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5 Reasons Why Traditional Employment Is in Trouble

by
Kevin Wheeler
May 9, 2012, 7:07 am ET

According to the U.S. Labor Department, 2.1 million people resigned their jobs in February, the most in any month since the start of the Great Recession.

This is startling given that the economy is not strong and that millions are out of work. The natural inclination would seem to me to be to hunker down and hang on to the job you have, no matter how bad it is. That is what happened in previous recessions. Yet these were disgruntled, unsatisfied, and unfulfilled people who voluntarily, many without other positions or jobs lined up, chose to leave.

In discussions with some of them, I heard talk about feeling they having been used to bolster executive salaries and inflate shareholder expectations unrealistically. Many felt unappreciated and disrespected — a word I hear a lot now and never used to hear at all.

And with eroding benefits and the potential of better access to health care, the hold that corporations used to have is loosening.

I think we are seeing the early signs that the attitudes and expectations of the emerging and experienced workforce are changing faster than many thought likely and that traditional firms may find it harder and harder to employ the best people.

I among others have been predicting that the age of the entrepreneur is dawning — a time when more and more people are confident and optimistic about working for themselves, offering their services for a fee to someone who needs their skills. Many of the ones I speak with are convinced that this is a better way to feel fulfilled and be prosperous than the daily grind of going to work for an employer.

The success of crowdsourcing sites like Amazon’s Mechanical Turk and other sites where anyone can offer their services for bid such as elancer or freelancer say a lot about what is happening. It has become relatively easy to offer products for sale on sites such as eBay or Craig’s List or to find a match between your skills and the needs of someone else.

But many corporations and recruiters are in denial. They will not agree that a significant number of people feel this way but at the same time they will not deny that it is hard to find, attract, close, and retain the skilled talent they need. And as Baby Boomers start to retire and move out of the active job market the gap will grow.

It does not take a crystal ball to see the signs of change.

Expectations Have Changed

People expect work to be engaging, interesting, and fulfilling. Younger people even feel it should be fun. The organizations that offer project-type work, work that poses a challenge, or work that fulfills humanitarian needs, are not having much trouble finding good people. Gen Y, those in their 20s, have been the pioneers in changing attitudes and in showing that individuals can find work that is fulfilling and earns money — often by working independently or by joining a very small firm or startup.

Choice, Not Control

People want to be empowered to make decisions, to be free from bureaucracy and administrivia. They know they have a lot to contribute and are frustrated when seemingly meaningless rules and procedures are put into place with no consultation or discussion.

Firms like Brazil’s Semco are run as democracies, and employees have the power to decide almost everything. For the past few decades this, along with Gore-Tex in the U.S., have been storybook examples of how organizations may look as we move into this century. The hallmarks for success include participation in decision-making, freedom over schedules and work assignments, and fair, transparent, and equitable pay based on contribution.

A Focus on Employment Branding

But, in lieu of making these painful changes to structure and existing practice, firms are instead focused on using the power of advertising and image-shaping to enhance or create an employment brand in the hope of attracting people.

Most employment branding efforts use Madison Avenue-style tactics to raise interest in a company. The campaigns are expensive and require immense effort, but there may be a period of time when more good people are attracted to a firm. The downside is that once hired they may quickly move on if the hype is not reflected in practice.

Semco, on the other hand, has no trouble attracting great people primarily through referral, word-of-mouth, and by the quality of the products and services they offer. Historically, very few firms have had to resort to expensive branding campaigns to attract the people they needed. Talented people with the right skills sought out the firms. This is why the employment market has always been skewed toward the employer who has been able to set salaries, offer the benefits it wanted to offer, and carve out jobs with minimal regard to the candidate’s or employee’s needs or desires.

Firms such as Lincoln Electric, Gore-Tex, IBM, and recently Facebook have little need to do overt employment branding because their employees do the recruiting for them.

More Interest in the Candidate Experience

Also, almost in acknowledgement that they have not done a good job in providing a candidate with a positive experience — with good customer service — when they apply for a job, there is now more emphasis and interest in improving that experience.

