Demotion is badly done

An interesting study on demotion was recently reported by the Robert Half Consultancy, Singapore. The results of the study were presented by the Managing Director of the company, Matthieu Imbert-Bouchard, and reported in the Singapore Business Times. The extent of demotion is spelt out clearly. Its consequences take a little longer to comprehend.

There is little more commercially disappointing than having to take a step down. I had to do it on two occasions in my career. The first time led to an exciting new challenge which won me back the job I had lost and then got me further promoted. I turned a sow’s ear into a silk purse. That was fortunate. I didn’t handle the second demotion as well. I was older, had big responsibilities and the move threatened to leave me in the wilderness for the rest of my career. Indeed, I did remain there, employed, for three years. Then came an opportunity on the other side of the world…

Demotion always precipitates a lot of soul-searching. In the three companies I contributed to in my employed life I had to demote people from time to time. I found it more difficult than firing them. The demoralising effect of the move is considerable. It often leads to the demoted seeking a new job or contemplating a career change. There may be clear business reasons why, for example, the job has been eliminated or redefined in such a way that the present incumbent is clearly unsuitable for it. Even so, the loss of ‘face’, both at work and at home, is dispiriting in the extreme. We see a fair number of people disappointed by demotion, sometimes despairing from it.

My way at solving this was to offer people help to re-establish their purpose and goals, not just in business but in life. Demotion often comes at a difficult age when some industries suggest that you are already too old to learn new tricks. That is wrong, of course, and a nasty form of short-termism. Most of the developed world is getting older and retraining is a vital part of life.

Our experience today is that many demoted people seriously lose confidence. It is natural that they should do so for a short while but it seems that the damage is longer lasting than we might have supposed. Bosses have started to learn the importance of turning mistakes into lessons; they have yet to discover a way to make demotion an opportunity instead of a failure. Those who face a demotion often fail to weigh up their achievements to date, to have a realistic picture of their financial situation and to explore the options for a totally different lifestyle.

Many people who have collected a small asset portfolio by 45 or 50 make assumptions about their requirements for old age that are quite unrealistic. The rapidly increasing cost of being old is not going to slow down. When the balance of people in a country is older rather than younger considerable sums are required to ensure a modest comfort and reasonable medical attention. Even with significant health insurance coverage, medical costs can be ruinous.

Sensible attention to these matters does not preclude a new lifestyle – indeed the entrepreneurial aspects of such an option nearly always lead to accruing further capital as well as a new enjoyment of life. The core requirement is that you invest your time and money wisely to establish and equip you for the path that will most likely interest you. What we enjoy we usually do well.

There is a further need to be willing to learn new skills, both hard and soft, to make a different business lifestyle work. Demotion, in about half the cases we see, is partly or wholly caused by out of date soft skills. The world of Facebook and LinkedIn and all the other rapid-fire communications systems we are being invaded by calls for behavioural change that can be difficult in middle age. Difficult, but by no means impossible. It takes a bit of courage to face our own shortcomings. When we do so successfully we open doors we didn’t think were there. Behavioural change leads to an amazing ability to lift up even the most depressed, even the desperately lethargic. The opportunities are there. It just takes a little creativity to see them.

As I always say, sunset is simply a promise of tomorrow.

If you get demoted, enjoy your sunrise.