The Economist on Work

Schumpeter

Overstretched

Many people who kept their jobs are working too hard. What can companies do about it?

May 20th 2010 | From The Economist print edition

IN GEORGE ORWELL’S “Animal Farm” the mighty cart-horse, Boxer, inspires the other animals with his heroic cry of “I will work harder”. He gets up at the crack of dawn to do a couple of hours’ extra ploughing. He even refuses to take a day off when he splits his hoof. And his reward for all this effort? As soon as he collapses on the job he is carted off to the knacker’s yard to be turned into glue and bonemeal.

“Animal Farm” looks ever more like a parable about capitalism as well as socialism. Everybody knows about the scourge of unemployment. But unemployment is bringing another scourge in its wake—overwork. The Corporate Leadership Council, an American consultancy which surveys 1,100 companies every quarter, reports that the average “job footprint” (what a worker is expected to do) has increased by a third since the beginning of the recession. The Hay Group, a British consultancy which recently surveyed 1,000 people, says that two-thirds of workers report they are putting in unpaid overtime. The reward for all this effort is frozen pay and shrinking perks. The only difference between these overstretched workers and Boxer is that they can see the knacker’s van coming.

read more

So far workers have borne all this with remarkable stoicism—partly because they feel lucky to keep their jobs and partly because they want to save their firms from going under. But the Dunkirk spirit is beginning to fade. The Hay survey notes that 63% of workers say that their employers do not appreciate their extra effort. And 57% feel that employees are treated like dispensable commodities. Half report that their current level of work is unsustainable. People are wearying of frantic reorganisation as well as the added toil—floods of memos and meetings, endless reshuffles, the exhortations to do more with less.

For their part, companies are beginning to notice the downside of all this overstretching. Absenteeism is on the rise. Low-level corporate crime is growing. Corporate loyalty is on the wane. The Corporate Leadership Council reports that the proportion of workers who are willing to put in “discretionary effort” has dropped by almost half since 2007, while the share of respondents who claim that they are “disengaged” from their jobs has risen from a tenth to a fifth. But “discretionary effort” and “engagement” are vital sources of the innovation and creativity that companies claim to value so highly.

The biggest danger for companies is if workers head for the door as the economy picks up. The Hay Group reports that 59% of its sample are either considering leaving or actively looking for a new job—and more than 85% of those who are not in the job market are staying only because that market is so dismal.

Most problematic of all is when star employees decide to look for work elsewhere. These “high-potentials” (HiPos) are doubly frustrated: they have been asked to shoulder a disproportionate share of the growing burden of work and they have seen senior jobs dry up as older managers try to cling to their positions.

A few signs suggest that overstretched companies are beginning to hire again. America added 290,000 new workers in the past quarter. But the growth in employment is likely to be much slower and patchier than it has been after previous recessions. Bosses report that they expect a prolonged period of slow growth in the rich world. And the recession that has battered the private sector will soon reach the long-protected public sector as governments desperately try to bring their deficits under control.

What can organisations do to cope with this new era of overwork? Most obviously they can redouble efforts to make staff feel valued. Cash-strapped companies are making more use of symbolic rewards. Cap Gemini, an IT consultancy, has a “gold awards programme” complete with a public ceremony every six months. This might sound suspiciously like the parades that the pig-dictator in “Animal Farm” organises to reconcile his fellow animals to their desperate lot. But, given people’s worries about their job security, it seems to work like a treat.

A second strategy is to make more use of that old favourite, “empowerment”. This means trying harder to explain why companies are acting as they are. At Dollar General, a retail chain, managers brief selected front-line workers on corporate strategy and then ask them to explain what is going on to their workmates. It also means giving workers some more control over their lives. Best Buy, a seller of electronics, measures staff by their results rather than their hours. Bombardier, an aircraft-maker, encourages managers from different divisions to act as consultants to each other. Cap Gemini gives as many people as possible 3G devices so that they can do their administration while travelling. More companies are allowing staff flexible working hours as a way of reconciling them to added burdens—if they can’t have more pay, workers can at least have more control over how and when they work.

Power to the HiPos

A third strategy is to pay particular attention to high performers. A striking number of companies have introduced “HiPo schemes” to identify and nurture potential stars. Procter & Gamble, which sells consumer goods, encourages rising stars to tackle difficult problems (“crucible roles”). Hewlett-Packard, an IT firm, lets its stars attend high-level strategy meetings and suggest solutions. The companies are combining these schemes with judicious pruning of less productive workers.

This approach is less divisive than it sounds. Most workers are surprisingly keen on rewarding superstars (who hold the future of the organisation in their hands) and on dumping freeloaders. And sensible bosses are well aware that their competitors are already compiling hit lists of high-flyers who are dissatisfied with their lot. All animals are equal, remember. But some animals are more equal than others.