Employer Uncertainty? Give Me A Break

[Flatulo]

26. The big problem is poor global demand. I guess you could label that 'uncertainty.'

Revenue per employee is currently very high, as are profits. 'Lean' is the new corporate religion. Fewer people are needed to meet existing demand.

With profits high even though demand is low, hiring will stagnate. Companies have no obligation to hire people out of a sense of social responsibility, and you would not invest your money in an enterprise that was going to fail by being unprofitable. Hiring will only resume when there is a good business case to do so, i.e.; stronger demand.

Of course, a lot of this is piss poor long-term strategy on the part of employers. It's poor practice to burn out employees through overwork. It's also poor thinking to continue to outsource and downsize when the long-term effect will be to reduce your customer base by eliminating people with disposable income. But each company thinks that it's someone else's problem, and they can only see the impact on this quarter's bottom line.

One solution that has been suggested that makes a lot of sense to me is to restructure preferred stock plans so that corporate officers' compensation is tied to long-term performance, not quarter to quarter results. For example, restricted stock could be vested over a 10 year period instead of vesting in six months to one year. Since this is where the vast majority of executive compensation comes from, it would encourage long-term planning over short-term results. It would encourage employee retention, since longer-term projects would be undertaken without fear of no immediate return.