The Herman Trend Alert

May 18, 2022

De-Leveling: A Serious Mistake Many Employers Make

Misguided employers are saving money in the short run while they are setting themselves up to lose employees and create lawsuits in the longer term. This Herman Trend Alert details what they are doing and why this model is such a bad idea.

What is De-Leveling?

These unthinking employers are hiring, especially young people and minorities, into levels that are below their real ability and pay grade. In the interview process, companies are promising candidates that once they "prove themselves," the money and promotions will come quickly. The reality is often quite different. Almost immediately, the new recruits are required to work above the pay level they were offered at the outset. Companies then make it very hard to get the promised promotions and salary increases. Frequently, it takes years for them to reach the pay and seniority level at which they should have been hired in the first place.

One Public Case-in-Point

The federal lawsuit filed by Charlotte Newman, a Black woman business development executive at Amazon Web Services (AWS), outlines this problem very well. Newman who focused on underrepresented founders, was a four-year veteran of the e-commerce giant, where she held a number of different positions. When she had first applied for a higher-level job, for which she was qualified, she was offered a lower-level position and was promised promotion to the higher level. Within months, while still being paid at her entry level, she was assigned to and doing the work of a senior manager. But wait, it was actually even worse: Newman was paid significantly less than her white coworkers, especially in valuable Amazon stock. Obviously, this additional insult was in direct violation of anti-discrimination laws. When, after having been underpaid for a year, she finally received a promotion, she was sexually harassed by a (now former) AWS director. He retaliated by giving negative feedback to her manager which affected her performance review. Amazon's response was they would "investigate" these allegations; it appears Amazon has some serious work to do.

Why De-Leveling is A Bad Idea for Employers

De-leveling presents a massive legal risk, because it is usually practiced with minorities who can easily find evidence to support their claims. Employees feel de-valued from the start, which is not a very good foundation for long tenure. Employee turnover is costing employers worldwide literally trillions of dollars, euros, pounds, and other local currencies. Months or years later---especially in the current labor environment---de-leveled employees can look around and easily find other employment opportunities that recognize their actual abilities and appropriate paygrades.

Felt, but Fuzzy

On the other hand, employees are feeling the inequity of a de-leveled workplace and getting uncomfortable with it. This discomfort will result in turnover among other workers as well---even those who were not directly affected, because to today's employees, diversity, equity, and inclusion are very important. Wise employers will instruct their hiring managers to avoid de-leveling.

Advice to Candidates: Just say, "No."

In today's market where real talent is scarce, you can just say "No." You do not have to tolerate being de-leveled. However, you must keep in mind this unfortunate fact: White men are hired and promoted based on potential, while women and minorities are hired on past performance. So, if you are not a white man, be prepared to demonstrate that "past performance." Make sure your resume reflects the quantified value of your accomplishments. Be as specific as possible and use numbers and percentages to detail the value you have brought to previous employers.

Not New and Not Confined to the Workplace

Sadly, de-leveling is not new; for centuries (maybe millennia), women and minorities have struggled with being deleveled. It even happened to me years ago. Moreover, our educational system also treats minorities differently, often requiring additional prerequisites to take advanced courses.

Special thanks to Lydia Dishman writing in Fast Company and to Recode for their coverage of the Amazon suit. To read the entire article, visit https://www.fastcompany.com/90609719/amazon-slapped-with-federal-lawsuit-for-alleged-discrimination-and-sexual-harassment

Next Week's Herman Trend Alert: Robots Helping Nurses

When I was 16 and a candy-striper* in a hospital in New Orleans, one of my jobs was to deliver ordered medical materials, including hypodermic needles and surgical trays of sterilized instruments from Central Supply to the wards. Some years ago, the same robots who delivered mail in large companies were programmed to perform delivery functions in hospitals. Now, from Diligent Robots in Austin, Texas comes Moxi, a robotic helper for the hospital floor capable of freeing up nurses to spend more time with their patients and less time running back and forth to the supply cabinet to get required items.

* Candy-stripers were teenage volunteers. We were called candy-stripers because our predecessors had worn pink and white striped pinafores. At Touro Infirmary, ours were solid salmon-colored jumpers.

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WIN AN EMPLOYER OF CHOICE^® AWARD TO RECRUIT THE PEOPLE YOU NEED NOW

With the workforce crisis detailed in several Herman Trend Alerts, you could really use a leg up in competing for top talent. Winning the Employer of Choice^® Award could be your competitive edge in this very tight labor market. Celebrate your employee-centered corporate culture! This coveted award is well worth the effort, yet is not easy to achieve. Download the extensive application at EmployerofChoice.com; or for a Word^® version, drop a note to Joyce@EmployerOfChoice.com or call Joyce at 1.336.210.3548

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SAVE THE DATES: APF'S GLOBAL VIRTUAL CONFERENCE JUNE 14-16 AND 21-23

Sponsored by The Association of Professional Futurists, EXPLORING NEXT: The Futures of Human Experience: People, Places, Systems, and Things will be an important gathering for people interested in the future. With Peter Schwartz of Salesforce delivering the opening keynote live, the conference will feature recognized speakers from around the world, including our own Joyce Gioia whose topic on the 21st is "How Experience will Transform Organizations." Watch this space for more information

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To read this Herman Trend Alert on the web: https://hermangroup.com/alert/archive_5-18-2022.html.

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© Copyright 1998-2022 by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman Trend Alert," by Joyce Gioia, Strategic Business Futurist. 336-210-3548 or http://www.hermangroup.com. To sign up, visit https://www.HermanTrendAlert.com. The Herman Trend Alert is a trademark of The Herman Group, Inc."