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Shareholder value versus employee value?

When is a profit too low for a company to continue riding through the storm of low growth and uncertainty?

I understand the main reason companies operate is to make a profit, but when does perceived shareholder value outweigh the value of experience, loyal service, hard work and commitment?

I, like many others, have experienced redundancy not because teams made a loss, nor even scraped a profit, but because we “only achieved” double-digit margins that were (in my case) 3% below the declared “target”.

That happened when significant profits were declared in one year, so the board of directors increased the targets for the following year, which turned out to be a challenging market with little expected growth.

It then became difficult to recruit when we were unable to offer competitive salaries and people were snapped up by competing, entrepreneurial small and medium enterprises, leading to revenue stagnation.

Although profit was significant when discussed amongst my peers and fellow pub discussion groups, many were happy to keep people working and start to return to single digit profit margins following near bankruptcy since Covid.

My values have always been to care about my team, look after my people, talk to them every day, socialise with them, share their concerns and help solve their problems.

A happy team works together to the same goal of meeting client demands to deliver a quality project on time and achieve satisfaction all round.

Breaking teams up on a year-by-year basis because of annual accounts can undermine that.

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The Editor, New Civil Engineer,
​Telephone House, 69-77 Paul Street, London, EC2A 4NQ
​Email: nceedit@emap.com