Gerry Crispin of CareerXroads has long been an advocate for improving the candidate experience and has tirelessly worked to get firms to make substantial changes in how they deal with a candidate. Recently he has created the the Candidate Experience Awards to further enhance this effort.

But it is unfortunate that he has to do this. It is simply another sign that the tide has turned away from traditional employers to the smaller firms that do care about the candidates and do listen to them and offer decent service.

More Effort and Money Being Placed on Becoming Listed as “The Best Place to Work”

Many firms spend thousands of dollars in fees and salaries to compete for a Best Place to Work award. Many have full-time employees dedicated to this effort for a significant time period while also ramping up employment branding activities.

Again, this is only viable because there is not enough natural interest in these firms to attract good people.

As traditional organizations try to fit round pegs into square holes, the smaller startups and enlightened larger firms are finding it easier to hire good people.

Good people are attracted to places that are in alignment with their needs, attitudes, and intellect, and those places are increasingly organizations that are flexible, fun, empowering, respectful, transparent, and flat. But the dinosaurs didn’t evolve successfully and I doubt that larger firms will either.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Jordan Clark

    Great read Kevin, and I completely agree, I think this part of your article says it all “In discussions with some of them, I heard talk about feeling they having been used to bolster executive salaries and inflate shareholder expectations unrealistically. Many felt unappreciated and disrespected — a word I hear a lot now and never used to hear at all.”

    Frankly I think its about time, for to long now we have seen CEO’s and global executives lining their pockets like John. F. Fick the CEO of Mary Washington’s Hospital that gave himself a pat on the back for “cutting costs” when he chose not to fill open positions and understaff the hospital, and instead used that money to reward himself with a 3 million dollar bonus.

    People are tired of the hypocrisy, the “do as I say not as I do” attitude and after all the scandals, what you are really starting to see is a loss of faith in companies, and more importantly their leadership, and rightly so. People are starting to realize they have to look out for themsleves, because CEO John Smith and the Board of Directors are doing just that and have been for a while.

    I think the exec’s had better start reading the writing on the wall, because unless you own your own business its hard to be a CEO of 1!

  2. Steven Rothberg

    Hopefully employers will start to view resources such as Mechanical Turk as being efficient, effective channels for finding talent for short-term, well defined projects. Right now, I believe most employers use these resources primarily to find the cheapest possible labor. In that respect, many of these employers are no different than those who operate sweat shops.

  3. Miguel Corona, D.M.

    Great thoughts. I think one of your key ideas here is “choices.” Indeed, technology has eliminated many of the barriers that have stood in the way of many small business entrepreneurs. Small is not only the new “big” – but the future.

  4. Jerry Miller

    Kevin, great post. I believe there is a huge generational component to this shift. And if companies don’t recognize it they will pay the price in the long run. “Work” is evolving from just a job to more of a way of life for upcoming generations.

  5. Keith Halperin

    Thanks Kevin. I think that the idea that: “People expect work to be engaging, interesting, and fulfilling. Younger people even feel it should be fun.” is middle-class Boomer- and-later expectation, and for a large portion of the working-age population a dream as opposed to reality. Dreams typically end when people wake up, and I think wake-up time is coming… As Ronald Reagan said: “It’s morning in America”.

    I also believe that barring some unforeseen positive developments (always a possibility) we’re headed for an American version of Japan’s “Lost Decade” with continuing *high un/der employment and slow economic growth. I also expect we will be come **increasingly stratified with a shrinking middle class who have decent-well benefited jobs, and a growing group of people who don’t, and not through their own choice. We may become like ***Spain.

    @ Jordan: I agree with you. Organizational loyalty is a quaint, and outmoded concept, and unless you have a long-term employment contract, you’re expendable and should keep one eye on your back and the other eye on the way out. At the same time, I don’t think folks like James Fick need to worry about becoming “CEOs of 1” anytime soon, though.

    -kh

    *http://www.newyorker.com/talk/financial/2012/04/30/120430ta_talk_surowiecki#ixzz1uOCQz9jq
    We are stuck with an unemployment rate three points higher than the postwar average, and the percentage of working adult Americans is as low as it’s been in almost thirty years. What’s most troubling is that so much of this unemployment is long-term. Forty per cent of the unemployed have been without a job for six months or more—a much higher rate than in any recession since the Second World War—and the average length of unemployment is about forty weeks, a number that has changed very little since 2010. The economic recovery has now lasted nearly three years, but for millions of Americans it hasn’t yet begun.

