… Account openings, online and in-branch, double in October at BECU. … Randolph-Brooks FCU reports 22% of new funds through ACH are from Bank of America. … Online account opening up as much as 40% at Andera, Harland and Fiserv. – “Bank Transfer Day: Technologists Say Thousands Already Switching,” Credit Union Times, October 22, 2011

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The Tea Party, Occupy Wall Street, and Bank Transfer Day. The outbreak of peace on earth seems a little behind schedule this year. With the upcoming 2012 Presidential election it seems unlikely that this next year will be any less noisy and unsettling. A global financial system teetering on the edge only adds to the chaos. Finally, there is the challenge of tough economic times. Jim Clifton the CEO of Gallup in his new book The Coming Jobs War concludes there is a 1.8 billion jobs shortfall on the planet that translates into a staggering 50 percent of adults seeking work worldwide. Let those numbers soak in — the implications are stunning. Our challenge here in the U.S. is literally the tip of a very large iceberg.

So while there is much anger and contempt directed at our government for its ineptness mixed with cronyism and at corporations for greedy and uncaring ways, these problems mask a more fundamental and substantive problem. We live in a world economy that rewards using technology and other tools to lower labors costs and thus the demand for laborers. It presents us with a mammoth challenge: How do we employ the inhabitants of our planet. It is hard to imagine our ever more connected world community being pleased, civil and even non-violent in a society that is destroying work at such a rapid pace.

In an agrarian society it took a tremendous amount of work just to produce food. For example even as late as 1890 it took 40 to 50 labor hours to produce 100 bushels of wheat; by the 1980’s that number had shrunk to three and it continues to decline. In an industrial society it took great masses of workers to produce the goods. Yet even as our population has increased by about 10 percent since 2001, the Bureau of Labor Statistics reports that the number of manufacturing jobs has fallen from 17 million to under 12 million. The service economy created millions of workers but increasingly now we have become the technology-enabled self-service society and the jobs of tellers, toll booth attendants, elevator operators, telephone operators, secretaries, clerks, and the like have disappeared and they are not coming back. The demand for this precious thing called work is losing ground and thus excludes nearly two billion workers.

Democracy brought us a model for participative government. Capitalism coupled with the public markets brought us a model where over 50 percent of households directly or indirectly participate in the ownership of public companies. Yet participation in work seems headed in the other direction. The old model was that everyone but royalty worked. The emerging model is that only the upper-crust get to work, contribute and fully participate in society. Even here in the U.S. in some states like California the combined unemployed and underemployed (part-time seeking full-time and the discouraged who have stopped looking) exceed 20 percent. According to the latest IRS data, only about 47 percent of U.S. households pay federal income taxes. The number of people with heavy skin in the game — by working, owning homes, paying taxes — is shrinking.

This loss of participation creates relational strife for all sides. Those actively seeking employment resent their plight especially if they have gone to school, worked hard and are unable to feel like contributors enjoying the fruits of earning and getting ahead. Some who have given up may take on an entitlement mindset that is very destructive. Conversely, those who work hard and carry an increasing burden only to subsidize those on the sideline resent the rate of taxes and other forms of support that they must provide. It leads to an extreme form of class warfare between the “haves” and “have-nots.”

Certainly our hope is that some of this is just cyclical and time will reverse it. The greater fear is that a significant portion is a structural change in our society and that the pressures for using technology and other methods will continue to gobble up jobs at a much faster rate than new types of jobs are created.

If this divide and resentment continues to advance as it has in places like Greece and other western European countries, it means the relationship we have with our customers, employees and shareholders will become more volatile, unpredictable and difficult. Currently in financial services we see early indications of an uptick in a movement that has been on-going for a while — flight to local community banks and local credit unions. Some of this is driven by recent monthly debit fees by the likes of Bank of America. NetFlix hit a similar wall when it effectively hiked prices and lost over 800,000 subscribers in one quarter. These events feel like part of a larger pattern.

It appears we have entered a new era of hyper relational sensitivity. Any actions that appear to be uncaring or callous to customers, employees, citizens, or shareholders will have magnified negative consequences. The upshot is that organizations must become more strategically intentional about how we treat our mission-critical relationships. It calls for us to be more engaging and participative with all our stakeholders. H-P’s recently dismissed CEO Leo Apotheker learned this lesson the hard way when his decision to spin off its personal computer business met strong resistance from existing customers. It explains why so many companies are rethinking their strategies of outsourcing key functions like call centers to offshore locations.

This nets down to a simple idea: in a world of raucous relationships too often already on the rocks, stakeholder relationships represent the new strategic asset of opportunity and of untold risk.

(Column appeared originally in ABA Bank Marketing magazine – December 2011)

By ROBERT E. HALL

Not to be reproduced without written permission. All rights reserved. © Copyright Robert E. Hall 2011