A Tale of Two Businesses

 It was a thriving business, it was a sinking business. It was a wise idea, it was a foolish idea. It was a time of profit, it was a time of loss. It was the season of growth, it was the season of closure. 

The story is true, or at least almost true. The names have been changed to protect the innocent and the not as innocent.

As we all know, both London and Paris lived to flourish, but I'm not as sure about the two businesses although time is yet to tell. You see, these were two business in the same industry and in the same geography. They competed with each other. One's market share drew from the others. When one offered a better product or service than the other, it thrived and the other suffered. When one treated its employees better, their customers were also treated better while the one with a less welcoming environment lost customers because they were treated poorly.

This nearly true story is a tale of two businesses.

You see, both of these businesses were dealing with the effects of COVID. Both were dealing with the so-called Great Resignation -- a term that I despise just as an aside, but in these days of short catchy names and the 24-hour news cycle, great is a word that goes with lots of things. And, each of the two were viewed as sector leaders in their common geography, but each was struggling to have enough employees to produce what was needed to serve their customers.

The leadership team at one of the organization -- let's call them Paris because for them it turned out to be the worst of times -- had some not so innovative ideas. Their strategy was focused on cash and on instant gratification -- something that a leaked internal email said would satisfy the younger generation. So, Paris through cash into the marketplace. Come work for us. Paris is great. If you come work for Paris, we'll give you a big signing bonus. And, what we're not going to tell you or anyone else except when the law forces us to is that we are going to pay for those signing bonuses by reducing other parts of the rewards package. We'll tweak your health benefits in ways that you hopefully won't notice. We'll eliminate your pension because we know you don't care about pensions. We'll reconfigure the matching contribution we give your retirement amount because a match is a match. And, in doing all this, we'll get great new employees and dominate our market.

Not so fast Paris. What is it they say about loose lips. We're in 2022. Nothing is a secret. Paris forgot that experienced employees would find out about this. They asked where their bonuses were, but were told there was no money left. They asked why their health benefits and their pensions were cut. That was to pay for all these expensive signing bonuses. 

So, the experienced workers did what any smart yet underappreciated Parisian would do; they left for London.

London's leadership also had a strategy. Their strategy was to provide a great working environment and to spend money uniformly on their employees both old and new. They kept their generous health benefits. They kept their pension. They benchmarked and looked for tactical opportunities to be above the median where their employees would appreciate it. 

What London has noticed is that their business is thriving. Their turnover is extremely low for their industry and surveys that an external vendor does of their customer base show them that London is best in class. At the same time, Paris seems to be burning.

Instant gratification is what it is. You can get people in the door with it, but at this point, neither London nor Paris would tell you that you can keep them that way.