Fear Factor – Obstacles to full employment

Rick over at Flip Chart Fairy Tales did a piece this week, and it chimed in with a bit of thinking that I’d been doing and a few articles I’d read, and in a wakeful hour at 5am I came up with some ideas.

Economists like to think of employment in charts and statistics, which can tell you so much. Since I studied Economics at Uni (a few years back now), I’ve been busy working in a variety of businesses and seen a lot of cycles, trends etc.

How anyone can judge whether we’re are at full employment I don’t know. Jobs are created not by organisations but by people. Managers have to assess their staff, their workload, their budgets, and then make calls on recruitment.

But most managers are pretty rubbish at it. They are usually technical specialists with some people and management skills, promoted to management and doing their best. But the pressure is on. Organisations of all types must work to their budget. (That’s not always true, but that’s the line they’re fed). The budget is based on history and what they’ve been paying before. Very few managers understand how it fits into the organisation’s goals, how it is calculated, or even who did the workings. The manager’s boss is being judged on performance vs budget, and is sufficiently removed from the day-to-day that they don’t care about the details. If the manager is to ensure his medium-term survival in the organisation, they have to work to the budget, they have to save more than their predecessor, they have to demonstrate that they’re more aware of the financials than the manager of Dept B. They get swept up in meetings, presentations, and still have to do bits of the technical work in which they excelled. So they work extra hours – it’s expected, it’s the norm. And subordinates C,D,E follow suit. Everyone pulls together to get things done, everyone wants to look like they’re trying just as hard as everyone else. Everyone in the whole team is now working from a perspective of FEAR – and this travels vertically up and down the organisation.

What I’m saying is, most organisations get by with their current headcount because they’re cutting corners for financial ends, and deriving lots of free work from their staff. And this works because it’s the same in almost every work environment, and the fear of losing work is much greater than the perceived loss of an hour with the kids, or a walk round the park with the dog, cooking a nice meal, or taking Spanish lessons.

But every hour spent working is an hour lost to the rest of society. Someone, somewhere is having to cope with that loss – a partner getting stressed at the kids, the kids who don’t get a story and a cuddle, or a local school short of governors, an evening course teacher with no work as there are no pupils, a local butcher with unsold stock because you’re getting ready meals from the co-op on the way home.

Putting it another way, a heck of a lot of people are working extra hours for free, and this is keeping other people out of work. And this is a significant obstacle to full employment.

You might argue that this is key to keeping costs down, thus keeping prices down, it’s somehow efficient. It’s a global race, and we must remain competitive.

But competitiveness comes not from cheap labour alone. At the margins, perhaps, but all competitors are all doing the same things. There’s a dead simple Game theory modelling of this you could do, but the current situation is sub-optimal for all. Every organisation employing people would surely prefer to have more employees (more brains), working fewer hours – it’s surely more likely to deliver long-term success.

True organisational success comes from delivering really bloody well, or developing great products, it’s not achieved through fear and overwork.

Which comes back to one of the recurring themes of this blog – most of the faults with our economy and our society is this obsession with short-termism. Banks covering short-term losses with risky derivatives, business leaders pillaging massive bonuses on dangerous bets still on the table, politicians trying to save ten-bob now at the cost of developing smart, happy, well-adjusted kids, regulators capsizing themselves for a swizzy city-job, voters with nothing more in mind than todays papers. When short-termist thinking persists over long periods the result is a rudderless society, with idiots at the helm, and a small few selfish individuals who are happy at capturing god-like treasure booty, oblivious to the puddles forming around their feet.

Link to Rick’s piece https://flipchartfairytales.wordpress.com/2013/03/20/life-after-peak-employment/