The View | JPMorgan did something amazing by raising pay for its 18,000 lowest-earning workers
Big banks and other corporations are recognising moral and sound business reasons to foster a contented workforce
Business has been pretty bad over at Swatch, the Swiss watch company. Demand is falling and its latest report shows profits slashed in half; however the directors have ruled out cutting costs by cutting staff. In a statement that will no doubt astound big guns of the investment community the company maintained that employees cannot be considered as “just a cost factor”.
Meanwhile across the Atlantic JPMorgan Chase did something to improve its image by giving quite substantial pay rises to 18,000 of its lowest paid employees.
High turnover, prompted by low morale and poor pay, is costly in terms of recruitment, management time and outcomes
Chief Executive Jamie Dimon declared that the bank was doing this because “a pay increase is the right thing to do”. Cynics, of whom there is no shortage when it comes to bankers, dismissed this move as a piece of PR and an attempt to divert criticism over high executive pay – this is understandable considering that Dimon’s total remuneration package totals somewhere north of US$27 million. The bank’s new pay policy should therefore be seen in perspective yet it is meaningful. Call centre workers, for example, are in line for a pay rise from US$10.50 per hour to as much as US$16.50; that’s a pretty big hike.
So, what’s happening here? Can it be that business is actually putting its money where its mouth is? It’s too early to draw any general conclusions but there is something in the air. Even in Hong Kong we have seen Li Ka-shing, the doyen of big business, talking about the need to do more for the “deserving” poor, even though his suggestion of inching up corporation taxes has drawn wry smiles.
Yet the very fact that Li felt the need to discuss this matter and that companies like Swatch are going beyond routine declarations of appreciation for their staff reflects something of a new mood.
In part this is a response to the populist surge which has seen the so called underclass rise up and declare that they are thoroughly fed up with the established order, even though some of this frustration is expressed in bizarre ways; not least in the United States where working people are flocking to the banner of a billionaire presidential candidate with a way less than stellar record of concern for his own employees.