To be honest, I hate unions. Perhaps it is different in the US, but over here, they have a really bad rep. This is not the 1800s anymore. Worklife is heavily regulated through laws and the kind of exploitation that gave union's their raison d'être is long gone.
Today, unions are not really about "bargaining power" anymore as much as they are about straight up blackmail.
I don't know labour laws in the UK that well, but here in Canada, unions are very much needed.
I get that in my company (software engineering) it is different as opposed to in low-schooled jobs like workers in a factory off course.
But if my employees come to me to work out a better deal for them and I don't treat them right - they just leave and go work someplace else and then I lose.
The job market itself takes care of it.
But even in that low-schooled worker job at the factory.... working conditions are heavily regulated. Shifts can only be so many hours. Minimum wage is quite high. There's a minimum of 20 days paid leave. There's paid sick leave. There's paid paternal / maternal leave. There's a compulsary "13th month" to be paid at the end of the year. Working floor conditions are also heavily regulated: forced breaks every x hours, mandatory lunch break of 40 minutes, minimum tempurature in the work place (heating, air conditioning, etc), health conditions with regular unannounced inspection and hefty fines for irregularities or transgressions, etc etc etc etc.
And all those laws are in place to curtail the abuses that happened without them.
Whenever I hear about unions organizing a strike somewhere in the country, I read up on what they think the problem is and what the demands are.
And every time I think it's disgusting on the part of the union.
Why would it be "disgusting" for one side to negotiate a better deal? Didn't you say that it's all just about both sides trying to maximize their own profit?
How would he have such power?
Generally, rent and mortgages have to be paid with money. For most people, their source of money is employment income.
Compassion doesn't create value nor does it grow a business.
That sounds harsh, but it is what it is.
I have a different take: every business benefits from all sorts of market distortions in their favour. Business and professional licensing laws limit the number of competitors by creating a barrier to entry; zoning rules limit the number of similar businesses that can be in an area, etc.
I'm not sure if this is a thing in the UK, but it's very common in North America that for a business to get planning approval for a new shop, they have to prepare a market study showing that the area can support the new business without unduly affecting existing businesses.
All of these hurdles that have limited your competition have created scarcity that allows you to charge higher prices - and gain more profit - than you could have in a truly free market. I think it's entirely reasonable for society to expect something from you in return... i.e. operating your business with regard to the welfare of society, not just profit alone.
So?
If I would have ran the business like that from the start, they never would have even had that job in the first place.
And that would have been a valid approach.
My parents had a small business (also software, as it happens). They never hired on other staff because they knew that things came in waves.
When things got very busy, they'd subcontract out some business to a friend who had his own custom software company.
But that's also how it goes... you start a business and then you need someone for job X. Later on you take on a new project and need people for Y and Z.
And so it grows. And after a while, you learn that department X and Y could actually merge because you ended up having multiple do the same thing... or you purchase a software that automates a few things or can do multiple things at ones or whatever and you restructure to accomodate for that new workflow.
Very rarely are such things planned beforehand. I don't know of anybody who hired a bunch of people with some intentional masterplan to then restructure and fire half of them again. If they know beforehand that that is how it's going to end up, that's how they'ld do it from the start.
You're describing a failure of foresight.
Most of the companies I've worked for had long-term strategic plans that they actually followed. It was a very rare thing to be blindsided by a new, unexpected opportunity that they would actually want to take.
Take the Pizza Hut example from the OP. If from the get go there would have been these third parties that operate a delivery business and if they'ld knew at Pizza Hut that using them to deliver pizza's would have been cheaper then to hire a bunch of drivers, they never would have hired a bunch of drivers to begin with......
Third-party delivery services have existed for a long time. As I've pointed out, the recent change is a change in the minimum wage laws for app-based delivery drivers.
I mean, these are facts of life...
As an employee you aren't guaranteed a job at the company for life.
And as a business owner, you aren't guaranteed success either.
You don't know what the future brings.
There's a big difference between "we'll strive for loyalty but we don't have a crystal ball" and "we'll drop you and your whole department like a hot potato if we we think we can get an extra 0.1% ROI for a year."
