New Labour Reality?

Maarten van RiemsdijkUniversidad Pablo de OlavideWorkshop International HRMSevilla, 2013

Outline

• Introduction and Context• Some Facts & Figures• The Boundaryless career• What will be the new work reality• What can individuals and organisations

do?• Discussion

Fundamental Truth?

• We have in the west economies in which opportunity, insecurity, flexibility and uncertainty coexist (Arthur & Rousseau, 1996)

Some reasons why

• Need for flexibility increases in companies– Strategy, technology, (global) competition

• In Holland (Europe), demographic trends lead to predicted labour shortages

• Labour policies are being designed for more flexibility and longer working lives

Demographics: the Netherlands, The EU

Demographic Development Europe

Demographic Development Holland

Continuous training and adaption needed

• Large cohorts of people (baby boom) will leave the workforce over coming decade.

• Aging population leads to unsustainable costs (pensions)

• Too few young people to do the work

• Hence: older employees have to work longer

• Retirement age >65 (67 right now)• Getting new workers will be a challenge

New labour Relations

• Assumption: This leads to a labour reality that is:

• more prolonged • more flexible• more volatile• more precarious and uncertain • But offers new opportunities and

challenges as well (for some).

In it:

• Employees are more responsible for their own career biography and prolonged employability.

• Companies will be held accountable for employability in and outside of the organisation.

• Keeping up will be a joint interest of companies and employees alike.

• Employees know their employment will be temporary; They should ask how the work enables them to develop and stay employed.

• Companies know work will be temporary, yet they need good quality people; What will they offer to attract them, and keep them developing?

Boundaryless careers ?

• “…..Boundaryless careers are the opposite of ‘organizational careers’ – careers conceived to unfold in a single employment setting”. (Arthur & Rousseau, 1996 p.5).

• Boundaryless career does not characterize any single career form, but, rather, a range of possible forms that defies traditional employment assumptions.

• The key concepts are flexibility, networking, marketable skills, and continuous learning, which workers exchange for performance in a career that unfolds across organizational boundaries (Sullivan and Arthur, 2006).

Overview Dutch labour market 1997-2011by labour relation and duration.

CBS statline 12-03-2012

 Employees permanent

Employees Flexible Agency On call Other flexible Self employed

Parttime 12 to 20 hours p/w

Parttime 20 to 35 hours p/w

Fulltime (>35 p/w)

Years x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000

1996 4911 545 191 165 190 728 418 1323 44431997 5055 573 214 164 195 755 450 1393 4540

1998 5244 606 225 186 195 737 525 1463 4599

1999 5464 578 222 153 203 726 545 1528 4695

2000 5584 532 195 117 221 801 578 1645 4694

2001 5585 486 183 115 188 865 646 1668 4622

2002 5684 457 173 99 185 867 673 1791 4546

2003 5650 438 152 94 192 880 677 1859 4431

2004 5578 454 152 99 202 910 688 1879 4374

2005 5542 498 179 111 208 933 702 1908 4363

2006 5594 541 205 121 215 962 712 1964 4422

2007 5703 601 213 137 251 1005 738 2054 4517

2008 5847 615 205 142 268 1038 736 2174 4591

2009 5851 579 164 148 267 1039 721 2244 4504

2010 5743 598 166 164 268 1049 713 2281 4397

2011 5709 606 172 187 246 1077 710 2313 4369

Overview Dutch labour market 1997-2011by labour relation and duration.

