Many of these cases come from the world of startups: people launching new companies that have often high potential for success but aren’t yet earning good pay or profit. Many founders are eager to start a business and feel the pressure to get up and go as quickly as possible. The incentive to churn out wins and stunts to show off grows, and the pressure often mounts for companies to provide an extra measure of drama.
“If a startup is trying to prove something, it can come at a cost,” says Kern. “Frequently it can be about having a flashy logo or production value,” she says. “The things they feel they have to go out of their way to do that’s causing the stress.” She said that in her experience, “Usually they came into work and thought, ‘Ah, did I just make $70,000 yesterday?’ Instead, they felt like they were falling short. It was the straw that broke the camel’s back.”
In one of the cases detailed in the case studies, a homeless shelter executive retaliated against a woman who sought a payout from him after he stripped her of her employee benefits at the agency, the authors explain in Tech Misfits. After setting out to build a remote team and refused to fire a single employee, he allegedly told the woman, “You have been sacked. Go back to your car and never come back.”
In another case, the firm’s controversial finance director made millions of dollars while maintaining a 6,000 square foot mansion that was also rented out for his personal use, the case study reports. And in a third case, an exec collected tens of millions of dollars in company cash before being accused of embezzlement.
“This can get extreme,” says Kern. “There are some people who might literally dedicate themselves to their careers and now that their company is successful, are really eager to know where their next big pay check will come from.” For the most part, these cases involve small and midsize companies that, rather than being high-profile hot companies, are often building a business and trying to build something of value. “It isn’t like they’re some Silicon Valley startup that’s blowing up,” she says.
One CEO she interviewed believed that hiring temporary workers that worked for him meant less money. “He told me he thought the people would be more expensive. And it was true that they were cheaper. Because they were done by temp agencies.” Many CEOs overestimate the number of employees they actually need, says Kern. “In my experience, the majority of small and midsize entrepreneurs overestimate their business needs, and this is not uncommon,” she says. “It’s usually men who overestimate, and women who underestimate. We’re not surprised that the people who say they can’t afford to pay their employees are disproportionately men.”
Many companies end up promoting interns who receive pay but are still quite young, but the authors note that it’s important to think about the bigger picture when these issues arise. “When the basic facts come to light about how these interns were paid, if the company won’t disclose them, the company is at the risk of losing that employee and taking a major financial hit. And if you don’t appear to be upfront with your employees, you’re at risk of significant employee conflict.”