Employment CSR: do companies owe us jobs?

A recent article by NYT columnist Bob Herbert decried corporations for not rehiring American workers while at the same time enjoying profits that have returned to pre-recession levels. There has been an unlimited supply of related stories about how corporate revenue has rebounded while the unemployment rate seems to be making a permanent home at 10% , leading to the "jobless recovery" monicker. While this "new normal" has been criticized, it's worth thinking about what the CSR obligations of employment are.

It makes business sense, in the old and new economies, to minimize the amount of people one pays. In all firms, wages and benefits are a primary cost driver. The recession forced some business to cut costs, and others used the atmosphere as an opportunity to restructure in general. What many firms found is that they can maintain the same or better levels of profit with fewer staff. So why rehire? And why blame them for not rehiring? They shouldn't and we shouldn't blame them.

Part of the reason existing corporations haven't absorbed the extra workers in the unemployment pool is because the economy contracted: businesses closed. That is one source of lost jobs are gone until new businesses start. New businesses have faced disincentives in launching: flatlining consumer spending; difficult and expensive credit; stronger competitors resulting from consolidation during the recession. Just because the surviving firms have rebounded does not mean that they've additionally picked up the workers shed by companies that went under. Nor do they have an obligation to. What creates a social obligation is if a firm was irresponsible in their employment practices.

For example, some of the jobs the economy shed weren't eliminated; the responsibilities where simply delegated to other employees. Further, high unemployment increased competition among job seekers and created the opportunity for firms to depress the wages paid for those higher workloads, as currently employed workers were held hostage by economic conditions. The ethical impasse occurs where firms increased workload and froze pay on purpose, without being forced to by economics. Destroying employees' quality of life for "productivity" gains is not socially responsible. CSR and social enterprise significantly include an obligation to treat employees' fairly. Refusing raises to mirror inflation + doubling or tripling workloads  without increasing pay + threatening to fire dissenters = not CSR. But the lack of a jobs rebound does not necessarily suggest that firms have chosen this unethical route.

Another CSR foul that saw garnered press coverage is HR discrimination against unemployed workers. In the early throes of the financial crisis, the nation was sympathetic to the unemployed because so many talented, respected, valuable people suddenly found themselves that way. But the mood rapidly and irrationally flipped to contempt, even though the same talented, valuable people comprised the unemployed, with average unemployment exceeding 35 weeks (8 months!). Despite the data that proves that unemployment is a long-term condition across the economy rather than relating to merit, some firms have reprehensibly instructed HR departments to not hire currently unemployed workers. This is a poor, ruthless decision suggesting that a company sees its own survival or rebound as reflecting the national economy, which does not comport with data or reality. Worst of all, the practice perpetuates societal unemployment. Some companies have been outed, but most use this practice subversively. It's wrong and no firm that does it is socially responsible.

Wrap up: it's logical for firms to only hire the workers they need. But it is not acceptable for firms to exploit the recession by taxing current employees with radically increased workloads and the threat of unemployment if those employees assert their value or attempt to recover their quality of life. It's also unconscionable that firms discriminate against the unemployed, a tenth of all workers, in hiring decisions.

Human resources has been mostly affected by CSR through diversity initiatives, but other ethical issues around discrimination and unemployment are just as important.