A while ago I spent an inordinate amount of time working with the Armed Forces and some of our larger manufacturers and the public/private sector partnerships that were set up to help deal with change and restructuring. “Options for Change” &” Front Line First” come to mind for HM’s Armed Forces and TAP’s (Transition Assistance Programme for the US and NATO forces.
We worked also with various Development Corporations looking after geographic areas that were being decimated by changes in petro-chemicals, coal, steel, shipbuilding, automotive and other manufacturing and engineering environments – Teesside, Black Country, Corby, Runcorn etc.
For many of the people with whom we were working the issues included anger and a sense of injustice in addition to their practical concerns about ever working again. A perspective that I tried to get over to help deal with this was that change had always been endemic in employment – whether the move was from rural living built around agriculture to town dwellers working in factories. The fact was that change had come and that, once started, it was unstoppable. Neither the Tolpuddle Martyrs nor the Luddites could do more than hinder change once momentum had begun to build.
The job killers were often technology and investment that produced changes in the market by changing expectations and reacting to (aka exploiting) aspirations. In many situations the job market in an area or a sector was driven by development phases – the planning stage, the design stage, the building phase and then operation and exploitation. I used the Channel Tunnel as one of my examples with employment on the tunnel going from a couple of guys with big shovels through installing track, HVAC and power, building trains and then ending up with jobs for drivers and ticket collectors leaving the tunnellers with a stark choice – find the next big hole to dig or retrain to punch tickets or do what every boy had wanted to do - drive a train!
Change was fine with some groups when it affected only manual trades and nationalised industries - “just a product of the market and these people must move on or fall by the wayside”. But in true NIMBY fashion there was much wailing and gnashing of teeth when technology pushed change into the orbit of the middle class and professionals.
It is not so long ago, on the strength of their manufacturing industries, some Japanese businessmen expected the US to be reduced to the status of their supplier of basic materials and Europe their boutique but that was put in perspective when the unrealistic value of the Yen placed a value on the gardens of the Emperor’s Palace as greater than the value of California (or some such nonsense). Now, of course, manufacturing Japan is like the rest of us - looking over its shoulder at India and China and ‘jobs for life’ has become a chimera.
We wrote recently about the perfect storm in 2007 – a buoyant economy in the west especially in high-tech projects like the CVF creating skill shortages (or rather demonstrating, in sharp relief, skills shortages that are already with us) coupled with a requirement for Western management skills in China and India doing for the talent market what growth in the economies of those two countries did for the price and availability of steel, oil and basic materials in 2006.
There are some of us who believe that the changes in, for example, the automotive sector mirror what will happen in the West or rather the old EU and US manufacturing west. We lose Ryton in Rugby as jobs move to Slovakia but see the F1 industry take hold in Northamptonshire. Similarly we hear of high-tech design centres coming to Britain serving manufacturing plants that are either outsourced, as in Nike and elsewhere - or that look after in-house factories that follow the grants and relocate to wherever value for skill is found. One of the young men interviewed in Slovakia about the plethora of new jobs being brought by the automotive sector was quite relaxed as he said: “We know the car industry. These jobs might not last but when they move on we will learn new skills”.
In the days I was talking about earlier we had lots men and women who had done 20 or 30 years or more in what had seemed secure jobs, often following their fathers into plants with companies that had deliberately created a kind of ‘warm soup’ employment environment in order to maintain stability. When change came that past made it more difficult to accept - but what really made things difficult was, in part, the velocity of change.
The rate of change has now moved on exponentially. Not only that, the internet and broadband has pushed the concept of ‘added value’ to limits so that processes in services and logistics can now be redesigned along the same lines as productions lines were designed in manufacturing.
Today, a surgeon in one hospital in country “a” can work over the web with a surgeon in country “b” to treat a patient in country “c”. Even a traditional business like recruitment is now an assembly process run over the web. The possibilities arising from such capabilities across the board are staggering in their impact and people will need help if we are to take advantage of the potential and avoid the traditional response of resistance and reluctance.
I think we need a much more proactive approach from government and commerce to the introduction and management of change. People are increasingly alienated and are close to believing that most change is detrimental to their interests. The EU lost the argument over the constitution and we are close to believing that government no longer works, let alone works in our interest. This is important because of two influences – both often suffering from too much heat and not enough light – immigration and outsourcing of jobs.
If we want a continuous improvement to our standard of living In this way it is inevitable that industries that remain labour dependant will make value for skill ever more important in the context of more and more sectors and areas of the economy from health to good government. One day soon we will elect not politicians but on the basis of “competence”. When that happens more areas of government process will be outsourced to give best value for the tax payer. What rows there will be to begin with! But there will come a time when it will happen without comment.
Another area of interest in terms of change is our perceptions of jobs and employers. In many cases, as we have seen and reported many times in 2006, businesses have been transformed utterly by new management and investment. However, the perceptions of that transformation have not yet impinged on the perceptions of potential employees. There is evidence that the cultural memories of past problems and the way that they were dealt with will linger on unless and until a positive programme is initiated to change attitudes.
Shena Parthab, Managing Partner of Head Hunters Euronet Search was telling us that: “Not only is the target list of 100 or more now the norm, the task is only just beginning when you have found the right people. In many cases we then have to convince them their perceptions of the employer are out of date and that the business has moved on”.
The other influence that we expect to see impact on jobs in 2007, perhaps negatively, concerns investment. It is estimated that one in 4 of the leveraged buyouts that took place recently was not based on the old ratio of 4 times earnings but of 7 times earnings. Some European companies have been left with debt levels that haven't been seen since the days of Michael Milken, the U.S. pioneer of high-yield, high- risk finance. Consequently it appears to be the accepted view that many of these investments, that by traditional standards look excessively risky, will in fact fail. That may, in City terms, throw up some bargains but in terms of employment and the job market the usual effect is loss of jobs. Pension funds may also be affected, adding to the general uncertainty.
Finally the mechanisms by which the job market works are changing with technology as is the commercial model on which recruitment is sold and agencies operate. Agencies will get lighter, faster and quicker and will be required to add more value whilst charging less. The relationship between agency and client may change – most of us hope it will change given that recruitment is held at about the same levels of regard in the public mind as reporters, MP’s and estate agents. (I have a son who is MD of an Estate Agency but tell him that I tell my friends that he plays the piano in a whore house to save the family embarrassment! To which he replies “But Dad aren’t you a journalist?!”)
The point being that we are fast reaching that time that I have predicated many times when every CV and every job is on the web somewhere. At that time how recruitment earns its crust will have to change and I doubt that people will invest their time unless there is a reciprocal commitment from the other end. The result may be that agencies could become more useful and their work more greatly valued providing they do more to provide a really useful, distinctive service that brings people and jobs together with more accuracy, purpose and greater efficiency in ways that are only possible with more investment of time and a bigger commitment of resources that must be intelligently applied
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Views >> MunibT@thecafe.gg