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New Workplace Rules: The emerging era of the Free-Agent

According to John Challenger [Workplace Rules in the New Millennium -- World Future Society Conference, 2001], there are major changes afoot in the workplace and companies need to update their "HR Rul...


February 1, 2002
By Pulp & Paper Canada

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According to John Challenger [Workplace Rules in the New Millennium — World Future Society Conference, 2001], there are major changes afoot in the workplace and companies need to update their “HR Rulebook”. The principles they use to make decisions about the size and makeup of their workforce are now radically different from even a decade ago. Lifetime employment, company loyalty and corporate roots

have become oxymorons. The forces driving this change lie in globalization, technology and automation, diversity, deregulation, shareholder activism and mergers and acquisitions.

A closer look at each of these driving factors:

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Globalization continues to promote the free flow of goods and services with consequences for severe workplace disruptions to previously protected businesses. However, some economists [Alan Rugman – The End of Globalization] have questioned the depth and reach of true globalization, pointing out that it is mostly confined to the triad regions [North America, Europe and Japan]. There is also the question of the post September 11 effects on the pace and character of this trend.

Technology and Automation has transformed business practices for both companies and individuals. Accelerated business and individualism will continue with cheap wireless bandwidth being a major factor.

Diversity and Anti-discrimination have matured from their 60s beginnings. It is ironic that the dominant social group — white males — can now expect to face discrimination themselves once they reach their 50s!

Deregulation of once protected industries has created new competition for telecoms, banking, energy and aerospace. We can expect other sectors to follow.

Shareholder activism has grown unchecked with more people investing and more corporate information being freely available. Expectations for high returns mean swift punishment for under-performing companies and CEOs.

M & As have seen a boom in the late 90s as a corporate fix for many of the above challenges. However, the track record of meeting the promises of M & As has been spotty. CEOs, who have pursued what turned out to be short-term gains in share price, have turned their companies into under-performers.

Based on these driving factors, a new set of rules is evolving for a rapidly changing workplace environment. The just-in-time principles for supply-chain management are now being adopted for employment. Flexible employment for on-demand skills is resulting in an increased use of temporaries, consultants and contractors; a segment of the blue-collar workforce is now “permanently temporary” and project-based. This situation has helped to drive an entrepreneurial boom, which in itself will give companies access to an expanding menu of creativity and innovation. More employees and free-lance individuals now view their careers in terms of what skills they can offer at any given time to satisfy a prevailing business (or social) need. This “worker free-agency” has spawned a membership explosion in professional associations and thriving Internet-based job and resume posting services. The free-agent is also highly mobile either in real or virtual time. Growth can be expected in Internet-based collaborative work environments.

What do new work rules mean in a downturn? Unemployment is usually a lagging indicator for the economy, so if we are about to enter a turn-around, then cut-backs and rising unemployment will continue for at least 6 months. The “tightness” of the supply-chain, especially in the highly volatile technology sector, also has a ripple effect. Hiring is now geared to upgrading the core talent base and there will be growing competition for those skills that are in demand. Corporate downsizing has unleashed armies of experienced entrepreneurs to drive the new small high-growth enterprises. Many of the Gen X and Y demographic [20-40 year olds] see free-agency as a preferred career choice.

Finally, it is possible that new monetary and fiscal tools have made the economy more resilient. We may be better able to weather economic storms because of free trade internationally, deregulation domestically and the dismantling of artificial constraints. [Challenger].

Why is this important?

Professional and trade skills will become a scarce commodity in the new “new economy.” It will also be highly mobile and, where applicable, be attuned to distance delivery of services. Knowledge and business will advance through new cooperative work models to replace old competitive models. Thus, distance teams and cooperative technology development will be the way to enhance performance and value. Furthermore the larger number of people with advanced education will drive knowledge expansion at an ever-increasing pace. Wisdom and experience will also be valued as much as youth and energy, with an increased involvement of the 60+ demographic in the work force. “The new meritocracy of the educated elite is replacing the Establishment that ruled the US through much of the 20th century” — John Challenger.

Alan R. Procter can be reached at futureviews@alanprocter.com. For more information, visit www.futureviews.net