Bye Bye White-Collar

Have you noticed a decrease in white-collar workers in the workforce? 

It's definitely happening!

Especially at the management level.

Are you a white-collar manager in a corporate job? You may want to listen to this episode to see what you should be doing to plan for your future.

Transcript

Pete: [00:00:00] Good morning, Nat. 

Nat: Good morning, Pete. 

Pete: Woo. I'm pumped up. 

Nat: Nice. What's on deck for today? 

Pete: Oh boy. Well, first, why am I pumped up? Well, I figured out my family can actually drive on icy roads. Cause we've got that freezing rain. Literally can drive on the, on icy streets and not damage a car. So I'm pretty happy that nobody.

Did anything to any of my cars. So I'm pretty, 

pretty excited. Washed up and get the salt off 

right away. We're working, you know, my car wash though. His his pipes froze. You know, it's so cold. Oh, I felt so bad for the guy. Right. Because, you know, he lost all the time because of the, the the cold because you can't wash the cars when it's 12 below and then literally when it starts coming, it gets better where people now want to wash your cars.

He loses two days. Because he froze his pipes, right? And he says, I couldn't get plumbers. [00:01:00] So, he goes, I had to wait a day to get plumbers. To get my business back going and they charge 200 bucks an hour each. And he had two guys and they were there for five hours. Oh, it was like crazy. Right. 

Nat: So sounds like blue collar jobs are taking off.

Pete: Well, yes. And let's, so why don't we talk today a little bit about, there was a article in the wall street journal a few months ago, and it talked about this idea that white collar jobs are being phased out. And so I thought we would talk about, because this is really relevant, we work with executives all the time that are just done with the corporate world, or they're trying to hedge a little bit from a standpoint.

So, so I thought as we talk about this is that corporations are eliminating or kind of reducing the number of white collar workers. So I thought we'd talk about the 10 reasons why large corporations are reducing the number of white collar positions. Sound good?

Perfect. Yeah. All right. So what would be one reason why large corporations are eliminating these white [00:02:00] collar positions? 

Nat: I always like to blame things on the bean counters, so I think cost cutting and efficiency is always probably up there towards the top. 

Pete: Well, absolutely, and labor is, and especially executives, is one of your largest expenses, right?

So that's an easy one to certainly cut out or reduce, for sure, if it's the point. And that's why we work with so many executives, right, that they You know, they get cut no fault of their own. They just get cut because it's a it's a number They're a number right and their salaries, go a long way towards hitting objectives So so all right, so that is one.

What would be a second one the 

Nat: Well, I think, you know, every day we're walking around with our, your, our iPhone or Android phone. So I think they're just, you know, the digital transformation, there's so much technology. Things are being automated, things are being, you know, they're easier to do than, than ever.

 AI, all kinds of things going on. 

Pete: Yeah, technology, even does [00:03:00] this idea that I, you don't need as multiple managers and locations, you can literally have zoom meetings, right? And. So technology is, is made it easier to have less less executives from this point. You know, I think a third one, and we learned this with the pandemic is corporations realized that they could flatten their organizations, that they didn't need as many layers of managers.

And I think that's, that's a big one. 

Nat: Yeah, people can work from home and I'll, you know, they don't have to have a manager managing the manager who's managing the 

Pete: manager. Yeah, I think back when I was at Ford, how many layers we'd have and just sending a simple communication up the command chain was unbelievable.

I mean, we had to have, like. It was, it was crazy, like a summary of a summary of a summary and then a note on top that described the three summaries and every executive had to check everything from that standpoint. And in that corporations, it's just easier to have less layers [00:04:00] and certainly the pandemic didn't help, it helped with that.

Okay, what would be another one? Mergers 

Nat: and acquisitions, we're hearing a lot about that lately, you know, especially in healthcare, things are merging. They're acquiring and so it's kind of like they're, they don't, there's, unfortunately, there's a lot of redundancy. So, like, you know, a lot of times, a lot of the workforce 

Pete: gets cut.

Yeah, absolutely. I, I was working with the I'm working with the executive now that his company, he, he's working with me to find a franchise to invest in a franchise, but he said, Pete, you know, we got acquired and then my position became redundant. So we had multiple, you know. Vice presidents of marketing and so they just eliminated his position and you're going to see more consolidation.

There's just no question about it. That's especially with private equity having a lot of capital out there. They're just buying businesses and in absorbing them from that standpoint. Okay, what would be another one? 

Nat: Well, I think right on the heels of that is, you know, strategic restructuring. I mean, you don't [00:05:00] have to merge or acquire a company to basically restructure.

So some companies can just say, Hey, let's restructure. 

Pete: Yeah, we certainly saw that with Ford. 

Nat: We were strategically restructured and you're done. 

Pete: Well, you know, but that's, you know, at Ford, we would redo the market areas. Every couple years, right? And we would go from having a big, a big office to small offices.

And so that was a way in which they could reduce head count from that standpoint. So, yes, certainly restructuring to take out overhead or people certainly is a way will be another one. 

Nat: A lot of times companies will spin off divisions or units or they decide to kind of focus on their core competencies. 

