According to a 2011-2012 Towers Watson North American Talent Management and Rewards Survey, despite a volatile economy and a stubbornly high unemployment rate, almost 60% of U.S. companies are having trouble attracting critical-skill employees. This is an increase over 2010. Those companies also have to balance that against strong pressure to manage costs, a growing trend of expecting employees to work longer hours, and a steady drift toward decreasing the rate of merit pay raises.
Having just commemorated Labor Day, it is a good time to consider the meaning and purpose of this holiday, often referred to as “the day of the worker.” What are the most important factors that companies and managers should consider as they celebrate their organization’s greatest asset: its workers? Do companies do a good job of demonstrating that they value their employees? And does leadership understand the things employees value most?
The History of May Day
First, a brief history. According to the U.S. Department of Labor, it is not clear who actually initiated the concept of Labor Day in the U.S. In many other countries, the International Workers’ Day – as it is dubbed almost universally around the world – is celebrated on May 1st, not September, and is called May Day. Labor Day in the U.S., however, did not originate from May Day. In fact, the government in the U.S. specifically avoided celebrating ‘the day of the worker’ on May Day and opted to establish Labor Day instead. But to understand the origin of Labor Day, it helps to understand how May Day arose. For that, we must go back nearly two centuries to the other side of the globe.
May Day originated in the 1800s when demands grew throughout industrializing nations for an eight-hour workday and better working conditions. In 1840, Samuel Duncan Parnell — a New Zealand carpenter — refused to work more than eight hours a day when erecting a store for merchant George Hunter. At that time, laborers – including men, women and children — commonly toiled 10-16 hours a day, six days a week, in deplorable conditions. Parnell said, “There are twenty-four hours per day given us; eight of these should be for work, eight for sleep, and the remaining eight for recreation and in which for men to do what little things they want for themselves.” Because there was a dire shortage of skilled labor in New Zealand at the time, he successfully negotiated this working condition and campaigned for its extension in the fledgling Wellington community, which was agreed to in October, 1840. New Zealand, thus, became the first country in the world to adopt the eight-hour workday.
The concept eventually spread to nearby Australia. Stonemasons began to strike on May 1st, 1856, demanding an eight-hour workday. Eventually, the government agreed that workers employed on public works should enjoy an eight-hour day with no loss of pay. The stonemasons celebrated with a procession of 700 people on May 12, 1856. By 1858, the eight-hour day was firmly established in the building industry in Australia and by 1860 the eight-hour day was fairly widely worked throughout Victoria.
Thirty years later, in the American city of Chicago, workers made the same demand for an eight-hour workday. They too began their strike in early May 1886. Demonstrations went on for two days. In trying to disperse the public assembly, an unidentified person threw a bomb at the police. The police reacted by firing on the workers, killing many demonstrators and several of their own police officers. This led to more protests the next day. As the police started to disperse the crowd, a bomb exploded and eight policemen died. The next day the police rounded up some of the key players in the demonstrations. Eventually eight men were brought to trial. Although there was never evidence linking them to the bomb, they were found guilty and the judge sentenced them to death. Four of them were hanged and another committed suicide while in jail. In 1893, the other three men were pardoned by the governor. This became known as the Haymarket Affair. In U.S., there was no desire to commemorate May Day because of its connection to the tragic Haymarket Affair. Strangely, though, several other countries chose to commemorate the significance of the events in Chicago and adopted May Day celebrations as the International Workers Day.
Labor Day: Recognizing Contributions of Workers
However, that doesn’t explain how Labor Day originated in the U.S. or why it is celebrated in September. Even now, it is unclear who first proposed the Labor Day holiday for U.S. workers. Some records show it was Peter J. McGuire. Others believe it was Matthew Maguire. Both were union leaders. Either way, the Central Labor Union adopted the Labor Day proposal which included a demonstration and picnic. By 1884, the first Monday in September was selected as the date for the holiday and the Central Labor Union urged similar organizations in other cities to follow the example of New York and celebrate a “workingmen’s holiday” on that date. The idea spread and in 1885 Labor Day was celebrated in many industrial centers.
Over the years, Labor Day grew in importance. By 1894, 31 states had adopted the holiday in honor of workers. In 1894, Congress passed an act recognizing the first Monday in September of each year as Labor Day, a legal holiday. The celebration includes a street parade to exhibit to the public “the strength and esprit de corps of the trade and labor organizations” of the community, followed by a festival for the recreation and amusement of the workers and their families.
What Labor Values Today
Laborers have come a long way since then. There are a myriad of laws that protect workers’ rights and sets standards for pay, working conditions, and employment practices such as anti-discrimination laws, child labor laws, minimum wage and overtime laws (to name just a few). Labor laws aside, many studies have shown that it is in the best interest of businesses and employees alike if workers are treated with respect and feel valued. The most progressive companies understand that the greatest resource any business has are the people who do the work of the business.
Despite that, many companies still have an incomplete understanding of what employees want and how best to make employees feel valued. Indeed, a recent Strategic Rewards study showed that companies increasingly reported difficulty in attracting and retaining employees — particularly critical-skill and top-performing employees. There appeared to be a particularly large gap between high and low-performing companies in their ability to draw and keep top talent. Why? Perhaps it is because a survey indicates that while 86% of companies think they treat employees well, only 55% of employees think they are well treated.
That may explain why the smartest companies are always looking for new ways to make employees feel valued. Fringe benefits come in all shapes and sizes. For example, Google, one of the richest of employers, provides employees with $5,000 if they are adopting a child, $12,000 for tuition reimbursement, and up to $12,000 matched to a favorite charity. They also provide a $500 expense account for take-out meals for new parents during their 12 weeks of paid maternity leave. Mars, the candy company that also owns a pet food division, allows employees to bring their pets to work. Tech startup Qwiki reimburses employees for transportation costs to and from the office, whether it is a train ticket or a free bike. They also provide a company laundry and dry cleaning service and reimburse membership dues at the gym of an employees’ choice. While these perks may sound ‘cool,’ they don’t rank among the top things that employees want in order to feel respected and valued.
Employers need to focus on what motivates employees most. So what do employees want in order to feel valued? A survey of 1500 U.S. employees by LIMRA, a consulting and research firm, asked what factors would be most important when considering two similar job offers, each with comparable salaries. Here were the results. Note that some of the most important items don’t cost the company any money.
|Dental, medical, and retirement plans||62%|
|Competitive increases in salary||50%|
|Fulfilling, rewarding, and challenging work||37%|
|Opportunity for personal growth||33%|
|Work-Life balance – telecommuting & flex time||31%|
|Growth potential of the employer||27%|
Above and beyond those factors, other highly-valued perks were time-saving incentives. Employees highly-valued perks that save time such as shuttle services, daycare and on-site dry cleaning. Employees also want to be able to make decisions, have reasonable job security, and be treated with respect.
On the heels of yet another Labor Day, companies should do more than just give employees a day off and commemorate past improvements in working conditions. It is important for companies to acknowledge that workers are a vital part of what has made and continues to make America great. In recognition of the contributions made by workers toward achieving the highest standard of living and the greatest productivity the world has ever known, company management should seek to better understand what employees value and then do what it can to provide those factors. That will make every day Labor Day.
Quote of the Week
Labor is the great source from which nearly all, if not all, human comforts and necessities are drawn.” Abraham Lincoln
© 2012, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.