New Labour Reality? Maarten van Riemsdijk Universidad Pablo de Olavide Workshop International HRM Sevilla, 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 by labour relation and duration. CBS statline Employees permanent Employees FlexibleAgencyOn callOther flexibleSelf employed Parttime 12 to 20 hours p/w Parttime 20 to 35 hours p/w Fulltime (>35 p/w) Yearsx

Overview Dutch labour market by labour relation and duration. CBS statline Employees permanent Employees FlexibleAgencyOn callOther flexibleSelf employed Parttime 12 to 20 hours p/w Parttime 20 to 35 hours p/w Fulltime (>35 p/w) Yearsx

Type of labour relation expressed by age group x Total Permanent contract, fixed hours to 25 years to 35 years to 45 years to 55 years to 65 years Limited duration, possibly permanent & fixed hours to 25 years to 35 years to 45 years to 55 years to 65 years Limited duration, ≥1 year with fixed hours to 25 years to 35 years to 45 years to 55 years to 65 years Agency work On Call Labour Other non permanent Other no fixed hours

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

Average job tenure some EU countries expressed in years OECD extracted March 2012 USA: years; years ( US bureau of labor statistics; sept )

Job tenure some EU countries 10 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 countries expressed 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!

RELATIVITY OF HR SYSTEMS LEPAK & SNELL

Human Capital Theory (Ben Porath, 1965) C it = (1- λ)C t-1 + μI t – 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?

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-Ability 4 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!