All businesses are subjected to federal and state laws that define the legal framework within which they operate.

Paulo Ribeiro de Lemos

Bureaucratic, trade, employment and tax related laws which are imposed on businesses shape stakeholders’ strategic decisions and impact shareholders’ value. The At-Will Employment Presumption, in force in all U.S. states, except Montana, constitutes a perfect example of the extensive effect of a law in the blueprint of a society, and its business landscape.

The At-Will Employment Presumption is a default regulation used in the U.S. through which “an employer can terminate an employee at any time for any reason, except an illegal one [discrimination and harassment], or for no reason without incurring legal liability.” [1] Likewise, “an employee is free to leave a job at any time for any or no reason with no adverse legal consequences.” [2] It also means that “an employer can change the terms of the employment relationship with no notice and no consequences.” [3] Despite the possibility for contractual exceptions to the At-Will Employment Presumption, the spirit of the at-will law permeated American society, and shaped the way Americans understand, and foster their relationships with their employers.

“the dynamics of the at-will labor market propel resulted talent, whether leaders or team members, to enter an upward spiral of increasing expertise and career enhancement while boosting productivity and profitability”

Advocators of the At-Will Employment Presumption call for equality in rights within the employer-employee relationship, leaving the ultimate probe for sudden dismissal to the mutual merits and benefits of the labor liaison. Critics of the At-Will Employment Presumption claim that employees become extremely vulnerable to arbitrary decisions impacting their employment status, and therefore affecting their confidence and productivity levels. Regardless of one’s beliefs and opinions on the merits and faults of the At-Will Employment Presumption, the matter of fact is that this default regulation has brought creative tension into the labor market in response to an increase in uncertainty for both the employer and the employee.

The War for Talent

In an at-will context, the potential for termination of the employer-employee relationship is pressing, resulting in losses for both parts. To mitigate losses, and attract and retain the finest talent in the market, employers must offer a leading compensation package accompanied by a premium career path while investing in the professional development of their top talent. The loss of a fully developed top talent to a competitor is costly, and detrimental for the execution of the business. Publicly traded companies operating in at-will states take these issues very seriously, and have policies in place, specifically targeted to create and develop an industry leading talent base, and therefore mitigate the rising costs of a highly inefficient employee turnover process. Moreover, a manager’s quest for profitability shifts the employer-employee bargaining power from the far end side of the employer closer to the center, and significantly reduces the likelihood of arbitrary decisions while calling for a continued upsurge in competences and skills from leaders and team members alike.

Accordingly, managing talent in an at-will context entails aligning the mindset of the talent with the dynamics of the at-will labor market. Leaders shall inspire talent to shift their focus from job security to endure personal empowerment and professional development. Talent that pursue excellence in everything that they do, and educate themselves about the industry, the business and inherent best practices and innovations, are more likely to stay competitive in the long-run than those that settle for the status-quo. Within the very same lines, leaders that keep expanding their knowledge base and fine tuning their coaching skills are more likely to keep leading and empowering talent to drive results than those that do not foster additional learnings. In other words, the dynamics of the at-will labor market propel resulted talent, whether leaders or team members, to enter an upward spiral of increasing expertise and career enhancement while boosting productivity and profitability.

Similar to other business leaders in countries where employers are to dismiss employees only for cause, at-will leaders also build, coach, develop and manage talent while creating an engaging culture that encourages collaboration. They also ensure that strategic planning and execution are integrated at all levels to drive strong decisions with sound business acumen. They too create a customer oriented culture and commit to change to wring out inefficiencies. However, unlike any other, at-will leaders benefit from an extremely favorable legal landscape to bring performance management to the very core of their management endeavors, and to make use of an “entrusted will” to take decisions that drive timely results and increase shareholders’ value.

[1] The At-Will Presumption and Exceptions to the Rule, National Conference of State Legislatures Website, www.ncsl.org

[2] The At-Will Presumption and Exceptions to the Rule, National Conference of State Legislatures Website, www.ncsl.org

[3] The At-Will Presumption and Exceptions to the Rule, National Conference of State Legislatures Website, www.ncsl.org