    **http://www.newyorker.com/arts/critics/atlarge/2012/04/23/120423crat_atlarge_lemann#ixzz1uO9OnsAI
    The most striking change in American society in the past generation—roughly since Ronald Reagan was elected President—has been the increase in the inequality of income and wealth. Timothy Noah’s “The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It” (Bloomsbury), a good general guide to the subject, tells us that in 1979 members of the much discussed “one per cent” got nine per cent of all personal income. Now they get a quarter of it. The gains have increased the farther up you go. The top tenth of one per cent get about ten per cent of income, and the top hundredth of one per cent about five per cent. While the Great Recession was felt most severely by those at the bottom, the recovery has hardly benefitted them. In 2010, ninety-three per cent of the year’s gains went to the top one per cent.

    ***http://www.economist.com/node/14006703
    Two-tier flexibility
    How the burden of adjustment in Spain falls on the underprivileged
    This two-tier labour market divides workers into a privileged group cocooned from the reality of recession and the disadvantaged on temporary contracts, in unemployment or in illegal jobs. Employers do not invest in training short-term workers and are wary of hiring on permanent contracts. At any hint of a slowdown they shed the short-timers.

  6. Kathryn Heltsley

    Interesting post Kevin, thank you.

    In the media you hear over and over about the plight of the job seeker and the desperate times – which I can attest to, having recently survived a looooong period of unemployment after being laid off. While I was job hunting I also built and maintained a freelance business, but was perfectly happy to rejoin an organization when the right position came up.

    I was continuously surprised to hear about friends of mine who were in “good” jobs who chose to leave them to work for themselves. Your post is a more accurate reflection of what I have seen happening than the perspective still being highlighted in the media of people so desperate that they will take anything. We are an empowered population and companies need to take note that just because times are hard, people aren’t going to settle for being poorly treated.

  7. Brian Kevin Johnston

    Good article, and I agree our industry is in denial about changes… TOP Recruiters will still be needed to find TOP talent… They (candidates) can call themselves what they want… The matchmaker (agent) will still be needed to influence/persuade others to do A,B, or C, and Accomplish X,Y, and Z…

  8. Jordan Clark

    @Brian: Isn’t the top talent really in its own category? Most “Top” talent candidates don’t necisarrily even have to apply to positions, let alone have to search for one, and are often poached or contacted without ever having to make the initial connection or application.

    I think the change we are seeing is more the average/mid-level/entry-level candidates that are despite the time they have to take to find another position more willing to expend that time and leave what can be categorized as a “stable/good” job in efforts to find something more suitable or meaningful.

    Really if you look at it, the shift is headed that all recruiters (should the parallel continue in the sense that this becomes the norm and the economy adjusts for it) will have to be TOP recruiters, or that more candidates are looking to be treated in a similar fashion as those “TOP” talent candidates.

  9. Pulling Back the Curtain |

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  10. Keith Halperin

    @ Jordan. Well said. If you aren’t in the “Fabulous 5%” or have some in-demand skill, don’t expect recruiters to come knocking on your door….
    BTW, does anyone have this stat: what percentage of the American working population has been:
    1) originally contacted by, or
    2) hired through
    a contingency or internal recruiter who reached out to them (as opposed to handling their application)?

