What's happening to our workforce?

I recently started to tidy up a very neglected part of my business library at home and picked up Charles Handy’s ‘The Age of Unreason’, first published in 1989. Handy is always a great read and as I started to thumb through the somewhat browning pages I came to appreciate just how accurate his projections back in 1989 had been in respect of the transformation now taking place in our workplace.

We are all very concerned about the recession and its impacts on our businesses and jobs but if you take a look at the early 80’s we saw some pretty significant changes taking place. In the three years from 1982-5 General Electric in the USA reduced its total workforce from 400,000 to 100,000 and somewhat surprisingly its turnover actually increased! Between 1979 and 1987 more than a million managers and staff professionals had lost their jobs in the USA alone! The model of a single status organisation where the cleaners were in principle treated equally to the company directors had been broken to avoid a lot of companies going bankrupt.

A trend set in for all non-essential work that could be contracted to be moved to people who made a speciality of it and who could do the work more cost effectively. Manufacturing companies transformed into assembly lines and service industries adopted a broker based model, essentially providing the glue between suppliers and clients. At the time some companies calculated that up to 80% of their products and services could be successfully contracted out.

All companies also go through cycles of activity from relative quiet patches to times where everything needs to be running flat out to keep pace with client demand. It’s not economically sensible to resource a business to meet the peaks and daft to set resource levels to just cover the troughs and many companies have to use temporary staff to fulfil demand.

Handy neatly classified these three types of workers as:

· Core

· Contractual Fringe

· Flexible Labour Force

The Core workers form the DNA of a business; they give it a strategy, mode of operation and personality. Employees here closely associate with the company and expect career paths and reward arrangements that reflect both their contribution and the company’s success.

The Contractual Fringe comprises a number of businesses that provide products or services on behalf of the company. They typically enter into a services contract with the company to deliver to a schedule and defined standard. The company essentially acts as a broker to the client for their products and services.

Throughout the business cycle peaks and troughs are addressed by temporary workers in much the same way as Amazon bring in additional workers to cover its seasonal peaks in business. They work to clearly defined expectations and usually under direct supervision. This change was most evident in Japan after the post war boom. Labour laws made redundancy very difficult hence companies elected to cease recruitment and switched to temporary workers to rebalance their workforce. These temporary workers now make up around 30% of all Japanese work positions and the trend continues to grow.

Handy also identified a fourth classification relating to self-service. By offering clients a way to service their own needs you can also offer the option of taking on this service for them. This can also be a great way to show a client just how much value add is being delivered!

I guess Handy could not have foretold that the 90’s would be a decade of boom with easily available credit and few pressures on organizations to embrace the kind of change he envisaged. Many organisations seemed to buck the trend and continued to add people and build larger showcase offices and headquarters.

However, a lot of money during this period found its way into R&D as companies looked to differentiate their products and services from competitors. Advanced video and associated mobility solutions rapidly evolved and high capacity bandwidth became available at cost effective prices. The fact that it was incredibly hard to sell all this technology (who wants a video system if you can fly out to the Bahamas for a meeting!) didn’t really matter as long as it provided marketing headlines.

When the global recession hit last year it fundamentally changed the way companies thought about their workforces and approach to IT. Resource costs became centre stage and all companies started to reduce the size of their core teams, partly encouraged by similar actions from their competitors. They also started to look at very different ways for their people to work, including part-time and on a contracted basis.

Advanced video solutions became centre stage, the technology had significantly matured and companies were desperate to reduce travel costs. This mass adoption will pave the way for a transformation in the workplace as connectivity starts to extend from intra to inter-company and drives a new federated model of company organisation.

If I were Charles Handy I would seriously consider updating and re-releasing ‘The Age of Unreason’, we are about to see the rapid evolution of the’ Shamrock’ organisation.