Table of Contents
B. Why the Salaried Class Must Become Socially Wealthy?
As Simon Sinek says “Start with the why.” Our brain doesn’t want to participate in anything in which it finds no purpose or reward. Understanding the risks of not becoming socially wealthy as well as the advantages of becoming socially wealthy are the two sides that we need to see first to get the motivation for becoming socially wealthy. Once I convince you that by becoming ignorant and uninterested in building your social wealth, you are missing out on great perks, I show you the amazing short as well as the long-term rewards of your social wealth, you can then read the rest of the article to transacting with social money.
Employee Value
You may already know that:
the value of an employee to a company is not his/her productivity, but rather the cost for the company to replace the employee.
An employee is not just a robot to bring skills and experience to the table. Such robotic employees are plenty in the job market. There is always a better coder, seller, manager, or accountant than you and you are not special.
When you bring only skills and experience to the table, you compete in the job market for price and productivity. With technology bringing more productivity tools every day, and with the advancement of AI, productivity is hardly a challenge for companies.
With the globalized economy, companies look for cost-cutting all the time. As more and more skilled employees enter the job market, the employees compete for cost. There is always someone who is ready to work at a fraction of your salary, promising more hours than you.
Companies are more and more adopting hybrid work culture for cost-cutting. This has also made office politics almost obsolete, if not completely obsolete. So, no one will be able to hold onto their jobs with merely political powerplay.
When there are many who offer what you offer in a job, your replacement cost is very low for a company.
Therefore, after a certain stage in your career, you may find growth super challenging. Not only does growth become stagnant, but you also remain under the threat of losing your job.
The stress of the threat of job loss, career stagnancy, fewer challenges, and other insecurities added to your already stressful job makes your overall life destabilized.
Taking Cue from the Street Businesses to Solve Employee-Value Problem
You may have noticed that in a place where someone starts an ice cream business, sooner or later many ice cream parlors get opened on and around that business. This is the same for almost all small businesses. Whenever there is a food joint, there are many other food joints that mushroom up. Wherever there is a bookstall, many other bookstalls open on and around that stall. There are streets where you get queues of computer shops, or mobile shops, or clothing shops.
Anchor Effect and Agglomeration
The phenomenon of multiple businesses of the same type clustering in one area is often referred to as “agglomeration.”
This clustering can lead to economies of scale and other benefits for the businesses involved, which is why it’s commonly observed in various industries and regions. Another term related to this, especially in retail, is the “anchor effect” or “anchor store” phenomenon, where smaller retailers benefit from being in proximity to a larger, more established retailer that draws significant foot traffic.
Anchor Effect in the Job Market Due to Manpower Agencies
In 1945, when Tata Steel started its operations in Jamshedpur, Jharkhand, India, it had a hiring office. People queued up for a job offer. Interview and physical examination and job offer would be instant.
Tata also provided several other employee benefits such as housing facilities, schools, healthcare, and others and employees retired from the same job. Few of the employees even completed over 40 years in the service.
Till 1990, the trend was almost the same. Employers and job seekers had a direct relationship. Employers would advertise for different posts, and job seekers would respond to the applications. Potential employees sell their service directly to the potential buyers, that is their future employers.
Not that this system has gone out of fashion. Army, Navy, and most government jobs are advertised through employment bulletins. However, such posts do not even account for 1% of the employment needs and posts.
Several factors include cost-cutting by companies through the removal of their HR departments, preferring more contract-based jobs that come with less burden of adhering to labor laws and regulatory pre-requisites, automation, and increasing supply vs lower demand has led the companies to look into the Anchor Effect of employment.
Employment exchanges are being made obsolete by private manpower consulting and manpower supply companies. Employees are the goods now, and there are mushroomed placement and manpower agencies.
Now that employment is traded, brought, and sold through the agglomerated placement agencies with anchor effect, you need to see yourself as a product for a specific position, rather than a potential employee offering direct service to the employer.
How do businesses outcompete their competitors in agglomeration?
Go to any small business clusters and you will invariably see the following phenomenon.
- People go to those businesses where there is already a rush of other people.
- Successful businesses in a business cluster pay attention to smell and appearance. They often put up innovative boards, and lighting, and use specialized fragrances.
- Most successful businesses in a cluster offer limited goods(but not a single good), and provide very quick service.
- Most of the successful businesses in a cluster are well-known in the area for something or the other(either their quality of the good, service or something extraordinary).
- Businesses where people come by car and take services draw more crowds.
- Most of the successful businesses in these clusters have their regular customers.
Earlier, if you had a skill that no one else had, if you were a master of your skill, or if you had a very high skill with significant experience, then you would have been a sought after valuable employee. Companies would not even think about replacing you because finding a replacement for your experince and skills would be hard.
However, because employment shop agglomerates are the new normal, and employers are visiting the employment shops to purchase the employees if you are so good that you have no competition, then there are no buyers.
People go to Taz Hotel for a fine dining experience. They do not go to street food joints to seek the extraordinary, but they go there simply as a social outing, to chill, to experience the unique amongst the common, to experience good services, to experience the famous in the crowd.
Therefore, if you are to win today’s employment market, then you have to have extremely modest skills that several others have, and yet be famous, renowned, and sought after by the riches for a chill social experience.
Today’s employee demand is for employees with the simplest of skills, who can deliver faster than others, offer a cool social experience to the employers, and with whom people want to hang out.
Today a Class X pass who had never done programming would most likely end up getting a Java programming job over an 8-year-experienced Java programmer if he brings quick delivery, great service, fantastic social experience, few other mundane varieties of skills, good persona into the table.
This is because, today, most of the jobs even at the specialized levels can be delivered by tools and technologies.
Irrespective of how much money one has, what is the percentage of the fine dining experience one wants to have vs a street food joint chill one wants to have?
So what is more worthwhile today? Working on your skills and becoming a social zombie? or becoming a social star who brings some skills? It is very easy to replace the Refrigerator of your home, but not the milkman. It is easy to replace skill and experience, but not social skill and experience.
Humans are social animals. Be it businesses or companies, we always want to deal with people we love, more than people who are great. Every human being seeks a social connection first, emotional exchange next, and productivity third.
A best performer is easily replacable, but the most loved employee is not.
Therefore, today the replacement value of an employee is the replacement value of his/her social wealth that comapny gets from him/her and not the skills or productivity.
It doesn’t matter whether you agree or not with the principles at this moment. You can always bookmark the article and revisit it, once you start experiencing the layoff pressure, and find it hard to get interview calls through both direct approach, as well as through your agencies.
