Ah, yes. I think this is a valid point, on the other hand I also believe this line of reasoning is based on the norms and practices of a less globalized, less mechanized world. As globalization (and more specifically a continued lifting of the H1B1 restrictions ) continue, combined with the continued increase in domestic college graduates, there could conceivably be changes in the supply and demand curves that do not follow these traditional patterns - or something like that. Basically, if there continues to be a increasing supply of educated labor and a lower, or unsteady demand for this labor then knowledge workers become less of a rare commodity and more expendable and interchangeable.
The problem I see with this, as I have been saying, is that the labor market is then inefficient, and corporations are disproportionally benefitting from this inefficiency the slack of which is being taken from the tax base, at least to a certain extent.
Conceptually I’m thinking of strip-mining, but applied to the labor market - if that makes any sense. And please don’t construe this as a value judgement on the companies involved - it’s just that strip mining is the only thing I can come up with at the moment.
In current times, regardless of your technical background, you have to adaptable. Companies are forced to change or they go out of business or get acquired and absorbed. The world changes to quickly, to continue to rely on what you have historically done well. The same thing goes for employees. Netflix today is hardly anything like it was a decade ago. They re-invented themselves before they became obsolete.
My company (a Fortune 25 company) is 5 times as large as it was when I joined almost 20 years ago, and the source of profits and cash flows is dramatically different than when I joined. We are not a tech company, we are an industrial company that makes really boring things. But we have evolved and continue to innovate and grow.
The employees we seek to retain are first those that are philosophically aligned with our corporate culture, and second in the role that will permit them to create the greatest value they can. If you don’t fit the first criteria, it would be extremely difficult for you get hired, or if it is determined that you are not a cultural fit, then you probably won’t be here long. If you aren’t in the right role, we seek to find the best role for you, if that continues to prove difficult, then you will probably be separated.
I would say that our people and their commitment to the company is what has permitted to us to grow the 5x since I joined.
Netflix annual turnover rate is estimated to be 20%, while the national average is approx. 15%. While it appears that Netflix is higher than the average, I would hardly compare it to strip mining.
Have you listened to the podcast? The whole philosophy of Netflix is explicitly, in no uncertain terms, to recharacterize the the relationship of employees to the company - even to the extent of changing the language of employment.
We could have a discussion about the implementation, or how much of a change this has been in measurable terms - but that’s going in a little different direction.
I think you are missing the pint with strip mining. It is a purely theoretical abstraction starting with idea of disposable white collar workers and comparing this treatment to the treatment of a commodity resource and taking this idea to its logical conclusion. This analogy is imperfect and is contradictory to the idea of an overly abundant supply of workers - but the point is that there are externalities to consider. I will take the blame for the misunderstanding, and probably strip mining is too loaded a term to use in this situation.
In real simple terms, if the demands of the market require treating white collar workers like blue collar workers this is problematic because of the amount of resources (education etc.) that go into creating the average white collar worker, far more than go into creating the average blue collar worker. In the extreme one would wonder if so much education is needed for so many people if the returns are just not there. This is all hypothetical extrapolation of course.
I am surprised at the surprise that the employee / employer relationship exists this way. A job elimination, a RIF, restructuring, reorganization - all of these are about making moves including employee moves to align the employees with the company goals.
If it’s a net negative value proposition to retain someone, what difference does their past performance make in the potential future value? I’ve only ever been as good as my next deliverable.
After listening to the podcast it seems like the characterization is inaccurate. They summarized the message in the beginning - the value a person provides is connected to their outputs, not their inputs. I found nothing objectionable about the podcast and have given similar messages to my teams.
I care about the output - how hard you try isn’t relevant. The tradeoff is people have wide latitude on how the operate.
As much as I try, as much as I practice, I do not have the talent to be in the NBA. However much I practice it isn’t going to matter. This is how we would expect it to be
I think the returns and the demand are there, otherwise there wouldn’t be such a high demand for independent contractors in roles such as business analysts, project managers and other highly technical and skilled positions. Not to mention the hundreds of thousands of people who work in consulting firms like Accenture, Booz Allen or Cognizant.
