The Ready Reserve of Corporate America

The Ready Reserve of Corporate America

The Great Recession has battered the public image and standing of corporate America. In poll after poll, Americans rank the business sector at or near the bottom of the list of the institutions they most respect. In response to this situation, a small but growing number of employers have begun—without fanfare or formal declaration—to alter the way they intend to structure and staff their organizations during the recovery.

The start point of this shift is not new—employers have tried it from time-to-time over the past several decades—but its end result will be dramatically unlike what has been tried before. Now, more than ever, employers are determined to effect real change in their human resource management. They are not simply renaming the blocks on their organization charts as they did in the past; they are making a deep and fundamental revision to their conception of a workforce.

Big no longer connotes success when times are good, and small no longer connotes it when times are tough. What these employers now seek is a steady-state minimization of their employee obligation. They are looking for ways to maintain staffing while managing employee expectations about the future. As the economy heats up, they seek to increase employees even as they shrink the definition of employment, and that effectively produces a “national warming of work.”

As in the past, employers will start by identifying a set of positions they deem to be critical to the corporation’s strategic success. They will segregate these jobs in the organization by defining them—informally in the near term but ultimately as a formal convention—as their core or “regular” structure. They are the tasks a company believes it must perform in order to ensure its successful operations in normal times.

When business expands, however, this capacity will become insufficient so employers will have to adjust. As they have in the past, some will continue their recessionary behavior and demand even more output from their current employees. Others may invest in more powerful technologies that can be rapidly installed and produce a quick increase in productivity. And, still others may opt to lease the capacity from other organizations by outsourcing certain functions or activities to them.

All of those strategies have limitations, however, so it’s likely that the majority of employers will revert to old behavior and add to their structure. In previous recoveries, they would have accomplished this expansion by creating temporary positions that eventually become permanent jobs. In this PR-challenged environment, however, they will embark on a new approach, one that is much less blatantly injurious to workers.

They will acquire capacity by adding structure, but this structure will not be considered core or regular. It will be viewed as a set of reserve positions that provide workers with full time but impermanent employment. I call this new strategy the “ready reserve of corporate America.” I’ll describe it in more detail in my next post.

Thanks for reading,
Peter

Note: The above post was drawn in part from my new book, The Career Activist Republic. To read more, get the book at Amazon.com, in many bookstores and on Weddles.com.