The two week hiatus since my last post, though doubtless painful to my subscribers, was imposed by my move from London to the English Midlands. We have already been heartily welcomed by some of our new neighbours, a wonderful and very post-growthy outpouring of community spirit and lawnmower-sharing. As often happens when people meet my German-American wife, there was some perplexity over pronouncing her name and the inevitable question: “So how good is your German?”. A: pretty good actually, a testament to her persistent practice with relatives, and Duolingo’s nagging, manipulative gamification.
Nobody asks me how good my German is. A: not too bad either, as it happens. I studied more German than any other subject by number of modules while at business school, and came close to landing early work roles in Germany as a result. But I carry no hint of German origin in my bearing (although I can pull off lederhosen when called upon), name, or spoken English, so no-one thinks to ask. And for sure everyone reading this has light hidden under a bushel of various types: talents, avocations, competences, and personality traits that others may not know of despite long acquaintance. This prompted me to think about hidden talents and personal development, the choices we make as younger people, the reinforcement given by teachers, parents, mentors, and work opportunity.
The Post Growth Pioneer firms I studied all devote intentional effort towards people development. In part this is practical compensation for reduced reliance on extrinsic rewards: the PGP bank explicitly rules out paying bonuses against predetermined targets, so as to avoid excessive risk-taking by employees in the investment part of the business. This connects with a broader philosophy of healthy work-life balance, manifesting in reasonable working hours, encouragement to take evenings and weekends off, and generous professional development budgets. This pattern is possible because of the control mechanisms placed on the growth imperative: the bank, keen readers will recall, offers investors only a fixed-rate dividend on Depository Receipts, rather than an open-ended share of net profits. This ensures the bank’s executives retain control over profit targets, giving them much more flexibility with cost factors such as development budgets.
This is part of a theme I call Non-financial employee remuneration. The techniques I found evidence of cover a wide range, from policies that limit working hours but preserve full pay…
‘We piloted a four-day work week [in 2022]… And we then voted and decided that we would continue the shortened work week experiment. Everyone's pay stays the same, but their hours are cut’ [Publisher. Note the intentional all-hands vote to make the experiment a full-time policy; PGPs do not assume, but ask for validation].
…to granting unusual levels of ownership, autonomy, and decision rights…
‘...our philosophy [is] that everybody in the company really should be a director and have some degree of responsibility and share in the decision-making process.’ [Engineering firm]
‘Our leadership style is high accountability, low control’. [Retailer]
…and high levels of flexibility to suit personal circumstances and aspirations, including sabbaticals, frequent role changes, and putting a clear premium on the value of tacit knowledge gained over time by experienced veteran employees.
It should be no surprise that the origins of many of these enlightened policies lie in negative experiences with other firms. Having witnessed the human toll of high stress, target-driven work environments that created a high turnover of staff and unsettled cultures, leaders at the PGP firms are determined to design a more prosperity-centric workplace:
‘They'd [previous employer] hire and fire a lot of people, they would work long hours, not pay very much and stress people out who wouldn't stay very long.’
‘...when I worked at [high-growth competitor], we had a hockey stick growth curve ... very pressurised environment … a treadmill that moved ever faster. And actually it led to me leaving after about seven years ... simply because I felt I was being worn down. I was in my 30s and I was in a cycle of work, pub, sleep, work, pub, sleep, and it was very stressful.’
Sound familiar to anyone?
It strikes me that these non-financial remuneration policies and environments offer the prospect of significant competitive advantage in the battle for attracting and retaining talent. Although I found little evidence of this being practiced, surely there is scope for novel metrics that show PGP employers in a favourable light compared with mainstream competitors? How about Average Employee Tenure (years), Voluntary Attrition (%), Gender Pay Gap, or even Avoided Recruitment Expenses over the Business Cycle?
A big part of this approach is simply making space for community to develop, which is a far higher bar than an annual company picnic. I bet that, within PGP firms, a fair proportion of employees know which of their colleagues speaks German, who dances the tango, who co-owns a wind farm. Sounds like a good workplace to me.