The Right Track

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In the face of all the recessions since 1980, employment numbers have simply not bounced back to where there were previously. We need to face the fact that certain jobs are not coming back. Whether they have been sent overseas to cheaper workforces or they have been automated, some positions, most of them less skilled, are gone forever. But it’s not just jobs like cashiers and bank tellers that have been automated or manufacturing jobs that have gone overseas, it is lots and lots of middle level management positions at large companies that have disappeared as well. While this is not good for many Americans, it may be good for business.

This unemployment issue is far from a new phenomenon. In 1930 John Maynard Keynes wrote, “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.” And if you go back just a bit further in the history books to the early 1800’s you will recall that the Luddites feared (for good reason) that the inventions of the industrial revolution would reduce the need for labor. Yet, what the history books fail to tell us is that the worlds’ economies prospered rather than perished in the face of the industrial revolution and Keynes “technological unemployment” while individual workers suffered from being displaced or made redundant.

Today, as our economy faces a jobless recovery and large number of Americans are out of work, several questions arise, not the least often heard is who to blame. During this most recent recession, as well as the recessions of 1991 and in 2001, companies have learned to do more with less at every point on the value chain and at every level in the organization. This is now recent good news for investors, just look at the stock market today. But if that investor is an unemployed American with a family to feed? This tradeoff of fewer jobs for better ROI may not seem so optimal.

The disappearance of many unskilled and middle management positions isn’t the only challenge for companies (to do more with less) and workers (to find a job). Over the last several decades, the “social contract” between employees and employers has changed dramatically. 40 years ago, “mother” IBM for example, was essentially offering career long employment to skilled engineers graduating from top universities. Many of these guys (and yes it was basically all males then) were eager to join a prestigious company such as IBM and fully expected to begin and end their careers there.

Today, as we know, the employment “contract” and expectations on both sides has radically changed. Loyalty is not expected nor much valued. In fact, most college graduates plan on having multiple positions in multiple companies during their working lives. Herein rests a fundamental challenge for employers: how to identify, select, hire, motivate, develop, and retain the top performers who are the folks that they really, really want to have on board.
According to Grahall’s research, the top 90th decile performer contributes 300% more than the average worker and is paid only marginally more.

Companies are running so lean now, there isn’t much room for a wrong hire. And many HR departments seem (certainly from the perspective of the interviewees) to be dragging their feet to fill positions. With all the people out of work, why aren’t companies able to fill opening? There are a few reasons.

According to a March 6, 2013 New York Times article by Catherine Rampell “there’s … little pressure to hire right now, so long as candidates are abundant and existing staff members are afraid to refuse the extra workload created by an unfilled position. Employers can keep dragging out the hiring process until they’re more confident about their business — or at least until they find the superstar candidate.”

The “superstar candidate” comment brings up the concerns over “skill gaps”. That is, can the candidate really do the job? Companies that require highly specialized employees will always need highly specialized employees. But as far as most businesses are concerned, very little, apart from brain surgery, is actually brain surgery. Certainly there are skills and experiences that are helpful, but perhaps the most important skills any worker can have is the ability to learn and adapt.

Here is where what is important for companies (retaining top performers) and what is important for employees (developing adaptability and agility to acquire and retain jobs) can find common ground. The war for talent, which right now might look more like a skirmish, has been heating up during this recession. The need for companies to run lean requires that they hire and retain the best and the brightest. If those people aren’t currently on staff, they need to find them somewhere. It might be a competitor, it might be a college campus, it might be the unemployment line.

So what should companies do to adapt to this new employment environment ?

Companies have changed and so have employees. Companies have learned to do more with less and, let’s face it, they are in business to be profitable. At the same time, employees have learned to use technology to maintain a competitive edge in acquiring knowledge, networking and keeping tapped into the economy. While it’s not the company’s responsibility to hire people they don’t need or retain people they don’t want neither is it the employee’s responsibility to sell their soul so the company can grow, although there may be some 55+ year old unemployed managers who would do anything to keep food on their table and a roof over their head.

So it seems that a redesign of the employee-employer relationship might be in order to keep up with progress. No longer are lifelong jobs available. Rising to a management position no longer means you’ve made it. Enhancing skills has become a necessary and lifelong project. And businesses, even if successful today need to be constantly evaluating and redesigning their people practices. As Will Rogers said, “Even if you are on the right track you will get run over if you just sit there.”

 

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