| July/August
2004
Has
staffing grown too complex?
WHY
THERE’S SOMETHING TO BE SAID FOR PLAIN OLD EMPLOYEES
EMPLOYERS
THESE DAYS have a smörgåsbord of options when it
comes to staffing their organizations. On a given day, a company’s
payroll may directly or indirectly cover full-time employees,
part-time employees, temporary workers, independent contractors,
consultants, leased employees, outsourced business functions,
“offshored” workforces, telecommuters and more.
It’s the 21st century, and it’s the Age of Whatever
when it comes to building an organizational matrix created
just for you.
In fact,
management guru Tom Peters sees a future filled with contingent
workers who hook up with providers of jobs as demand arises
and who disappear when mutual attraction fades. No one is
committed to anyone else, except as may be required by law.
Maximum flexibility rules.
It all
sounds fantastic, or does it?
Exchange
Rates Vary Among Employees
“Fungibility”
is an economist’s term for the exchangeability of one
item for another of like kind – as in a unit of currency
or a 10-lb. bag of grain. Some things are fungible, while
others are not. For example, Leonardo’s Mona Lisa, considered
priceless by virtually all art connoisseurs, cannot easily
be exchanged for any old painting of similar medium and size.
Turning
to the subject at hand, one can ask whether workers of a given
kind are fungible or not. As a general rule, the less a job
requires independent thought or advanced training, and the
more transitory or seasonal its nature is, the greater the
odds are that job candidates are fungible. Furniture stores
going out of business, country clubs holding major golf tournaments
and factories gearing up for holiday shipping have one thing
in common: they basically need “extra bodies”
to fill in.
At the
opposite end of the spectrum are those jobs where factors
such as intelligence, specific knowledge and skills, leadership
and decision-making ability play a vital role in the success
or failure of the position’s incumbent. The task here,
in the words of Sanford Rose Associates’ registered
trademark, is “finding people who make a difference.”
Such individuals are far less fungible.
As one
wag recently said, “You know it’s time to get
another job when your CEO is outsourced.”
Out
of Sight, Out of Control?
In between
the chief executive of General Motors and the extra counter
help at a greeting card store during Christmas are a range
of positions whose fungibility is debatable.
There
is absolutely no debate, though, that a large class of college-educated
individuals exists in Bangalore and other Indian cities, many
of whom are delighted to find work for approximately one-third
the wages of their counterparts in the United States and elsewhere.
A growing number are taking jobs in outsourced operations
such as call centers, computer programming and software design.
To date,
according to most reports, the results have been mixed. Repetitive,
skill-based work requiring a minimum of interpretation or
decision-making has tended to produce favorable outcomes.
Conversely, in jobs where personal creativity, independent
judgment, specific knowledge of a company’s customers
and similar factors influence the quality of the outcome,
distant operations have fared less well. Geographic distance,
time-zone differentials, language subtleties and cultural
factors simply cloud the picture (no offense intended). Imagine
a call center in a country where saving face is highly important;
how does one convince workers to apologize to irate callers?
Sirens
Singing May Mean Shoals Ahead
Companies
consider contingent workers, leased employees and outsourced
business processes for a variety of financial and legal reasons,
including:
The
desire to run lean and mean. If the need is
truly temporary, seasonal or project-based, why not use temps
and contractors to lighten the load and get the job done?
The
need to stay competitive. If the choice is between
manufacturing the product in China or going out of business
due to staggering labor costs, the decision seems obvious
– but are you prepared for long-distance management,
quality assurance and security issues? What other options
may exist that give you greater control – including
reducing costs at home?
The
ability to shift financial and regulatory obligations to third-party
providers. “Let the staffing firm worry
about it” has been a familiar refrain, at least in the
U.S., when it comes to pension and benefit obligations, tax
compliance, immigration requirements and the like. Recently,
however, the legal trend has been toward holding employers
equally responsible if staffing firms or subcontractors break
the law – as in the current charges against retail giant
Wal-Mart for letting a janitorial service employ illegal aliens.
Labor
union avoidance. Some employers have tried to
reduce their exposure to union organizing campaigns by using
a mix of perms and temps in the most vulnerable jobs. But,
in a reversal of previous policy, a fairly new ruling by the
U.S. National Labor Relations Board (in M. B. Sturgis Inc.)
allows the inclusion of temporary workers in the same bargaining
unit with regular workers.
“Sticking
to our knitting.” The Sirens sing sweetly
to the CEO of core competencies and sticking to one’s
knitting. “You’re in the business of making widgets,”
they croon, “not running a mailroom or company cafeteria.”
No argument here, until we move along to Human Resources,
MIS, Accounting and Control, Corporate Communications, Purchasing
or any other department comprising the back office –
none of which makes widgets, either. Just how much of the
corporation’s backbone is it truly prudent to sell to
someone else?
Hired
Guns vs. Loyal Employees
In centuries
past, when people gathered around fires at night, village
and tribal elders passed along the stories and legends that
comprised one’s history, continuity and values. In today’s
corporation, history and values walk out the door each night.
If they return in the morning, there’s continuity. If
they don’t, the corporation loses its identity.
Every
great company consists of great employees, so the wholesale
elimination of one’s most valuable resource ought to
be a frightening trend. Certainly employees are frightened,
viz. the current political campaign commercial: “Not
only did I lose my job, but I was told I had to train my overseas
replacement.” In the May 2004 Sanford Rose Associates
web poll, over three out of five respondents said they feel
less secure in their jobs today than they did a year ago.
That’s not a good omen for employee retention in an
improving economy.
Tom Peters
and others extol the virtues of a future in which growing
numbers of hired guns decide which days they want to work,
for whom they want to work and for how long. Excu-u-use us,
but that’s pure hokum. People want to belong, to achieve
recognition within their peer groups, to be rewarded for their
performance and to believe they can retire some day with enough
peace of mind to enjoy life. There have been independent contractors
and consultants for decades, and virtually all leap at any
genuine opportunity for employment.
As companies
struggle with how to achieve optimum flexibility in their
workforces, one small piece of sound advice is not to throw
out the babies with the bathwater.
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