    Cheers,

    Keith

  11. Mark Hornung

    Kevin, as always, makes some excellent points. Wharton just published an article that supports much of what Kevin describes, i.e., that employee loyalty is declining because workers don’t see any loyalty in return (http://t.co/HDyzSusL).
    I would take exception, however, to the characterization of employer branding as “expensive.” (Full disclosure: I work for Bernard Hodes Group, a firm that creates such campaigns.)The examples Kevin cites all benefit from extensive corporate branding efforts – IBM and Gore-Tex through advertising, Facebook more from public relations (and – soon – investor relations). For the employer that has low name recognition or is trying to “live down” a previously negative reputation, employer branding isn’t expensive, it’s necessary.
    This is, in my opinion, one of the canards of the current discussion about employment, i.e., that all one has to do is thorough sourcing and the recruiting essentially takes care of itself. That is true unless the target of your recruiting hasn’t heard of you or – worse – thinks yours is a terrible place to work. Research has shown that employers that are relatively unknown or perceived negatively have up to six times the difficulty recruiting than those who benefit from high awareness and/or positive perception.
    Lastly, Kevin and Gerry Crispin are right-on about the candidate experience, which is an intrinsic part of the employer brand. More employers need to do much more to improve the candidate experience or pay the price in increased recruiting costs and turnover.

  12. Michelle Rocke

    Great article about changing times. Mark Hartung, is there anyway you could send me any links you have about the research about unknown or employers that are perceived negatively having six times the difficulty recruiting for their organizations? I am at mrocke@prototest.com. Thanks!

  13. Bill Fitzgerald

    I’d like to believe that this is a healthy evolution for everyone. The people who are in a position to gain the most from corporate success – senior leaders, board members, shareholders, will continue to make money while the people doing the work, will grow their skills and continue to find gainful employment. Loyalty unto itself really won’t matter so much. We’ll be more concerned with achieving success – individually and collectively. The conversation will shift to how everyone can win. Some of these individuals will eventually rise to the ranks where they get to cash in while others won’t. Either way, it can work for everyone.

  14. 5 Reasons Why Traditional Employment Is in Trouble | ere.net « PHIL BOWMAN

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  15. Stephen Booth

    From my own observations and conversations I’ve had with others the key nail in the coffin of traditional employment is the death of traditional, paternalistic even, people management. In the past 20-30 years employees have gone from being a valued resource to be developed and protected, coddled even, to being seen as an unfortunate necessity to be used and discarded as one would a tissue or the plastic spork that comes with your lunchtime packaged salad.

    When employers show zero loyalty to their staff, laying them off as soon as the economic conditions get the slightest bit rocky and driving down salaries and benefits which payhign themselves and the shareholders big bonuses, why the heck should empoyees show the smallest shred of loyalty to the employers?

  16. Los candidatos piensan que no necesitan a los reclutadores. Demostremos que están equivocados, en Reclutando.net

    [...] interesante artículo publicado en el blog de Ere titulado
 “5 razones por las que el trabajo tradicional está en apuros” plantea una serie de cuestiones sobre las que los reclutadores deberían estar preocupados. [...]

  17. Michael Bovaird

    Good article Kevin. I think empowering Managers to make decisions is so important – and something that is not employed by every company (most in fact). They prefer to create incredible structures of bureaucracy only to end up back at the same place (or worse) as they were before HR, procurement, legal, committees, sub-committees, steering committees, and about 10 others got involved.

    Regarding the change we are witnessing, I think the question is – who will get the last laugh? Employers need employees, but most people need strong, healthy companies to work for. I think we are definitely trending much more toward a “temp/contract” workforce. Guns for hire if you will. It certainly does creates less false expectations on both sides.

    One point I would like to bring up is the whole “work should be fun”. Hmmm….I think that’s great if it is…but for many people, it’s not fun – it’s just “ok” and necessary. To me, I have witnessed an evaporation of the work ethic in America. Between “tweeting”, “Liking”, “Surfing” and “Updating” – who has time for work? We need a strong, dedicated, hard working work force for all of us to succeed…..but in return, companies MUST empower employees to make decisions….and then not second guess their decisions.

  18. Shell B

    As a younger member of “Gen Y,” I see the trend for sure. This generation is facing the reality that getting a degree, doing all of the right things, and working hard aren’t going to get you a fancy, great job in a big corporation. We’re probably going to live at least a portion of our lives broke and not making enough money, and working our way up from the very bottom – even if we do have fancy degrees and skills. The state of the economy right now essentially controls our lives and our futures. So instead of spending years working our way up in a big corporation that doesn’t care about our needs and struggles, why not spend years working our way up in our own company (or a small, new company with ideals that match ours), with our own rules?

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