Over the course of my 35+ years working for government contractors, I witnessed many changes on the industry side as the government’s emphasis on price shifted. Not that price was ever unimportant, but it’s importance has grown over time. Competition for government work has driven companies to tighten their belts to be competitive in a tough market. First to go were “luxury” items – first class or business class travel, lavish holiday parties, company picnics, company-sponsored sports, company boxes at sports arenas and “boondoggles.” Employees were generally understanding of the need to cut back on things like this.
As competition stiffened, further cost-cutting measures included rental-car sharing, limiting holiday celebrations to employees only or charging for guests, reducing merit and promotion pay increases, replacing pensions with employee-contributed savings plans (401Ks), and cutting back on company-paid training and attendance at seminars. Employees grumbled but most stayed if they were not dissatisfied with their work environment.
The next steps in cost reduction measures did not go over as well. This included getting rid of free coffee in employee breakrooms; no more “bagels on Fridays” or changing to once a month; holiday parties reduced to luncheons or potlucks or eliminated altogether; further cuts in pay increases and training budgets; and reductions in benefits like vacation/sick time and company contributions to health plans and employee savings (401Ks). Employees became more willing and inspired to seek work elsewhere.
Most recently, companies have been forced to actually cut pay, eliminate benefits and make dramatic reductions in overhead including the elimination of indirect positions. Employees who could find work that did not result in pay cuts left. The entire culture of the company is impacted by these changes. More concerning to the government should be the loss of qualified personnel with contract and program history. It remains to be seen whether the benefit achieved from getting services for less money is worth the cost in less-qualified, less-motivated personnel.
I was fortunate to work in this business in the “old days” before all these changes. The motivation, loyalty and commitment of the employees to the company has degraded right along with the loss of the rewards and benefits.