Recently a long-time business consultant and accountant declared to me, “Labor is a commodity.” He went on to explain that workers are interchangeable, and on top of that, the worst drag on the bottom line. The chief problem with this particular commodity is that it needs food, shelter and health care. I asked him if his excellent receptionist was easily replaceable; after all, no doubt she plays many additional roles than mere greeting and scheduling, and after many years she has his trust. He thought for a moment but stuck to his guns, “I could train someone else up.” Thinking otherwise is an “entitlement mentality.”
This conversation got me thinking. I learned something new from this seasoned professional: I did not realize this belief was still around.
Of course the bottom line must work for any business to survive. There are some industries probably where unskilled labor is mostly interchangeable. However, to driven entrepreneurs the purpose of a business enterprise extends well beyond a balance sheet. Most small business owners have a love and purpose for what business they chose. In high performance enterprises, leaders and workers are partners united toward a common purpose. From the perception of customers, experienced employees are the face of a business. Empowered and fulfilled employees often innovate solutions to expand and improve a small businesses.
If a business owner believes his or her employees are mere commodities, I have to believe those employees sense that and respond accordingly to that leadership style. If a business owner agrees with my colleague that employees are simply interchangeable burdens, he or she might be ready to sell the business and move on to a hobby or new enterprise they might enjoy. If ideas for improving organizational performance are fixated on suppressing wages, it may be time to hire an advisor to rediscover a purpose, or hand the leadership reins to a new partner.
Employees are no more interchangeable commodities than management and leadership are. Businesses are not mere economic machines but human endeavors either driven by purpose or stalled by lack of purpose.