Category Archives: Profitability

Why Certain Jobs Are Not Designed to Pay a “Living Wage”

Executive Secretary

When I was an executive secretary, I thought I could stay in that job, if only people were willing to pay more.  I was an excellent secretary.  Only now, many years later, and with far more experience under my belt, do I realize why that job will never pay a living wage.

Fast food workers find themselves in a similar situation.  They think they could stay permanently in their jobs and make a living, if only the owners would pay them a living wage.

Unfortunately, many workers, if not most, are mistaken about why different jobs pay what they do.  All of these jobs are minimal service jobs, which do not give ADDED VALUE to the business.  In fact, most employees at most levels of business have it backward.  Jobs are NOT designed around employees’ needs, or what they need to live on.

Salaries and wages are designed for what value they provide to the business, and are driven upward and downward from that level by the shortage of workers, or oversupply of workers. It’s not about “the business owner sharing his profits.” it’s about what value the employees are providing to the business.  Yet, there is a maximal level of value that each worker provides.  Pushed above that level, either by a labor shortage, or by labor demands that don’t provide added value, technological innovation will replace those jobs.

The average employee, at every level, is thinking in the wrong way, if he wants to get ahead in life.  He is only trading his labor for a wage.  For that wage, he is expected to perform certain tasks competently and to achieve certain goals, or meet certain minimal targets. Doing one’s job competently is not enough to earn any more than a cost-of-living increase in wagenow.  It doesn’t get anyone ahead.  Like many others, I did not realize this when I was young.

To get promoted, or to be raised into a higher salary classification, one must become indispensable to one’s employer.  One must render service over and above what is required of them to earn their normal salary.  Those with this sort of mental attitude are able to raise their incomes.  For anyone who watches Suits, think of Donna; think of Mike; think of Harvey Specter.

Donna  Mike Ross on Suits  Harvey Specter on Suits

Most employees are not willing to assume the extra risk and responsibilities a higher salary entails.  Instead, they want to get a higher salary for performing ordinary tasks, without regard to the result in terms of profitability.  Employers pay ordinary salaries for competence; they pay extraordinary salaries for new visions combined with implementation.  And if they don’t, or can’t, this is when the entrepreneur with vision and drive strikes out on his own, where all the profits and all the risk accrue to him.  This is why those who are highly successful are rewarded with reaping the profits and becoming rich.

For those without great vision, the next best avenue is sales.  Sales pays well for those who add actual value to the company; it quickly separates the wheat from the chaff.  Those who perform the right tasks with the right people are able to give themselves an immediate raise through commissions earned.  Those who go through the motions of tasks without the right vision don’t get very far.  Often, they do have the ability, but are not willing to invest the same time, take the same risks, or invest the same effort, because succeeding in sales is not truly their dream.

–Lynne Diligent

 

Business Practices – A Reflection of Society

Business woman on telephone Successful Salesman

Business is conducted quite differently in North Africa and Europe from how it is done in America, mostly because people’s cultural ideas and frames of reference are entirely different from what we find back home.  The problems we face in business, whatever our culture, stem from similar issues, however.

How can we make a living in the current business environment?  Where should the ethical line be drawn with regard to meeting management’s objectives, and in competing with colleagues?  What happens when employees’ personal goals conflict with the organization?  What about employees who are only pretending to think about the success or profitability of the business, when they are really thinking about how to enjoy lifestyle advantages, or about what the business owes them?  How can we hire the right employees, and motivate them to want to achieve excellence on their own?  These, and many more issues, are universal concerns.  Yet, different cultures answer them in different ways.

Business is a microcosm of the society in which it exists.  Born in the United States, and having spent the first 35 years of my life living and working there, I moved to North Africa with my foreign husband at the age of 37.   That was 23 years ago.

In different stages of our lives, we become excited by new things.  Several years ago, I started a small business and have become more and more interested learning more about all facets of business.  I hope to share my insights, and further adventures in business learning with my readers.

–Lynne Diligent