Why workers maintain gains amid losses

Layoffs hurt. But employees are finding new options - and firms open to rehiring

Stability rules.

In a year that saw the continued demise of dotcom dreams; a corporate world badly shaken by the events of Sept. 11; and a national economy that teetered for months on the brink of the "r" word before officially being declared in recession last month (with a start date back in March), it should come as no surprise that American workers are increasingly looking for stability in their jobs.

According to one recent survey of chief financial officers, by Robert Half International, 28 percent of CFOs interviewed said they wanted a stable employer above all else - including salary and advancement opportunities.

The once-mighty lure of stock options mattered to only 4 percent. And while that survey only covers one of the top echelons of the workplace, career and workplace experts say stability is coveted at every level these days.

What that means - for now, at least - is that employers once again have the upper hand in the see-sawing balance of power, which in recent years has tilted unquestionably in favor of employees.

In a tightened economy, with hundreds of thousands of layoffs this past year, employees aren't flitting from job to job anymore, and employers no longer have to go begging to find qualified talent that meets their needs.

But that's not the end of this year's story. Experts say the shift in power is most likely only a temporary one, and that it by no means gives employers the leeway to downsize with the kind of slash-and-burn ruthlessness they exhibited in the late 1980s.

Due to a confluence of forces that have emerged over the past decade - including increased awareness of human-resource issues in the workplace as well as the irrevocable information revolution - experts say that in the long term, skilled employees will continue to wield extensive power in the marketplace.

"The pendulum swinging in favor of organizations is very, very short-lived," says Dan Pink, author of "Free Agent Nation."

"In the grand scheme of things, the meta-pendulum has already swung. Forces that are much, much larger than business cycles have shifted the balance enduringly," he adds.

Unskilled workers are always vulnerable to swings in the economy, say experts, while the top 10 percent of the workforce will always be able to write its own ticket, even in difficult times. But in general, they say, the average worker has more options today - giving him or her more freedom in the marketplace.

For one thing, the information revolution has changed, and will continue to change the workplace, despite the bursting of the dotcom bubble. Laptops simply make it easier for workers to operate more independently within organizations, or as contractors.

"That's a change that is enduring," says Mr. Pink. "It has nothing to do with business cycles, and everything to do with a shift in how work is done and what sorts of things are valuable."

For employees who do get laid off these days, it is much more likely than ever before that they will be offered outplacement services than just handed a pink slip and told to clear out. That's due in part, say human-resource experts, to ongoing shifts in employer attitudes toward their workers.

Instead of seeing workers as resources to be used and then replaced, as was the case in the 1980s, employees are often seen now as "human capital" - something to invest in and nurture.

It's a concern that's been further heightened by the terrorist attacks of Sept. 11 and their aftermath.

In addition, say outplacement experts, employers are sensitive to the fact that the economy may well pick up as quickly as it nosedived. To be able to rehire laid-off workers or attract new talent, they realize they must be careful in the way they downsize - or risk facing labor shortages because of alienated employees when the economy picks up again.

"Many companies are asking, how do we approach downsizing with severely strained financial resources, so we can do it right, and still have access to those people in 18 to 24 months," says China Gorman, COO of Lee Hecht Harrison, a global outplacement firm with headquarters in Woodcliff Lake, N.J.

One of her clients, she says, a Fortune 500 company that had to lay off several thousand workers worldwide recently, was so concerned about how it fired workers that it hired transition coaches for all its division presidents. The executives were coached in how to tell workers about the downsizing, and in explaining the reasons for it.

"The general feeling among the people being laid off was that they were being well cared for," says Ms. Gorman. "The care that the company took in planning and communicating the downsizing seemed to communicate to the folks leaving that the company wanted to do this very difficult thing in the very best way they could."

A handful of companies, including Southwest Airlines, have gone even further - promising employees there will be no layoffs at all. Such employers say they understand the importance of no-layoff policies in maintaining the morale of employees, and in future recruiting and retention efforts - all important elements of a company's overall productivity.

In the short term, of course, all the downsizing leaves thousands of people searching for jobs in a tight market, which gives would-be employees little room to make demands upon prospective employers.

"There are just more candidates on the market, which means employers have more choice," says Mark Mehler, co-editor of Career Xroads, a guide to career-management websites. "Money should not be the No. 1 criterion for a new job right now. Your objective is to get in. Once you're in, you can show them you've got the right stuff, and then you'll get the money."

But even those priorities are expected to shift when the economy improves. Career-development experts say that long before the economy worsened, many workers were searching for a sense of worth and value in their jobs, making them more likely to leave employers who didn't respect issues such as work/life balance.

When the economy picks up, they say, that trend will intensify once again.

"People are asking soul-searching questions," says Caela Farren, a career-development expert and principal with MasteryWorks. "The questions I get are: Is this really what I want to do? Do I want to spend my life with this company?

"Employees' expectations are higher," she says. "The bar has been raised, and it's not going to go back down."

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