Workers Brave New Job Frontiers
As the economy recovers, it is coming back changed. Jobs are more tenuous, and many people find they can no longer entrust their security to employers.
WASHINGTON — WHEN Jim Cabrera graduated from college more than 30 years ago, his parents expected that he would go to work for a company from which he would eventually retire. Corporate recruiting literature was full of phrases like "Make your career with us."
Now Mr. Cabrera is vice chairman of Drake Beam Morin, a firm that advises companies and employees who are parting ways. The working world he graduated into when Eisenhower was president has changed its rules dramatically.
"The proverbial psychological contract has been broken," he says. The new contract, either unspoken or explicit, between employers and employees is a short-term deal.
As the economy rolls slowly into recovery, it is coming back changed. Corporations are leaner, warier, traveling light. More tasks are hired out or piled onto existing staff. Jobs everywhere feel more tenuous.
Under the new rules, according to Cabrera and a number of labor economists around the country, companies offer a job for the moment. Employees manage their own careers, shepherd their own progress in acquiring salable skills, and oversee their own retirement programs.
The job as a source of security is disappearing in the view of many. Economic man must carry his security with him now, in the form of flexible skills and constantly current knowledge.
"It's yourself," Cabrera says.
"Go to work in a capacity where you learn generalizable skills," even if it means a pay cut, says Gary Burtless, a labor economist at the Brookings Institution. Narrow skills like stoking a steel furnace or writing computer programs in a single software language are not likely to sustain a career.
"Deepen your skill base," says leadership consultant Stephen Covey. "The only real security lies in knowing that you can keep producing something the world wants."
Between World War II and the mid-1970s, American workers knew unprecedented prosperity and job security. Since then, blue-collar workers in one major industry after another have seen ranks thinned and wages cut.
In the latest recession, the restructuring cut deeply into white collar and management ranks as well. Taking the long historical view, Mr. Burtless sees the United States economy returning from a remarkably secure interlude to the industrial norm of "creative destruction" - the continual closing down of the inefficient or obsolete in favor of new enterprises. Whether these conditions are a result of recent changes or a longer-term development, the emerging economy no longer allows people to entrust their
security to their employers.
It has the backhanded benefit of forcing the sometimes-jarring readjustments in people's lives that keep their work useful and competitive.
Fifteen years ago, when John Southall worked on the sales force of a large food company, most of his colleagues expected they would eventually retire from the company. "I figured I'd be there for a long time," he says.
Today, only 2 or 3 percent of that sales force is left.
After years in a subsequent job as a sales manager for a large cosmetics firm, Mr. Southall has worked as a consultant for over a year, making good money day by day, but not nearly enough to match his old annual income.
He lives in Fairfax, Va., an affluent Washington suburb with good schools. He is looking for a job. "There are compromises that I've looked at that I would not even have considered five years ago," he says.
These are some signs of the times:
* Up to 30 percent of the labor force is engaged in what experts call contingent work - part-time jobs, short-term contracts, placements by temporary help agencies, and freelance or consulting stints. They are perpetual outsiders, sometimes prosperous but usually without benefits or sense of permanence.
* Fewer companies are offering even their permanent employees fixed retirement benefits. Instead, they offer fixed contributions to the employees' 401k accounts, so-called "cash-and-carry" retirement plans.
* Only a third as many people laid off in the last recession expect to return to their jobs as is typical in recessions.
"Companies are saying we're not going to make such long-term commitments anymore," says Daniel Mitchell, a labor economist at the University of California, Los Angeles.
"Most people worked for a long time for an employer and were taken care of," says Andrea Saveri, a researcher at the Institute for the Future in Menlo Park, Calif. "So much is changing all at once," she says about the new terms of employment, "I think it's all up for grabs."
Some of the new insecurity may be temporary, ready to fade as the economic recovery becomes more secure. Some could be eased by changes in policy - especially reforms to curb the health-care costs that lead firms away from full-time workers.
But much of the change in the job scene is likely to be permanent. And change itself is likely to be faster and more constant than in the past.
More people are working for smaller companies. Fortune 500 firms have actually reduced their work force over the last decade while the total number of employees has grown by tens of millions. And in general, says Mr. Mitchell, "the smaller the firm, the lower the wage, the fewer the benefits, the higher the turnover."
Big firms are getting smaller for two very different reasons. One is that firms in trouble, like Sears and the Boeing Company, need to cut costs.
Another is that automation and new management models for organizing businesses mean more productivity with fewer people. Ford, for example, has cut staff while increasing productivity and without, apparently, increasing workloads.
No one can be sure how much further downsizing will go. Sar Levitan, director of the Center for Social Policy Studies at George Washington University, believes that downsizing may have already exhausted itself. The extra layers of personnel laid on over the prosperous postwar decades have largely been pared away in many industries.
Even the trend toward temporary and contract workers may play out, he says, as employers find they cannot invest in them or depend on their loyalty.
Yet a widespread vision of the future is that companies will consist of core staff members, valued and relatively permanent employees in whom a company can invest. Networked with the core will be clusters of contingent workers and partner firms, perhaps arranged into shifting, nebulous "virtual corporations," similar to teams that assemble for motion picture projects.
Many people may be well-paid for their services, and their lives may be more flexible and autonomous than in the past. But they will have to manage their own careers, and even core staff members will need to constantly prove their value, says Ms. Saveri.
This is a vision of a more demanding future for people at work. So far, it has meant finding jobs at lower pay and less satisfaction for many people, according to Drake Beam Morin surveys.
But people are capable of weaning themselves from corporate security, says Dr. Covey. "People are so much more creative, have so much larger capacities than we assume they have."
He cites a client company, a Texas oil company, that opened its books to the employees of a plant slated for closing, giving them all the raw data it had for deciding the plant's fate. Trust and the employees' sense of control was greatly enhanced, he says. Their solution: Close the plant and train workers for new jobs elsewhere.