Thursday, November 5, 2009

Game over for job seekers?

As the country begins to pulls itself out of this economic abyss, one sign is not so encouraging for our future: Jobs. Housing is moving in the right direction and stocks are booming (is that such a good thing?), yet the job numbers continue to lag. Unemployment continues to rise -- albeit at a slower pace -- and there does not seem to be an end in sight.

Pundits across the tube are "pundificating" why people are still out of work. On one side, some say it's because President Obama's stimulus bill is a failure. On the other, they claim the economy was in such a dire condition that it will take longer than anticipated to get this train back on track.

The answer, I think, is much simpler. Employers are learning they don't need the same workforce to make their companies profitable. They are asking their current employees to perform more work than before to replace their laid off colleagues. The problem, though, is that the quality of the product ultimately falls. Take one look at most newspapers today, and you can easily see that the pages are thinner and filled with more wire stories. The reason? They don't have enough people to perform the job adequately.

Now, this is fine during economic hardship. But is that still acceptable when the economy improves? It will be interesting to see whether companies keep their current workforce or expand when their coffers bleed black once again. Sadly, I'm skeptical if most companies will ever go back to the dark days when offices were buzzing with plenty of workers.


  1. You raise some interesting questions here Mike. It seems so many businesses today, including newspapers, are stuck with managers who badly needs to adapt to rapidly changing economics. I think jobs will turn up when they either get on or off that train.

  2. It's about making money, not producing a quality product.

  3. Mike, I've been saying for several months the same thing, "When things pick up, all those old jobs will not be filled." I think some proof of this comes from a report issued earlier this week that spoke about productivity. The statistics have demonstrated greater worker productivity in the last quarter. I think the previous quarter said the same thing.

    The earnings reports are looking good from businesses. This is true, not from so much increase in sales, but rather a decrease in expenses. The decrease in expenses is directly related to the work force needed to provide the service, or produce the product.

    I think that present trends on economic recovery, specifically related to employment, will be unlike previous cycles. Companies have learned how to do more with less (employees), hence less expense. Thinking the businesses are merely going to refill positions left open during layoffs is wrong. Top management will be looking for different ways to make the same things happen, but with less expense. The crisis has sparked innovation with regard to staffing.

    What does this say about the present crisis? It may speak poorly for employment opportunities. Or, it may speak volumes about bad management in the past, using more expenses than needed. I think the latter.

    How will the employment trends change? I read a piece a few days ago that debunked small business as the key to growth. To be sure, most employees are part of small business. But, in deeper study, the statistics showed those companies most likely to do significant hiring are those less than five years old. In other words, age of the company was more important than the size of the company. I think this was a piece in the WSJ.

    I know, I know, all this doesn't get you meaningful employment. Keep truckin'.

  4. One more following thought to my last post ...

    Since business entities have learned how to get along with less, how about government following? I know some of the recent cuts in government budgets have caused an outcry. But, the pattern over the past few decades in government workforce is to add, add, and add more workers. Government is slow to find ways to make the operations more streamlined. Perhaps some of the recent cuts will force officials to think differently about how to run their operations.

    Maybe I'm just dreaming.

  5. I distinctly remember the same thing happening after the 2001 recession... that is, "Efficiency" increased so that when the economy started adding jobs, they were "new" jobs... not a refilling of old jobs lost. Just speculation, but it would appear that this cyclical tightening of the workforce causes workers in older industries to be pinched and overworked, while workers who come into the workforce on an upswing get a cushier gig, but are then more at risk when the next recession hits.

  6. Just ask the current reporters and copy editors at the O-R what they think about increased efficiency. Although companies are doing more with less, they are burning out their current workforce. As they overburden their workers, the product quality diminishes and the employees become more and more bitter. At least, that's what I think.

    Thanks for chiming in, Roger and E.

  7. That brings up a side point, Mike... Some would make an argument that when it's time for an industry to die out, no amount of good decision making will save it. You could be the most evolved, complex, intelligent predator on earth, and still get hit with an asteroid.

    It is possible that there is no "answer" to the demise of the newspaper industry. One firm may cut staff and reprint wire content and go out of business. Another firm might invest in writers, charge for their website, hypertarget their advertising and still go out of business. It may be that the world is going to be without the traditional newspaper in a generation regardless of what decisions are made... just by virtue of the world moving into a post-newspaper position.

    Remember, Nokia was founded as a Finnish lumber mill in the 19th century... Nintendo was founded in Japan to print playing cards. In 50 years, the New York Times may very well exist... but there's a good chance they won't be printing newspapers.

  8. And the sad truth is managers naturally choose to keep their friends and not necessarily the people who do the quality work. Who hasn't seen that movie?