| making 'People' work

To have meaningful work that enables our independence and to live with dignity should be a basic human right

Month: August, 2013

No More Jobs We Cannot Afford

Here is an article I first posted in 2010.  It questioned the relevance of continuing to manage ‘jobs’ as replaceable ‘parts’ of the production system and the role of HR as the function for managing the inventory of human ‘parts’.

The ILO (International Labour Office) estimates in its latest Global Employment Trends report that up to 50 million jobs will be lost by the end of the year, that the financial crisis has also become a jobs crisis – that is 210 million people out of work – and does not include the working poor.

Only a matter of months ago the crisis was a labour and skills shortage. Now it is a jobs shortage crisis. Two sides of the same problem.

There is little about business today that resembles that on which the way we work is based. In the late 1800s to early 1900s – the genesis of our present labour systems – the majority of workers had to fulfil tasks, broken down to the level that would give employers the most control and lowest costs. The rationale for low costs was workers who performed repetitive functions would need limited training, could be quickly replaced, also quality could be controlled and work output could be monitored against production targets, meaning they could be supervised by people with limited supervisory training.

Such a system was possible (not necessarily successful in human terms) because workers supplied time and labour (easily transacted), because they were inclined to stay with employers, because goods were homogeneous (a little training could go a long way), and because competition was limited (lower costs trumped quality and features). This treatment resulted in workers becoming entrenched in certain tasks, certain processes and restricted by the titles and job descriptions that classified them. Employers, when unable to find job applicants with a like-for-like match to their job description lament the skills shortage, while perfectly, but differently, qualified candidates are overlooked.

As work conditions change and the flaws in the employment system become more significant, the tools that have been developed to prop it up make employment more a matter of process than of management, as employers wait for these processes to do their thing: for competency-based assessment to deliver perfect employee/job fit, for performance appraisal to bring people in line with expectations, for bonuses to spark motivation and loyalty, for feedback boxes to make people feel included. Managers who are not trained in the sciences behind these processes can only administer them. Employees too wait, to feel more valued, to be provided opportunities, to know jobs are secure.

Worse, this fundamentally flawed system adds costs that cannot be justified in difficult economic times. Predictably, HR expenditure is one of the first to be reduced in times of economic pressure, leaving confusion over what processes will continue or disenfranchisement over the hypocrisy of the “greatest asset” rhetoric.

If these are not the times to significantly overhaul the current systems of employment, there is no other. When the economy turns, recovery will be stalled by a deflated workforce, large tracts of workers without recent work experience, whose last jobs are ones no longer in demand, and who have been unable to update skills, and organisations without the systems and facilities to engage a workforce with anything but the short-term need.

In Fortune magazine September 1994, William Bridges wrote about The End of the Job. “As a way of organizing work, it is a social artifact (sic) that has outlived its usefulness.” Traditional work systems produce the very workers who are eliminated when organisations face pressure: the non-empowered, those lacking skills to be flexible, those who get the job done rather than work on outcomes. Bridges argues that it is not just certain jobs in certain industries that are disappearing, it is the need for jobs themselves, “trying to use outmoded and under powered organizational forms to do tomorrow’s work”.

Many organisations are hamstrung in their ability to employ what they really need because they spend time and money in employment-related activities they don’t understand, are unable to quantify in cost and have no expectation of return on the investment.

New labour market-wide employment methods are urgently needed. Our list of changes includes:

  • Human resources must become qualified (currently there is no minimum qualification) and that qualification must include business, finance or economics. The profession must learn to reference more than just itself when it develops and delivers its programs. Surely in this time of intense human need where, recessions and depressions are striking at the world’s largest economies, the profession called HR should be coming into its own. In all the media on employment issues, where is HR? The role – and if HR do not want to change then another profession will take over – must be more than the administrators, guardians and do-gooders of employment. HR have long complained they are not taken seriously but many given a “seat at the strategy table” squandered the opportunity. A SHRM (US-based Society for Human Resources Management) survey reported that 83% of HR respondents believed interpersonal communication skills was academically valuable to their careers, and only 2% of respondents believed the same of skills in finance.
  • Employers and workplace laws alike must allow greater mobility of workers in, out and around organisations. Employee retention is not often well thought through; in attempting to hold on to knowledge and stave off costs of recruitment, employers frequently invest in maintaining a status quo. The potential talent base becomes limited as does the ability to respond to changes (except, ironically, through redundancies). When inevitably they do implement change it is usually reactive and the disruption, insecurity and instability drains the organisation of energy and confuses its purpose.
  • Employers and workers alike need to treat all work forms as being as, if not more, valuable than full time, permanent positions. Portfolio careers means undertaking work in multiple jobs and across industries. Employers will benefit by being more adept at using talent when and where it is needed and employees will be less dependent on one employer. There will be a double-benefit as employees have more opportunities to gain on-the-job skills but the costs of doing so are spread.
  • Better recognition by recruiters for independent contractors. Independent contractors are self-reliant, taking responsibility for maintaining their own skills and knowledge and the contexts in which they can be applied. Independent contractors are a valuable source of specialised expertise and can be engaged as needed. For this, for bearing the costs of their own expenses and for not being paid statutory entitlements, contractors will command a higher fee. Treatment of contractors – suppliers like any other – is not always positive if the organisations create an “us” and “them” culture. To unions who do not have jurisdiction over commercial work contracts, independent contractors are effectively scab labour and in some states and industries, legislation has been passed that forces independent contractors to be subjected to employment laws.
  • Imagine if employee work histories were as transferable as results between educational institutions. Sure, this information would be subjective. Hiring, for starters would be a very different process with this information and not just reliant on the CV, the reference check and how well the candidate jumps through the hoops set up for them.