An enterpreneur will grab opportunities to maximize profit as those opportunities come along.
So will the employee. If one of my employees gets a better deal elsewhere, he'll leave and that might put me in terrible spot also.
In fact, this happened to us a few years ago.
An engineer who was paid well and given a big responsability. He had an important position. He left for another company where he got paid a bit more (an amount we couldn't afford at the time). Him leaving hurt us pretty bad as we just had a big project and made up a planning that included all employees - him especially.
That hurt us very badly. I could also say that he was the architect of that situation. He took the job and made that commitment and then dropped us like a rock.
But succession planning is still your responsibility as the business owner... especially when you've made it clear that you expect decisions to be made on the basis of profitability alone and not, say, loyalty.
It's a two way street, you see...
You think I'm not "compassionate" because I'ld drop employees like a rock if it means I can maximize money for me as the employer.
But the employees wouldn't flinch to do the exact same thing. And that's fine - I'm not complaining. But what's good for the goose.... right?
It goes both ways.
The impacts are very different, though. When you lay someone off, they lose their main source of income. When someone quits, you get your other staff to cover off the missing staff member. If you don't pay a premium for overtime work, there could be no net cost to you at all.
Yes. If I see an opportunity to accomplish more with less, again... why wouldn't I do it?
Because every opportunity to do more with less is also an opportunity to do even more with what you have.
Again, it's not like people plan for such. Such things simply happen. Businesses grow and as they grow they get bloated. Every once in a while you step back and audit your workflows and optimize. That's just good business sense to do so.
Maybe I've just lucked out working for responsible companies, but in my experience, businesses most certainly do make and follow plans for growth.
There are entire companies built around doing only that. You hire them to audit your company and they'll tell you where you can optimize workflows, where you loose time and money. And implementing their suggestions might very well mean that certain jobs become obsolete, enabling you to generate the same value with only 8 people then you did before with 10.
This is also an opportunity to generate 130% (or whatever) more with the 10 you have.
Back when I was an employee, I actually triggered such a thing once when I was working as a consultant and it wasn't even my job.
This was also a business that had grown over time and got bloated. They wanted a new software to streamline things again instead of 27 different excel sheets.
I analyzed the entire thing, worked out a solution and in the process, not even intentionally, a specific person's full day worth of work was reduced to 1 click on 1 button. Ironically, it was the person that everyone there felt was "hugely important" due to all the "hugely important" work that person did.
But by centralizing all those excels into a relational database, I managed to automate the woman's job and reduce it to just one click. And just like that, she was gone.
Sure sucks for her, yes, but what else is there to do? Keep her on the pay roll to do 1 click every day?
Or look at where you have holes or opportunities elsewhere in the organization, find one that aligns with her skills, and yes: keep her on the payroll.
All of which cost more money for less value.
... if all of the underlying assumptions ans forecasts are completely accurate, but forecasts always have some uncertainty about them.
A few paragraphs back, you yourself were talking about how hard it can be to predict future needs. If that's true, how can you be sure that 8 is the right number of staff and not 10? 12?
A lot of business decisions end up being nothing more than dressed-up wild-*** guesses. If you're going to base your decisions on a wild-*** guess, better to pick the wild-*** guess that doesn't mean throwing a bunch of families into chaos.
Errr....
If I can accomplish the same value with 8 as opposed to with 10, then doing it with 8 is as objectively better then it gets...
If you're only considering options where you accomplish the same value, then you're experiencing a failure of creativity.
Because that's objectively better ....
It's only objectively better to the extent that you can see the future.
This is short sighted.
The company does what the company does.
If I need only 2 people to answer phones for tech support, there is no point in hiring 4.
You only need 2 people to answer the phones for tech support because you haven't figured out how to increase sales - or sell enhanced tech support packages - to the point where you would need 4 people.
A layoff is admission that the company leadership failed in some way: maybe they failed to foresee the circumstances they found themselves in, or failed to be attractive enough to customers, or failed to be capable of pivoting their workforce in times of change, etc., but there's always a leadership failure behind it.
