The low-cost labor route may dead-end in tomorrow’s economy. So says scholar
Edward Lawler, co-author of the just-released book "The New American Workplace."
The book aims to update a seminal 1973 study about work in America, and Lawler
discussed the findings at the Society for Human Resource Management’s annual
conference in June.
As he does in the book, Lawler argued to his SHRM audience that companies
focused on cutting costs through measures such as low wages and skimpy benefits
will struggle to adapt effectively in the fast-moving global economy. You can go
"only so far" with a low-cost approach, he said.
Lawler wrote the new book with James O’Toole, the principal author of the
original "Work in America" study more than 30 years ago. The new book was
financed in part by SHRM.
The 1973 study, sponsored by the federal government, cited evidence that too
many Americans were engaged in narrow, repetitive and routine jobs, especially
in manufacturing, and that was leading to mental and physical health
problems.
In "The New American Workplace," Lawler and O’Toole say executives in the
1970s and 1980s redesigned some jobs to make them more challenging and
satisfying, automated other tasks, and exported many of the remaining "bad"
jobs. Now, they say, the U.S. has chosen to have the most capital- and
knowledge-intensive industries in the global economy.
But the country faces a number of challenges. To survive competitively, the
U.S. economy must be in a state of constant change, where inefficient products,
companies and industries are continually replaced.
The country is not creating enough new good jobs, Lawler and O’Toole say.
They also see evidence of decreasing economic mobility. And while workers face a
wider array of choices than ever before, the authors say that most American
workers bear increased risk in areas such as employment security, health care
and retirement.
The topic of economic insecurity in America has been getting more attention
in the past few years, as companies distance themselves from traditional pension
plans and corporate giants such as General Motors announce major layoffs.
In the wake of the traditional bureaucratic, hierarchical management model,
Lawler and O’Toole see three alternatives today. One is what they call "low-cost
operators," which concentrate on trimming costs in a bid to keep prices low.
Work there, they write, is in many ways "similar to the routine, low-level tasks
that were the norm in manufacturing in an earlier era."
The companies Lawler and O’Toole call "global-competitor corporations" are
large and geographically spread out, and they compete for financial capital,
skills, knowledge and technology. The firms may pay employees well and offer
opportunities to develop new skills, but the relationship between such companies
and employees is "transactional, not one based on loyalty."
Then there are "high-involvement companies," which provide workers with
challenging jobs, a voice in the management of their tasks and a commitment to
low turnover and few layoffs. The authors say employees in these firms tend to
share in company profits or from gains in productivity and enjoy generous
benefits.
During his presentation, Lawler said that the latter two management styles
make the most sense. But, he said, "Our hearts and minds are with the
high-involvement approach."
--Ed Frauenheim