrest in decades, according to employers.
According to the Reuters story, “disputes (are) hitting airlines, ports and mines as unions use an unprecedented resource boom and labour shortage to fight for a greater share of profits.”
The threat of paralyzing strikes has investors worried and could derail the economy. Nobody wins when workers are off the job.
Cutbacks, wage freezes and eliminating perks may have kept companies afloat during the darkest days of the recession. But how much longer employees are willing to take their austerity medication is a question employers will have to grapple with as the economy slowly turns around.
Otherwise, the rollercoaster ride in the headlines could turn into a free fall.
Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resources management.
Todd Humber is the publisher and editor-in-chief of Canadian HR Reporter, the national journal of human resource management. Follow him on Twitter @ToddHumber