Where do jobs come from and how much are they worth? What is expected from an individual who is paid to do a job for an employer? What are the costs associated with providing a job? At what point is it not worth the effort to provide a job?
These are important questions that employers are asking themselves every day. Unemployment is high, there are a lot of quality people out of work because their companies failed or their companies had to reduce headcount to stay competitive. Many of the unemployed have been out of work for a long time and they are not close to returning to work. Many were making a lot of money in a field that they may not be able to get back into. The more competitive of the unemployed have returned to work, or they are in the jobs that were not lost; some of them have filled the very few new jobs that were created. Those who were less competitive are still looking and hoping. Some of the unemployed have found jobs in new fields and are making less than they used to make. It’s a realization that many people who lose their jobs have to face. The old job is gone and there will not be a comparable job in the near future. Tough choices will have to be made. Risks have to be taken.
Some jobs pay a lot of money and some jobs pay less. How does an employer determine what they will pay? One of the first determinants of a pay scale is what the company is paying already. If the job is one that already exists then the pay scale and benefits are already in place. New positions that are created have to fit within the company’s pay scale for a similar job or within the local area and fit in with what other employers are paying for that type of position.
If you hire someone for Job A and the going rate in your area is $20, 000 a year for Job A, you would be foolish to pay $25,000 per year. The employer gets nothing for the extra $5000 a year in pay for that position. The employee gets more money, but puts themselves at risk in doing so. Their job is not worth the money they’re getting and at some point someone will look at that position and that salary as expendable. An owner or stockholders expects profits. Expenses, such as salaries, are expenses. Managers are required to show value for their expenses. It is never wise to inflate salaries for no apparent reason.
Expenses and costs also factor into jobs. What will a new employees cost? The company has to pay a lot more than the salary alone. The amount of Social Security that is withheld from each employee is matched by the company and paid to the federal government. The benefits that each employee is paid is a major expense for an employee. Another factor is the unknown. The economy is struggling, and the new health care requirements are not fully known yet. State and Local governments are also struggling so they will have new requirements for individuals and employers. Companies will have to think hard before accepting any new responsibilities. Hiring to fill the holes created by attrition is not a sure thing any more.
Another factor affecting jobs is technology. New computers and new equipment are allowing many of us to be more efficient and get more things done. I used to work in a manufacturing environment. It used to take 12 people to make 18,000 units a day. Over time and with new equipment those numbers changed to 6 people to make 20,000 units a day, and eventually 3 people to make 36,000 units per day. We are in the information age so now we have more tools available at our finger tips and companies don’t need as many people accomplish what needs get done.
How many buggy whips have been manufactured in the last 20 years? A hundred and twenty five years ago thousands were made and hundreds were employed to make them. No buggy whips, no jobs. Times change and we have to change with them. With computers and the internet we can have a video conference with people from all over the world. We used to send people on business trips and they did many of these things face to face. Now they use computers and software to cover more ground and reduce expenses.
How many airlines, restaurants, hotels, and other industries are feeling the pinch because business travel is reduced. These are some more of the jobs that have been lost.
New jobs are being created and people with experience in other fields are filling the new jobs. Unemployed have to be willing to start over and accept new challenges in areas that they are not comfortable in. We all hate change, but as time passes we have to accept more and more change. We also have to be willing to start at lower levels of a new organization and accept less then we are used to and work our way back up.
Hard choices and self confidence are some of the qualities the successful unemployed will have to rely on to get back on track. Accepting an indefinite benefit from the government that will put the economy in more jeopardy will not solve the individuals long term needs.