This week I read an interesting if poorly-written article in the Wall Street Journal regarding workplaces providing alcohol for onsite social hours. The comments section was littered with squares wringing their hands at how unprofessional and dangerous a practice this was, but I was most struck by one Alan Maxwell:
“I keep reading unemployment is high, especially amongst less experienced/college grads. But, then I see the weekly articles on this site on “cutting edge” practices to attract workers, especially millenials (recent college grads). Which is to be believed?”
The answer is both, and frankly the fellow’s comment may be glib rhetoric but it’s lousy economics. The fact is that people can be desperately looking for jobs at the same time employers are desperately trying to hire. It’s not enough to say “there are X jobs open and Y people applying.” It needs to be understood who wants to work these jobs, who the employers want to fill them, and what the two sides are willing to give each other to make the deal work.
I’m not an economist by trade, but I know enough to understand that in a diversified white-collar economy, neither workers nor jobs are fungible commodities – some are better than others, and that reality produces bargaining asymmetries. In short, employees want to work at the best jobs (defined by pay, benefits, psychic reward, or potential for advancement) while employers want the best workers (be it the most productive, least demanding, most trustworthy, or best cultural fit).
The real mind-blower here is that those asymmetries can go in both directions simultaneously.
(Vocabulary note: A good is “fungible” if one unit of the good functions the same as another unit and they can be mutually exchanged with no loss of utility. Gasoline and stock shares are frequent examples – it doesn’t matter which gallon or lot I have, it’s all the same as long as I have the same amount.)
The thing is, if you look like the rest of the field (where “look like” is to say have a resume and background typical of your demographic), you’re in the “presenter” role, and you have to try to get employers’ attention. You avoid mistakes that bounce people out of interviews, and hope that someone in the process liked you enough to give you the job above a bunch of other cookie-cutter candidates, because when they have more suitors than spots, they start making decisions on ever more petty criteria.
However, if you have some trait that makes you desireable for a particular niche (you have a special skill or educational experience, or maybe your family name is politically advantageous), you will be more of a selector, and employers will fight over you. Those who need someone to do, say, international tax law, or arcane circuit design, or precision welding, or to close deals that couldn’t otherwise be closed, will find themselves adapting to the applicants more than the other way around, lest they be caught entirely without someone to do essential work for their business.
I didn’t understand this when I was young and job-hunting – it was easy to think that we were all chasing the same internships and jobs and that they just had to pick those of us they liked. There was some truth to it, because most of us had next to no experience and no durable reason for them to choose us. But when I got older and started to see how real recruiters at top-flight companies were approaching the talent chase, I observed that it was an all-out war. These were not “HR ditzes,” but serious salepeople whose product was their own company and whose “leads” were future coworkers. Intense and sometimes bitter rivalries flared amongst competitors, all chasing that small patch of bumper-crop workers who could take their firms to the next level.
We saw jobs as scarce resources and did whatever it took to stand out; meanwhile, those companies themselves saw top candidates as scarce resources and did whatever it took to stand out.
The same reciprocal scarcity exists, incidentally, in college applications and recruiting. Achievement-oriented kids stuff the top colleges’ mailboxes to the tune of ten times the number of enrollees they can allow. Meanwhile the top schools viciously compete to land the best crop of top students in each incoming class. Administrators are deathly afraid of losing students to other schools because they didn’t get enough financial aid or they perceive the campus to be unfriendly to a demographic or academic interest they fancy.
Standing out is one of the key factors that’s driving this proliferation of office-comfort perks and alternative benefits at startups and small firms, including meals, free booze, massages and medical services, daycare, laundry, even financing subsidies – the payoff of those top employees is so critical to the business that they need this stuff to get them in the door and make them want to stay. The movement that has moved into the political realm as well: companies are scared to death of being perceived as unwelcoming to women or minorities or some other demographic and go to great lengths to tout and even sponsor their commitment to various flavors of openness. This is not just motivated by the typically-left-of-center politics that adorn today’s educated entrepreneurial class; it’s also a marketing strategy for recruiting, and it’s not just about recruiting those demographics. It’s about recruiting and retaining people who would say “I don’t want to work at a company where XXX aren’t welcome” or even “I don’t want to work here if I have to explain this blight to my friends.”
As for the employment lawyers wagging their fingers/salivating at the prospect of things going wrong on company premises, employers need to be responsible in bringing in employees who aren’t going to make fools of themselves. If you are hiring people of at least passable character, and you are giving them a working environment they really enjoy and can thrive in, and you set some expectations up front, you can expect that most of them won’t abuse the privilege – any more than one of them might go on a bender once they get home from work. And what you get in exchange for that is a deep level of trust and commitment on the employees’ part. It’s not just that they’ll stay at work because you’re buying them a beer, it’s that they actually want to have a drink with their colleagues, and this probably pays off in passion and creativity.
If on the other hand you are hiring the creatures of interminable excess that made Wall Street and Barbarians At The Gate resonant cultural texts, and you rationalize it by saying “we have to tolerate their workplace asshole behavior to make the numbers this quarter,” your in-office drinking parties might get out of hand, because those are the personalities you have selected for.
The fact that the startups and firms doing this tend to be small is a key factor in keeping the liability risk under control, as they can keep a pretty close eye on both individual behavior and office culture, crafting collective expectations out of the team’s natural camaraderie. This is impossible to do at a corporate level, where employers invariably start seeing workers as autonomous drones who need to be shamed and forbidden from activities that might escape the rigid controls that are the only option of the macro-manager.
As can be gleaned from the comments on the WSJ article, it’s been a big shock to baby-boomer types who grew up in the corporate economies of the 70’s and 80’s, with highly structured work weeks, constrained benefits, cafeteria lunches and strict distinctions between management and the people doing the actual company work (a white-collar, right-to-work version of the union factory). It’s curious, then, to consider how these new office structures are becoming the new company towns.
Regular readers will be chomping at the bit at this point to analogize this situation to the sexual marketplace and mating practices. Fear not – the interpersonal analysis will be discussed in the next post.