By Angie De La Cruz–Every three months a group of peer executives in the Houston area gather together in a Business Ethics Forum to develop and implement philosophical and actionable frameworks for ethical and effective business management. Last Friday, September 16th, I had the fortune to attend the forum on behalf of the UST Cameron School of Business and the Business Ethics Society. Having the opportunity to sit among a group of Houston’s top executives as well as UST faculty and leadership was a very valuable experience that helped me get a better grasp of the professional environment in the city.
The subject of discussion was how to hire well, and the case concerned the ongoing rehiring situation in Houston after the massive layoffs taken place in the past years. Among the topics debated was the firm’s “upgrade” opportunity that has resulted from the oversupply of talented people due to the downturn. Many companies see this time as the perfect occasion to selectively replace certain staff members with this new talent available in the market. The ethical dilemma is whether this “upgrade” would be an abuse of a duty of solidarity that the firm owes to their current employees, or failing to do so would be a violation of the firm’s duty with their shareholders.
The common opinion was that companies owe loyalty to their employees before they owe it to the company or the shareholders. Another point made was that firms shouldn’t reach the point where an upgrade is necessary. If there are people in the company that are not being effective and efficient enough and need to be replaced, the firm shouldn’t wait for a downturn to do these changes or “upgrades.” Along the same lines, the next discussion was regarding the fact that now that companies can begin to hire again, should they hire back experienced hands or hire less experienced and less expensive 25-35 years olds? Some argued that this decision should depend on whether the new hiring is done in the production or cost side of the company. Determining what makes sense regarding value relative to cost.
Others, however, stated that it shouldn’t be about costs but instead about respect, dignity, career trajectory, and workforce contribution. Identifying which would be the right place for each person within the firm to contribute. A third group supported that firms should hire both experienced and young people and have every generation covered. This will allow the firm to benefit from each generation by gaining more experience and know-how, while adding new hands with less experience but open to learning and adapting. Neither age discrimination nor hiring out of sympathy should be factors in this decision.
Finally, the last topic was about the duty that companies owe to the employees retained through the downturn for whom compensation was reduced. Should companies increase their compensation to match that of the new hires? The common view was that this depends on each firm’s situation but that transparency should always go along with any decision made within a company. Regardless of whether compensation is increased and matched or not, companies should always communicate and explain why decisions of raises and new hires are made. The conclusion of the forum was that people make the best profit for a firm and treating people with respect will bring profit to the company at the end. In fact, firms should stop referring to them as resources or workforce and call them for what they are: people with dignity and value. Although making profit is the shareholder’s main interest, financial stability should be balanced with employee value at all times.
I find it very inspiring that there is a group of Houston professionals like this that take the time to reflect, discuss, and exchange ideas around business ethics topics. In my opinion, these are the type of initiatives that contribute and make positive changes in our society. I look forward to their next encounter that will be held in December at UST.
UST – Cameron School of Business – MBA Candidate – Marketing Candidate