We Didn’t Start The Fire: The Changing Employer – Employee Relationship

by Raghav Singh

We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire
No we didn't light it
But we tried to fight it

- Billy Joel

A story in Fortune sums up the current economic situation well – “EVERY MORNING'S newspaper carries another story of new job losses. We hear the recession has been over for quite a while, but the percentage of workers who are jobless has not fallen as after previous recessions. The Clinton Administration is trying to create jobs, but critics claim some of its new taxes and regulations will destroy jobs.”

The Clinton Administration? This is a story from 1994.

These are difficult times and though we’ve been here before this time it seems different. In past recessions the feeling was that this was just a bump on the road, a readjustment, maybe even something necessary to clear out excess capacity, before things got back on track. On-track meaning lots of well-paying new jobs and cool new companies. For a lot of people any expectation that we’ll get back on-track anytime soon seems to have disappeared altogether. Along with that what’s also changing is the relationship between employers and employees.

Or is it? We’ve been hearing about how jobs are being restructured and changed for a long time. As a grad student in 1987 I wrote a case study in a textbook on how General Motors and other companies had eliminated lots of middle management positions and completely destroyed the employment compact with employees. Books like “Broken Promises” about restructuring and layoffs at IBM, and “Free Agent Nation” about how a lot of employees are just permanent temps reinforced that theme. The common thread seems to be that we’re slowly moving to an era of no job security.

The relationship between employers and employees is just a transactional one. It has never been any other way - some people just thought it was. All the current economic crisis has done is strip away any last vestige of the illusion of job security. A quick look at history shows that the employer – employee relationship that included job security is a temporary aberration in the scheme of things. For much of history there weren’t too many employers other than the government and the army. Job security came from indentured servitude or slavery. The industrial revolution and expansion of trade resulted in the creation of companies and large organizations and the emergence of jobs as we know them today to handle the needs of factories and bureaucracies. For a period starting in the late 19th century and continuing until the 1960s a small, a tiny, fraction of the population in the Western world (it was never more than 5%) worked for one employer on average for 36 years. But most people were still farmers and running or working for small businesses with none of the security or stability available to the privileged few working at a US Steel, GM, AT&T, or the Post Office.

Leaving Dilbertland

Employers recruiting on campuses have noticed that over the past five years at top schools like Stanford, Columbia, Yale, etc., a steadily growing number of students refuse to even talk with them. The main reason is a lack of interest in working in traditional jobs where they expect the work to be boring and the environment to be stifling. They plan to work for themselves and do what they enjoy the most. That should be no surprise – what do organizations offer – promises of a career with the caveat of employment at will and an opportunity to sit in a sea of cubes every day? Who would settle for that if they had other options? That’s a gross oversimplification but it reflects the reality of where employer – employee relationships are headed.

Not everyone has the luxury to work for themselves or the courage to start a business, but the desire of employees to avoid the strictures of conventional jobs is a reality that some organizations have already started to recognize. A few years ago I attended a speech by the former CEO of EDS – Michael Jordan. He said the company increasingly defined work in terms of projects and staffed them with the expectation that no employee would stay more than 2 years with the company. Best Buy has instituted a “Results Only Work Environment” for corporate employees – a policy where employees are focused on results, not tasks and hours.

The jobs of today are just updated versions of the narrowly defined groupings of tasks popularized by Frederick Taylor in the 19th century. That goes against the grain for most people. The employer – employee relationship of today is a necessary aspect of the need to ensure stability in organizations. Narrowly defined jobs supported by consistency in pay. The same Fortune Article referenced above also mentions that: “The job is a social artifact, though it is so deeply embedded in our consciousness that most of us have forgotten its artificiality or the fact that most societies since the beginning of time have done just fine without jobs. Before people had jobs, they worked just as hard but on shifting clusters of tasks, in a variety of locations, on a schedule set by the sun and the weather and the needs of the day. The modern job was a startling new idea -- and to many, an unpleasant and perhaps socially dangerous one. Critics claimed it was an unnatural and even inhuman way to work. They believed most people wouldn't be able to live with its demands.”

This is why Dilbert is so popular.

The Hollywood Model

There really is nothing new under the sun. The employer – employee model that’s emerging is one that’s been the norm in the movie business for a long time. Each movie is basically a company that forms for a short time – bringing together actors, writers, musicians, carpenters, electricians, etc. When it’s over the company is liquidated. Studios provide the infrastructure, and someone else provides the distribution. It’s the purest form of project work. No one expects any longevity in the job.

This is the way it should be – perhaps the way it will be. Technology makes it easier – people can get a lot done between a laptop and a phone and increasingly just one of the two. But even in jobs where one can’t work from a distance, the relationship between employers and employees will likely be one of flexible project-based work. Take healthcare – many nurses, doctors, and technicians work in a number of different clinics and hospitals. Some nurses work as flight attendants between the time they spend in hospitals in separate cities.

The emerging model of work has a lot of advantages for employers and employees. For one, it relieves employers of the need to provide employees with a career path – something very few employers are good at. For employees, accepting this reality will (hopefully) mean that they plan their careers around what they are best at, instead of around employers. And maybe we’ll finally stop hearing nonsense like “employees are our greatest asset”.

Views: 282

Comment by Fran Hogan on November 6, 2009 at 9:59am
Rahgav, This is one of the most thought provoking posts I've ever read on this site. I am fascinated at your views on the changing landscape of the way we work and love the examples you provide to demonstrate your points.

There are many take-aways from this. I believe you have correctly predicted the future of how most of us will earn our daily bread and your perception of the emerging model of work. The definition of having a job will change. Shaped by a failed economy and flawed employment model.

Thank you for sharing your insights &: knowledge.
Comment by Todd Kmiec on November 6, 2009 at 11:44am
I agree. Even though my children may not run their own companies, I try to teach them to have an entreprenuerial mindset. Make themselves valuable and focus on what they are getting done and can accomplish. Employees need to continually make themselves valuable. We have clients these days making permanent hires with the focus on the next project and the plan is to incorporate those valuable employees in the next project as well, but it is up in the air how that will develop. It is an evolving thing, the relationship between employers and employees.
Comment by Tom Janz on November 6, 2009 at 12:40pm
Interesting, engaging, and thought provoking as always. However, before we become too wrapt up in the Hollywood model, we should examine the genie curve in that industry. Over 95% of the participants in the 'acting' community earn less than $200 a year. Less than 1% earn the big bucks. It's what unregulated perfect competition in an over-subscribed market does. It's not a pretty site.

At the other end of the spectrum is the Power companies. Average tenure=35 years. It doesn't matter if it is Southern California Edison or Ontario Hydro. Not healthy either. Informed leadership in that sector is busy trying to decrease retention.

I remember the early years of this century when dreaming of Dilbert's world lost its luster in that recession. If we are all going to work for ourselves, we are all going to have to get a lot better at being prepared for income instability, gaps in the availability of work, and and handling the frustration and friction costs in constantly sourcing new work opportunities.

I just can't imagine that infinite projectization of work leads to an engaged, highly productive, and competitive society. There is much duplication of effort, a surplus of stress, and huge human asset inefficiencies that can be quantified by the mathematically proven human performance utility equation. The financial utililty of investing in valid predictors of future performance to select the best candidate from those that apply is a direct multiplicative function of average tenure. Perpetual musical chairs would waste trillions of dollars of lost profitability. (We have to say trillions these days to get attention, and it would be that over a decade)

We would do well to remember that the Chinese have had a language and culture for 5000 years. They started assessment centers as a process for hiring civil servants long before we started shooting each other with guns. Maybe they were on to something.


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