Real leadership to make real changes, not just another round of quick-fixes, is needed now.

Work is bad for you

In 2009 researchers at the University of Michigan Institute for Social Research, José A. Tapia Granados and Ana Diez Roux, released findings on their studies on the relationship between health and the economic growth.  Focusing on the years between 1920 and 1940, they found that population health generally improved during the four years of the Great Depression while during recessions in 1921 and 1938, mortality increased and life expectancy declined during periods of strong economic expansion such as 1923, 1926, 1929, and 1936-1937.

These results seem to counter the belief that prosperity increases life expectancy, particularly when other studies provide evidence that increased standard of living is a significant factor in longer life spans.  The US Congressional Budget Office figures of 2010 indicate that those born into the highest socioeconomic group will live, on average, 4.5 years longer than those born in the lowest socioeconomic group.  Since the introduction of social security benefits in the US in 1940, male life expectancy has increased 12.7 years, and for females it is 20.7 years.

Research from the Austrian Institute for Economic Research in 2008 concluded that people who lived on €5,000 per year had a 50 per cent higher mortality rate than those living on €17,000.    Longer periods of unemployment were related to a higher mortality risk.  For each additional month in unemployment a year, the mortality risk increased by 5.2 per cent compared with continuous employment.

Studies such as these lead us to understand that life expectancy can be prolonged by adequate levels, and security, of income.

What is it about prosperous times that reduces average life expectancy?

The University of Michigan study considered some of the possible causes across the population.  Economic expansion, such as China’s recent boom in manufacturing, increases atmospheric pollution that contributes to cardiovascular and respiratory diseases.  They also considered the increased number of workers, particularly young and inexperienced people joining the workforce, would result in more untimely deaths.  Statistics in Australia bear out this theory: each year around 16 per cent of all deaths are work-related, with people between the ages of 25 and 34 over-represented in this number.  Increased levels of income also may contribute to risky lifestyle choices such as smoking, higher consumption of alcohol and drug use across society.

Firms going through growth and business abundance also operate markedly differently to during lean times.  Beyond the higher work pressures that come with increased demand, firms build management layers, which are typically the first casualty of a downturn.  The management layers change the nature of work to one where demands beyond product and service delivery must be satisfied.  Workers are also saddled with the need to ‘please the boss’, whatever form this may take: longer hours, working out the different expectations of different managers, new targets to be met, and feeding the various demands from the competing priorities within the organisation.

The hierarchy itself is a cause of stress for workers, aside from any inequities that may exist, numerous research shows that the existence of a hierarchy can create uncertainty that interferes with an individual’s ability to adapt to change.  A hierarchical system also reduces a worker’s real or perceived ability to control their work, work load, work hours and work atmosphere.  The persistent stress levels lead to poorer eating and sleep patterns and is a known risk factor for hypertension, diabetes, upper extremity musculoskeletal back problems, and cardiovascular disease.

Further exacerbating the problem, those who work long hours or who are stressed and burnt out find it difficult to establish and maintain the social support networks that are crucial to their psychological well-being.

Firms, with their highly developed structures and control mechanisms are literally shortening people’s lives.

The Austrian Institute for Economic Research study provides an interesting insight to how organisations can provide a healthier work environment.  In this study, the life expectancy between blue and white collar workers was compared.  Blue collar workers were found to have a 75.7 per cent chance of reaching the age of 70, while the probability of white collar workers living to 70 years was 84.4 per cent.  The white collar workers’ better life expectancy was a likely result of higher incomes providing more security, and enabled better lifestyles and health care.  White collar workers are also more likely to be better educated, are less likely to work in dangerous occupations, and hold positions in which they would be more likely to have some autonomy in their work.

What was interesting was when the results of a class of workers, ‘night workers doing heavy work’ was examined.  These are workers defined as those who perform ‘heavy labour’ meaning work carried out between the hours of 10PM and 6AM and has an arduous component, such as excessive heat and continuous loud noise.  In addition to being blue collar workers, shift work too is known to contribute to health disorders leading to shortened life expectancy, thus this group was expected to have the shortest life span of all, however they had the same life expectancy – 84.4 per cent – as white collar workers.

It seems that a number of factors lead to the reversal of a trend to shorter life spans for this group.

Under Austrian law, the heavy night workers have special protection.  The Night Shift Workers (employment on arduous work) Act was enacted to protect workers who face serious work strains and high health risks at work.   Under this law employees who work constantly under these conditions are entitled to additional holidays, specific rest periods, extra severance pay, special preventive health and safety measures, and particular pension payments (Sonderruhegeld) at the age of 57 years.  The required breaks and greater security are factors contributing to the better life expectancy.

Another factor that can be reasonably assumed to work in their favour, is that the type of work described is communal in nature.   Commonly, because of their unusual hours they often become part of each others’ social network, forming a greater camaraderie.   While day workers will dash off to their individual meals or use their break time to attend to chores, night workers have no access to outside facilities and bring their own meals with supervisors and workers taking their breaks gathered together.  Eating with others is known to have many positive outcomes.

There is evidence that suggests that shared meals and organisational performance are connected.  Sharing food promotes shared beliefs and solidifies group membership.  Anthropologists have found that the rituals surrounding eating binds people to their shared identity and creates powerful links between food and memory.  Organisational experts know often utilise the benefits of shared meals in their interventions to improve worker morale and company culture.

When times are good, organisations allow their goals to take precedence and they build a structure to facilitate this but by doing so, are literally working their people to death.  The solution may simply be to always operate as though times are lean; people know they are there because they are needed, not ‘fat’ waiting to be cut when tough conditions threaten.  Giving them, not a management hierarchy, control over their own jobs not only saves money but lives.

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