CBS statline 12-03-2012

 Employees permanent

Employees Flexible Agency On call Other flexible Self employed

Parttime 12 to 20 hours p/w

Parttime 20 to 35 hours p/w

Fulltime (>35 p/w)

Years x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000 x 1 000

1996 4911 545 191 165 190 728 418 1323 44431997 5055 573 214 164 195 755 450 1393 4540

1998 5244 606 225 186 195 737 525 1463 4599

1999 5464 578 222 153 203 726 545 1528 4695

2000 5584 532 195 117 221 801 578 1645 4694

2001 5585 486 183 115 188 865 646 1668 4622

2002 5684 457 173 99 185 867 673 1791 4546

2003 5650 438 152 94 192 880 677 1859 4431

2004 5578 454 152 99 202 910 688 1879 4374

2005 5542 498 179 111 208 933 702 1908 4363

2006 5594 541 205 121 215 962 712 1964 4422

2007 5703 601 213 137 251 1005 738 2054 4517

2008 5847 615 205 142 268 1038 736 2174 4591

2009 5851 579 164 148 267 1039 721 2244 4504

2010 5743 598 166 164 268 1049 713 2281 4397

2011 5709 606 172 187 246 1077 710 2313 4369

Type of labour relation 1996-2010 expressed by age group1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

  x 1 000                          Total 5 456 5 628 5 850 6 042 6 116 6 070 6 142 6 088 6 031 6 040 6 135 6 304 6 462 6 430 6 341

Permanent contract, fixed hours 4 648 4 767 4 935 5 150 5 290 5 251 5 323 5 277 5 213 5 184 5 192 5 220 5 330 5 325 5 237 15 to 25 years 455 448 432 497 526 531 537 507 454 422 405 406 425 402 356 25 to 35 years 1 522 1 544 1 579 1 591 1 589 1 526 1 455 1 402 1 348 1 303 1 263 1 228 1 219 1 204 1 169 35 to 45 years 1 347 1 391 1 429 1 477 1 544 1 564 1 588 1 566 1 561 1 563 1 575 1 545 1 556 1 521 1 477 45 to 55 years 1 065 1 102 1 184 1 238 1 250 1 244 1 284 1 302 1 313 1 336 1 361 1 391 1 428 1 454 1 458 55 to 65 years 259 282 311 348 381 386 460 500 536 560 587 650 702 744 776

Limited duration, possibly permanent & fixed hours 163 185 211 223 220 269 291 292 277 267 304 376 408 401 382 15 to 25 years 58 66 69 62 60 71 73 71 71 68 75 82 88 90 85 25 to 35 years 75 86 99 104 95 112 119 118 107 110 123 151 156 146 145 35 to 45 years 23 22 31 39 44 57 66 70 65 59 70 94 105 100 91 45 to 55 years 6 10 11 16 19 26 30 29 30 26 31 41 51 55 50 55 to 65 years . . . 2 . 3 3 5 5 4 5 8 9 10 11

Limited duration, ≥1 year with fixed hours 100 104 98 90 74 65 71 80 88 90 98 107 109 125 125 15 to 25 years 32 40 25 26 20 20 20 23 25 25 28 30 30 32 34 25 to 35 years 45 42 46 37 30 24 26 31 36 36 38 40 41 47 46 35 to 45 years 15 14 18 18 15 14 17 15 16 18 18 21 22 27 24 45 to 55 years 6 6 7 7 7 6 6 8 9 9 11 12 12 13 15 55 to 65 years . . . 2 2 . . 3 3 3 3 4 4 6 6                               Agency work 191 214 225 222 195 183 173 152 152 179 205 213 205 164 166On Call Labour 165 164 186 153 117 115 99 94 99 111 121 137 142 148 164

Other non permanent 128 135 126 121 119 131 128 138 147 150 153 174 183 186 185

Other no fixed hours 62 61 69 82 102 57 57 55 55 57 62 78 84 80 83

Labour relation of Dutch employees 1996-2012 by contract type (and self employed)CBS Statline March 2013

Average job tenure some EU countriesexpressed in years

OECD extracted March 2012

0

2

4

6

8

10

12

14

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Belgium

France

Germany

Italy

Netherlands

Spain

UK

USA: 1996 3.8 years; 2002 4.4 years (US bureau of labor statistics; sept 14 2010)

Job tenure some EU countries10 years and over expressed as % of total working population

CBS statline March 2012

BUT

• The cohort of young people (25-45 years) in the labour population has decreased substantially (47% 1999 to 39% 2012).

