Shaping Labour Market Trends

The Reorganization of Firms and Institutions

"The transition to real time operation has begun to churn up huge creative chaos inside corporations" (McKenna, 1997, p. 133).

The ability to gather quickly large amounts of information on competitors and consumers allows companies to respond to market-driven or customer-driven demands. Increasing competition, information that could be outdated in the next hour and customers demanding immediate responses to product and service requests (customized to their needs) mean a major adjustment in company structure.

To meet the challenges effectively, many companies have adopted reorganizational strategies that include downsizing, restructuring, re-engineering, outsourcing, and merging or spinning off companies.

State-of-the-Art Information Technology Increases Productivity with No Lost Jobs Not all innovation in technology creates job loss. Some innovations increase productivity and protect jobs. The National Bank of Canada won a Canadian Information Productivity Award for its new information system that turbo-charged its ability to process cheques and other financial documents quickly and efficiently. The new computerized lockbox imaging at the National Bank identifies the account holder, the amount of the cheque and the company. It can process 24,000 documents an hour compared to 1,800 using the traditional method. Cheque encoding has risen to 24,000 per hour from 1,500. Two systems can process 50,000 payments whereas it previously took nine systems to process 25,000 payments. As the National Bank was setting up its new service, it won a major client and, as a result, no jobs were lost (CIPA, 1999).

As companies reorganize, specialized knowledge is distributed down from the few at the top to the many in the middle, and the shape of organizations changes to a flatter structure. Less hierarchical and less rule-bound corporate structures mean a major adjustment in how managers and workers function. A shift to a more team-based work environment with finite project-based outcomes is just one example. Many companies will hire and lay off based on the completion or cancellation of a project. As companies pare down to the core workers crucial for the company's market niche, outsourcing of complementary work that is not a core function becomes a viable restructuring option. This leads to more emphasis on recruitment and retention by company managers because hiring and keeping those core workers with the right knowledge and skills is critical to successful competition.

The Team-Based Workplace

In this economy "no one person possesses all of the knowledge required to make decisions" (Report of the Expert Panel of Skills, 2000, p. 33). With innovations in information technology allowing everyone on a team to access information, companies can now move to more team-based workplaces. Workers need to share their expertise for the successful outcomes of a project. Core employees will work on a team with outside consultants for one project and, at its completion, be assigned to a new project with a different set of consultants.

This new team-focussed environment is not amenable to middle managers who passed down orders and passed up information. When flattened, less rigid, less hierarchical companies do hire managers, they look for individuals who can act as part coach, part consultant and part boss, and demonstrate exceptional leadership. This, in turn, means managers have high expectations for their workers to be flexible and to possess the attitudes and behaviours necessary for working in teams.

Contracting Out

Another organizational strategy used to respond to competitive challenges is contracting out or outsourcing, where every job and function in a firm or institution is examined to see if it would make more sense to contract it out to some external company or individual. Tasks that have little to do with the primary business of the company are typically outsourced, usually at a lower cost than it would take the organization to do the job itself. This allows the firm or institution to focus on what it does best.

Outsourcing changes the terms of employment for workers and organizations. Many of these people are hired on contract and paid only for work performed, not for time spent on the job. This has an impact on work at every wage level and, generally, employers take less responsibility for the long-term security of their employees, while the "highly skilled contingent workers will be more loyal to their discipline than their employer of the moment" (Boyett, 1996).

Outsourcing in the University Universities provide a good example of outsourcing with regard to maintenance functions. Maintenance is a major cost in running a university. Since teaching and research form the university's core business, few of those involved in the central business of the university - professors, administrators - have expertise in maintenance. The university might consider outsourcing its maintenance work to a company specializing in this area since it knows the business and is focussed on doing what it knows best. As a result, the university gets more cost-effective maintenance.

The Focus on Customer Service

Increased competition has also forced organizations to put more emphasis on customer service. The rigid hierarchical corporate structure where upper management, rather than front-line employees made decisions, created distance between the company and the customers buying its products and services. Organizations must now listen to what customers want and give it to them cheaply, efficiently and immediately because, if they don't, someone else will.

What competition makes necessary, technology makes possible. By taking care of ordering, accounting, processing and communication tasks, information technology has freed the corporation to concentrate on the customer. Computerization of these tasks frees up personnel for sales and marketing - the profit-generating sides of the business.

Corporations also realize that paying more attention to what their customers are saying requires giving more power to front-line employees who deal directly with customers. Again, technology makes it possible to give those front-line employees more information, flexibility and control so they can make decisions and solve problems.

Implications for Career Decision Making

With knowledge of these reorganization trends, the practitioner might want to share the following information with job seekers.

• Experienced workers with a developed area of expertise may want to seek out a company that concentrates on a core area of expertise for a highly competitive challenge in a specific area.
• As larger companies outsource, many jobs will emerge in small companies that provide services, such as printing, marketing, computer network management and training. Personnel departments in large companies may be willing to share the names of businesses used for outsourcing tasks. These businesses can be approached for information interviews.
• In many industries, companies have difficulty finding technically competent people who also have marketing or sales abilities. With the strong emphasis on customer service, people whose main strength is marketing may find their talents in demand when coupled with adequate skills/knowledge in a specific industry.
• Companies with close-knit teams and supportive management are likely to be successful in this economy. This type of information may be gathered from talking to people who work in the company, by job shadowing, or by interviewing the human resources personnel. Company Web sites may also give information on organizational structure or the name of a contact person. Sometimes, if a company is involved in co-operative education placements, the institution's liaison person may be able to provide some inside information on the company.
• An individual who has been downsized by a company wishing to outsource some tasks may try to establish a business and bid on outsourcing contracts. The start-up contractor may need help in the form of a consultant or partner, depending on her/his own personal qualities and skills in running a small business.