There’s plenty of high-level white collar work that needs to be done. But I think the nature of that work tends to be more transitory. Honestly, as a management consultant, I see the work the permanent people do at my clients and it terrifies me. Because they are so used to filling out the same TPS reports for 20 years that once that process goes away (which it probably will, as that’s a large part of the reason I’m there) I don’t know what those people will do for a living.
Yeah, this is my issue with it. The cost to educate and retrain most professionals is pretty high and needs to come down before we can reasonably do this. Companies no longer want to bear the expense of keeping their people trained, and so far government isn’t competent to do it (see government retraining for laid off workers). I kind of agree that we should all invest in our own careers and pay to retrain ourselves, but before most people can do that the cost needs to come down. For the last decade or more, my employers have refused to pay $1500/class for the specialized IT training I needed to stay current with technology - so how am I expected to carry that expense (especially with the speed of technology change)? That by itself isn’t so bad, but if you also consider that most white collar professionals have families so are trying to save for retirement, save for their kid’s college, and now also one or two training classes per year that it takes to keep up with technology, it becomes untenable.
If we are all to truly become a mercenary workforce, we need to be able to compete in a global economy, our costs to stay competitive also need to come down.
My guess is that in the next 25 years we will see a major restructuring of the education system and also something like basic minimum income will come into effect.
Mark your calendar for the September 24, 2040 thread titled, "I told you so. . . "
:: Mr. Nylock eagerly awaits snarky reply to last sentence::
It’s an interesting podcast; I think what is alarming for many is the pure commoditization of the white collar workforce and the extent to which Netflix is trying to change the language of employment. I think this is a change in a matter of degree, not a fundamental change.
You say you do not have the ability to be in the NBA. That does not really concern you given the other opportunities available in the market. However, what if all jobs required a level of talent that you cannot achieve? What if the employment landscape changes to the point that only 1 in 4 people are employable and the other 75% do not have the capability no matter how much effort they put in? As the labor market gets more and more competitive this is what the result would be.
Here is a link to the slide presentation discussed in the episode that Netflix uses to introduce their culture. The few slides discussed in the episode are present, but the whole presentation is 124 slides.
After reading through it, I still can’t find anything disagreeable. And it’s not like the overall message is different than what has been practiced before, Jack Welch had similar approaches to managing out poor performers to great success. This is what the Netflix slide presentation says about Loyalty from slide 33:
The slideshow would be inspirational for me - sounds like a great place to work.
There may be some truth to that - Omar Little pointed out that the turnover at Netflix is not significantly higher than average. There may be a substantial gap between theory and practice.
It doesn’t sound inspirational to me, I am really a very unapologetically “lazy” person in regards to work. I want a workplace to be efficient for me, not the other way around.
It sounds like a bad deal, a place like Netflix. If they want top performers,what that means to me is they want people to devote a very large amount of time and energy to their company. I want to put as little resources into my paycheck as possible for the maximum pay - I think this is a quality all workers should have. I don’t think Netflix would provide it; perhaps they pay well from outside appearances, but if you quantify the value I put on my time I spend with family friends and on hobbies it would be grossly inefficient for my purposes.
I think me and Netflix are of the same mindset really; I am totally on board with viewing an employment situation as a an investment and return on investment period.
Has anyone ever called Netflix to ask questions or complain? Their customer service people seem to be very very average. Not great. Not horrible, Very average.
Very Average:eek: They’re all getting fired, er ah separated - no that doesn’t sound right either - I mean their ass no longer be with the company tomorrow:)
In fact, many nations have employment regulations that would make this practice risky or downright illegal.
It is interesting, as some of the countries I’d have listed as regulating against this but being less extreme than Japan is the Nordics. Which tend to dominate on quality of life.
As for the general concept, it seems to be reliant on an environment where the type and level of skills they need is oversupplied. If you need the kind of top-notch skills that can pick and choose among jobs, I don’t expect Netflix to stand any chance against the competition. Anyone who is thinking about a kid, a mortgage, or some long-term healthcare is going to select them away.