• Relatively, the cohort of over 45 years has increased (36% to 44%, remember people have to work longer as well).

• This group shows much less labour transitions, so the slight decrease is larger in reality.

Job tenure 5-10 years some EU countriesexpressed as % of total working population

CBS Statline March 2012

Conclusion

• There seems to be some scant evidence that:– Labour relations might be fundamentally shifting

• But No evidence that:– People become more mobile in their career.

• However:– Companies say there is a shift, and do act on it.– Government says so too and adjusts its policies.– People ‘feel’ something is happening

• We need to take a closer look!

Klik op het pictogram als u een afbeelding wilt toevoegen

RELATIVITY OF HR SYSTEMSLEPAK & SNELL

Human Capital Theory (Ben Porath, 1965)

• Cit= (1- λ)C t-1 + μIt

– C = Human Capital– I = Individual– t = Time– λ = Depreciation– μ = Investmentquote– I = Investment

Depreciation of HC (De Grip et al 2011)

• Technical– Peoples’ productivity depreciates because of

– General wear and tear (getting older)– Atrophy

» Lack of use» Work below your level

• Economical– The market value of your productivity

depreciates– The content of your knowledge becomes obsolete– The industry you work in goes down

Economical Depreciation

• 1. Function related depreciation – Technological progress and organisational change

or strategic choice: Hence competencies and knowledge of employees are no longer sufficient or even no longer relevant.

• 2. Industry- and company specific depreciation– Caused by reorganisations of company closures,

eradicating industry specific skills and knowledge– Changes in the professional structure in an

industry, leading to lower or no demand for some knowledge and skills.

HC Theory

• Why do Job Hoppers experience lower salaries over their careers?

• Why is it so hard for the unemployed or re-entrants to find a job?

• Why do companies not invest in ‘general’ knowledge and skills?

• Why do older people get less training?

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Companies need

• More adaptability

• Functional flexibility

• Longer employability at competitive level

• Be attractive to new generations

• Offer employability rather than job guaranty

Maybe HR policies should change

• Become more differentiated, different offers for different groups of employees.

• Be less geared towards permanent contracts– Offer temporary jobs right from the start– Force employees to be functionally flexible

• Different jobs, changing job content– Realistically discuss the work future of individual

employees.• Use yearly appraisal talks

– Offer not only company specific training but labour market related training opportunities

We are far off

• Very few companies look ahead• Very few managers allow their best

workers to train/educate themselves• Very few companies can predict

technological change and its impact on work

• Strategic personnel planning is still very traditional

• Individual workers should therefore take the lead!

What can you do?

• Essential is to be employable (able to get and keep a job)

• In the modern career individuals need to be in pursuit of ‘‘opportunities to obtain training, enhance their human capital, and remain marketable” (Cheramie, Sturman, & Walsh, 2007, p. 360).

Career Adapt-Ability4 C’s

• Concern about the future helps individuals look ahead and prepare for what might come next.

• Control enables individuals to become responsible for shaping themselves and their environments to meet what comes next by using self-discipline, effort, and persistence

• Curiosity prompts a person to think about self in various situations and roles.

• Confidence: exploring experiences and information-seeking activities produce aspirations and build confidence that the person can actualize choices to implement their life design.

Savicksas & Porfeli 2012

• Thus when vocational tasks, occupational transitions, or work traumas occur, the adaptable individual is: A. Timely becoming concerned about the

vocational future, B. Immediately taking control of trying to

prepare for one's vocational future, C. Start displaying curiosity by exploring

possible selves and future scenarios, and D. Strengthening confidence to pursue one's

aspirations.

Proactive personality

Workers with an innate willingness to change are the driving force for success of individuals and competitive advantage of organizations (Fuller Jr. & Marler, 2009)

The prototypic proactive personality is described as ‘‘one who is relatively unconstrained by situational forces, and who effects environmental change” (Bateman & Crant, 1993, p. 105).

SO: Be pro-active!