Why businesses should tell us their whole story
Unfortunately, we have lots of wars. In addition to the ones in the Middle East, which our military fights, we have the war on poverty, the war on drugs, the war on women and a host of others.
Although nobody seems to be calling it that, we also have a war on business. It’s often called the “dreaded private sector,” as if it’s something we would be better off without. Profit has become a dirty word earned by the greedy few, and it seems many think a profit can’t possibly be made without doing something immoral or illegal.
If we’re talking about cool companies like Apple and Google, profit seems to be an OK thing, but if we’re talking about an energy company, it’s a whole different matter. Yet the people who hate energy companies use plenty of energy themselves.
Potential presidential candidate Hillary Clinton ignited a firestorm when she said, “Don’t let anybody tell you that, you know, it’s corporations and businesses that create jobs.” Yes, she back-peddled a bit the next day, but if you are a CEO, how comfortable would you feel about the business climate for your company, if she or someone who thinks like this got elected?
Many employees also think poorly of their employers. Admittedly, some of this is certainly deserved, as this new race to the bottom has caused layoffs, pay cuts, benefit cuts and complete culture changes at many companies. Many employees would leave in a New York minute if they could find a job elsewhere.
The big picture
Like it or not, businesses share much of the blame in their lack of popularity. At lunch with my friend Bill Taylor the other day, he astutely pointed out that “not everyone is a stockholder,” and the lion’s share of business communications is directed at shareholders and the investment community.
To be sure, marketing and advertising are directed at customers, but these tend to talk about the product or service, not the company as a whole.
And when we’re talking to investors, profit, ROI, market share, dividends, etc. are all that are discussed, lending credibility to the claims of corporate greed. What most people don’t realize is that profit, even if it’s in the billions of dollars, is a relatively small number in comparison to all the other numbers.
For instance, payroll is often one of the biggest items. Many employees think of their salaries as their take-home pay after the governments and everyone else have taken their chunks. Yet employees cost employers far more than their total salaries. Employers have to provide workmen’s comp, unemployment insurance, social security contributions, etc. Employers often contribute long-term disability insurance, health insurance, etc.
When you add it all up, most employees are far more expensive than they realize and often take their benefits for granted until they disappear. A layoff often provides a stark awakening of all the things we took for granted that suddenly aren’t there anymore.
Businesses should itemize these costs, and it would also make sense to mention how many families are supported through all of this.
Taxes are another giant corporate expense. Instead of just announcing profits, why not announce all the taxes that had to be paid to enable those profits? Yes, there are corporate income taxes, federal, state and sometimes local, but there are property taxes and many others as well.
And while we’re at it, employers have to withhold the taxes of their employees. Why not also share total employee income taxes, which the company (with its employees) are contributing to the treasuries?
The whole idea is to present the big picture to help people keep everything in perspective. If all we talk about is profit, too many people think it’s obscene, but when they see it in relation to everything else, it seems far more reasonable.
Today most companies face global competition in one form or another. It’s really tough to compete effectively unless everyone is doing their very best. Employees who feel they are being taken advantage of aren’t going to try real hard. Customers who feel you’re making too much money are going to be looking for other suppliers. Governments that think you’re making too much money will find a way to get more taxes out of you.
If you want to have a chance at being internationally competitive, you have to sell yourself to a lot more than just your shareholders.
Ronald J. Bourque, a consultant and speaker from Windham, has had engagements throughout the United States, Europe and Asia. He can be reached at 603-898-1871 or RonBourque3@gmail.com.