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. It is not too hard to see that these are 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, unable to find job applicants with a like-for-like match to their job description lamented the skills shortage, while perfectly, but differently, qualified candidates were overlooked.

As work conditions changed, the employment system became more difficult to maintain. It has been propped up with tools that makes 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 be 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 a short-term mentality.

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 unempowered, 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:

1. Making it easier for people to work as 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.

2. Human resources must become qualified (currently there is no minimum qualification) and that qualification must include business, finance or economics. The role – and if HR do not want to change then another profession will take over – must be more than 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 the HR respondents believed interpersonal communication skills was academically valuable to their careers, and only 2% of respondents believed the same of skills in finance.

3. 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.

4. 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.

5. Imagine if employee work histories were as transferable as results between educational institutions. Sure, this information will not be perfect and 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.




By: Isabel Wu