job-for-life no more

Taken from the pages of “Corporate Amnesia”, this is an extract ….




Of all the factors that contribute to corporate amnesia, the single biggest is the modern policy that has given rise to the flexible labour market. It was not so long ago that individuals had one, perhaps two, employers in their working lifetimes. Alongside job rotation within organisations, which can often take place every two years, job-hopping to new employers is now responsible for the second greatest measure of peacetime jobs disruption this century after the 1930’s depression.


The flexible labour market is the name given to the managerial stratagem that gives companies and other organisations the adaptability to change their workforce, almost at will. Usually identified with bankruptcy, downsizing, radical jobs-change in the workplace and the consequence of acquisitions, mergers and re-structurings, its nature is also associated with job creation and expansion.


In the West, the work model in its present form has been around for more than two decades now, occupying two recessions and, now, two recoveries. Its accelerating course first emerged in the mid- to late-1970s, which was perhaps the zenith of corporate corpulence in the West, at least as it applied to employment numbers within organisations. It was a period that is identified with the emergence of serious competitive threats from the Far East and parts of the Third World.


A collective and growing sense of urgency at the time led to an upheaval in the industrial landscape, with companies suddenly becoming more pro-active in their management strategies. In particular, it spawned a variety of new management techniques, among them the discipline of Change Management, a somewhat amorphous management practice that has overlapped with equally indistinct practices such as Business Process Re-engineering, Continuous Process Improvement, Total Quality Management, Just-in-Time, multi-skilling, de-layering and outsourcing to name a few.


Underpinning them all has been the flexible labour market which different Western countries have implemented in varying degrees, the argument being that a mobile workforce allows better control of overheads - especially in times of recession - the ability to be more flexible on jobs that change their nature and that new blood allows the importation of new ideas. While intended to improve efficiency, it has also been a cost-cutting and staff-reduction exercise. In many cases it has been an opportunity to displace the higher-paid, older generation of employees and get rid of dead wood in that now familiar management remedy called downsizing.


As a word, downsizing first entered the management lexicon in the early 1970s when it was coined by the automobile industry in reference to the shrinking of cars. It was given its anthropomorphic connotation in about 1982 as a euphemism for cutting worker roles. At the time, it was typically viewed as a one-time fix but the direction of the new work model has not reverted, incurring widespread insecurity among the workforce. The ease with which the word has entered modern management vocabulary is illustrated by the 1997 imagery used by the chief executive of a troubled pharmaceutical company: “We must reduce the amount of DNA in this company”.


The new demography has also been supported by widespread improvements in technology and the social and political changes that have accompanied a succession of Governments of different political colours, among them pensions transferability and the accelerating trend towards early retirement following the large influx into middle management of post-WW2 baby boomers. In the U.K., Government pay policies in the 1970s actually encouraged job-hopping; it was the only way individuals could legitimately increase their pay. More recently, there has been a sizeable trend towards temporary jobs and short contract work.


Overall, the past two decades have been characterised by a constant succession of layoffs and subsequent hirings. While permanent layoffs have always been a feature of recessions, they now also occur in large numbers during the recovery phases, even at companies that are doing well.


There have been other significant changes in the nature of the workplace …….


For employers with high staff turnover and low productivity