So, you know, you could, could find it out like, Hey, your whole divisions no longer exist one day. Yeah, 

Pete: absolutely. And you, you go away, right? With the acquisition or they just eliminate your positions. And I think about with Ford, I [00:06:00] mean, we spun off, we had ownership and other things like rental car companies.

We spun off a lot of that kind of stuff. Just because they wanted to get back to their core and then even went further is to getting rid of some of the brands that weren't tied to our core in terms of manufacturing. So absolutely, I mean, it is about getting back to support. I think G did the same thing, right?

They eliminated divisions because they wanted to get back to what their core was. So that's a big one of why white collar positions are going away. So, and why we get the opportunity to help more executives invest in franchises. All right. Well, what would be another one? 

Nat: You know, a lot of times corporations can get pretty focused on their shareholders or their stack.

And so the shareholder value enhancement, if you will, so that, you know. I guess if you're not enhancing the shareholder value, you might find your jobs not there anymore. 

Pete: Well, or just, you know, they, they have to always find a way to get a better return for that's the responsibility of the corporate leadership team [00:07:00] is to maximize the return for the shareholders, right?

And a lot of people forget that. And one of the ways in which you can do that is lower overhead which is people. And so, and white collar workers, senior level executives are Just making more they're they're an easy target and we see this right especially as you get older You're making more money and you're more of a target.

 Or just a just another number What is I I use this and you know I've always said this is that there was an article out there. It said 50 percent of 50 year old corporate executives So 50 percent of 50 year old plus corporate executives are pushed out of their Out of their job before they're ready or pushed into retirement for the ready, right?

That's crazy Right. So if you're over 50 years old, you have a target on your back. There's just no question about it. So you don't want to be the next shareholder enhancement. All right. What would be another one? 

Nat: You know, we hear a lot about the global economy and, and wars [00:08:00] and, and supply chain. So I think there's a lot of uncertainty with the global economic environment.

 So companies might decide they need to kind of streamline to save some cash. 

Pete: Absolutely. I mean, certainly if it disrupts your supply chain to your point or anything, right, especially as we're starting to see regional flare ups right now, I just think about shipping. You know, and, and stuff like that, where it's now being, you know, the, what the U S military is protecting ships that's real for these, for these companies from a standpoint.

So, okay, good. What would be another one? Well, we never 

Nat: like to talk about this, but I mean, I think sometimes there actually are performance issues. I mean, let's be honest, you know, sometimes maybe we're not. The older we get, maybe we're not quite as good at the technology or, you know, some things might slip a little bit, and that could contribute to it sometimes.

Pete: Yeah, absolutely. Right. You don't hit your objectives. I mean, that's kind of the real world is when you are a senior [00:09:00] level executive, if you don't deliver your position may be going and when they're eliminating you, they may just eliminate that position or that layer from that standpoint. So certainly you're at risk if you're not performing at the level that you're supposed to be.

Perfect. What would be another one? 

Nat: Not never been really able to adapt to remote work, you know, so if, you know, a lot of people. Can't perform working from home and so that might the company might end up re evaluating to see if they can figure out different ways to do things. 

Pete: Well, that's a big one, right?

And we read in the news all the time that people, they're, they're saying we want everybody back at the corporate office and bottom line is, is that they, they, the executives just don't want to go back. I'm working with somebody right now that has company wanted him to go back to the corporate headquarters, move back there because he'd move somewhere desirable.

Nice during the pandemic and they said okay time to come back to the mother ship back to Where the corporate headquarters is [00:10:00] and he said no i'm not going to do that So he's now looking at investing in a franchise business So that he can live where he wants take control of his destiny, right? And he may get another corporate job and have a franchise on the side but the idea is is that that whole remote work and corporation is trying to pull that back it's just It's not going well is what i've been reading 

Nat: Yeah, I would say a luxury once enjoyed becomes a necessity.

So, you know if you if you loved it You're not gonna go back, you know to the 

Pete: grind Well that that you know that Kim the long commute and stuff like that now I think there's some benefits to be working in an office. But anyways, that's for another podcast So Nat when we talk about white collar workers, I mean Especially white collar executive senior level executives.

They have a bull's eye on their back and corporations. They're they're eliminating white collar positions. There's just no question. They're reevaluating that proposition. And that's why we work with so many executives to look at investing in a franchise, right? Just because [00:11:00] it's a great alternative to.

You know, basically this being a corporate executive, they can keep their corporate position, have a franchise on the side, maybe diversify a little bit. But the idea is, is that you got to target on your back. So you got to start putting together a plan to make sure that you're not a number. You're not a redundancy.

You're not a simple number that they can reduce their payroll. Yeah, 

Nat: I think you'll everybody sleeps a lot better at night if you have at least a plan B that you're kind of working on and you could implement in quick order if you have to, right? Yeah, right. 

Pete: Safety net, right? Whether it's having money in the bank, or it's having a little extra income, or your assets diversified so that the stock market crashes, you don't lose everything.

Right? The idea behind this is, Always having a plan B. Alright, well I'm off to get ready for the next ice storm. Welcome to Chicago. Yeah.