The deadly sin at the root of the financial crisis

Written by Joe Pisani
Wednesday, 04 May 2011 00:00

While I was waiting for the elevator, I ran into one of the executives at the outplacement firm in our office building — the guy who teaches everyone how to pick themselves up, dust themselves off and start all over again after getting knocked senseless by the system.

This fellow is on the frontlines in the battle for employment and knows about the trials and challenges people face when they lose their jobs, particularly the ones who were with a company a long time and became expendable overnight, regardless of their performance or their position.

“I remember the days when employees were valued,” I said. “They were loyal to the company, and the company was loyal to them. Now, everybody is as disposable as Kleenex.”

“Tell me about it,” he said. “When I get laid off, I’ll come looking for you.”

And he’ll want to start a catering service or a consulting firm or a car wash or any of those small businesses that Baby Boomers begin when they want to set themselves free.

In the new world, no one is safe.

When Paul Volcker, former head of the Federal Reserve, spoke in Stamford recently about the financial crisis caused largely by greed, he said the only real change that has occurred is the bonuses are even bigger now. We didn’t learn any lessons from one of the worst financial meltdowns in modern history.

A few days later, MetLife released its ninth annual survey about the mood of the American workplace, which showed loyalty is at a three-year low.

According to the Annual Study for Employee Benefits Trends, more than a third of workers expect to have a new job within 12 months, and employee loyalty has dropped 12 points to 47 percent. The decrease is attributable to the “Do more with less” philosophy that has consumed companies nationwide. The irony is half the employers surveyed believe their workers have strong loyalty to them.

And contrary to the mantra of management consultants, who say employees value a pat on the back more than money, the survey concluded the most important factor in determining loyalty is cold hard cash.

Things have changed. In the olden days, the order of priorities in business went something like this — the customer was first, the employee was second and the shareholder was third. Now, the employee has slipped off the chart entirely, and once-dedicated workers are looking for jobs as day laborers, parking attendants and landscapers.

What happened to the time when employees were valued and they, in turn, had a fierce loyalty to their companies? Did all those jobs get shipped to China?

Ask yourself: How loyal is China to U.S. companies? A report by the American Chamber of Commerce shows more than half the businesses surveyed say China’s policies are hampering them and benefiting home-grown companies. Globalization has its consequences. You sacrifice jobs, you sacrifice technology and ultimately you sacrifice independence.

And at the root of the problem is the same deadly sin that inspires many social ills, and it isn’t lust. It’s old-fashioned greed.

Joe Pisani can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .