The connection between JobKeeper payments and executive dividends

In the midst of the COVID pandemic, the Australian government quickly put together the JobKeeper payment program. As with any policy, there were supporters and critics. Some thought it was not enough, others too much; some thought it should continue for longer, others that it will bankrupt the country. While we may debate many aspects of this payment scheme, I am sure it is clear that it was not created to ensure that executives received million-dollar bonuses!

It was recently reported that Anthony Scali, CEO of Nick Scali, will receive a $4.4 million dividend due to strong performance while claiming more than $3 million in government support. Some of you may feel that this is absolutely justified as, at the time the payments were claimed and accepted, Nick Scali met the policy criteria, while others might think that the right thing for the company to have done would have been to return the funds as they were not ultimately required. Yet another group might say, ‘What does it matter?’

It matters, because every employee is making a judgement about the values of such organisations and their leadership teams. Midway through 2020, McKinsey and Company conducted a research study, the results of which suggested that post-2020 there will be a ‘war for talent’ as employees increasingly question whether the companies and people for whom they work demonstrate values that align with their own.

As recruiters, we are always busy in January and February as people come back from leave wanting to discuss their career plans for the new year. In 2021 we have been busier than ever, and the focus for many of our clients has been on finding roles and organisations that are flexible and balanced, and where individuals feel valued, challenged and that their values are in alignment with the company’s. Very few people we are seeing are focused on earning more money, taking their next big career step or getting a bigger office. This is not to say that remuneration and career progression are no longer important, but talented employees are increasingly balancing their need for growth and financial compensation with their values, integrity, family and work–life balance. The principle of ‘win at all cost’ is no longer one that the majority of us want to live or work by.

So, here are some key points for leaders and organisations.

• What you can get away with may not be what is accepted by your teams, customers or suppliers.
• You will lose talented team members and customers if you behave in ways that are at odds with their values.
• You will attract team members through the values you display – and remember that there can be a big difference between the values you profess and the values others see being put into practice.
• Losing great talent will impact the business’ bottom line more in the long term than will any benefits associated with a short-term win.

During our conversations with jobseekers, many have shared with us examples of companies whose behaviour suggests a lack of shared values. These include:

• accepting JobKeeper payments while the organisation is making a record profit
• putting a hold on salary increases while offering executives bonuses for good performance
• cancelling or reducing training and development support, including both in-house and external support for courses and qualifications
• maintaining reduced hours for staff even as sales performance and profitability improves
• stretching out payment terms and further negotiating on price with suppliers who do not have the clout to protest, often disproportionately affecting smaller businesses
• restructuring roles and adding responsibility without any commensurate recognition or recompense
• renegotiating bonuses, commissions and pay increases after they have been promised.

Examples of behaviour that suggest strong, value-driven leadership include:

• managers working with and providing solutions to individuals as required – we all experienced the pandemic differently and often need different solutions and support
• companies prioritising employees’ health and wellbeing over profit
• leaders sharing their vulnerability and concerns regularly and honestly
• organisations being transparent and consistent in their communications and actions
• organisations and leaders making clear the principles behind their decision-making so that their employees understand their rationale.

As a leader, employee or organisation, remember that people are looking at you and, yes, they are judging you. The majority of prospective employees, customers and suppliers will no longer compromise their integrity, values or family simply for the sake of money. While you may retain them during these unpredictable times, you will no longer release the discretionary effort, passion, and commitment that all organisations will need to move successfully through 2021 and beyond.

Further reading: https://www.theguardian.com/australia-news/2021/feb/04/nick-scali-ceo-to-get-44m-dividend-after-company-received-jobkeeper-payments