The Challenge Posed by the New Employment Relationship

Given recent developments, large parts of the twenty-first century American economy can be expected to exhibit the characteristics seen today in the fastest moving sectors—innovation as the basis of competition, and as a result, a prevalence of flexible organizations ill-suited to supporting the old employment relationship. American society will face a major challenge in meeting the needs, of both firms and workers, formerly provided for by the traditional employment contract.

For firms, the old employment contract gave reliable access to a supply of workers with the right mix of skills. Many employers initially welcomed flexible work arrangements, because they led to reductions in fixed costs. But in the late 1990s, as the unemployment rate went down, many companies saw the flip side of the new system, as they faced increased competition for talent and had trouble filling key jobs.

For workers, the traditional employment contract provided a number of important things: economic security, through the promise of ongoing employment; benefits such as health insurance and pensions; prospects for career advancement, created by company training programs and opportunities for promotion up internal job ladders; a place for daily social interaction with co-workers; and a sense of identity and belonging. In a world where the traditional employment contract is increasingly scarce, many workers are understandably worried about how they will meet these important needs.

In addition to employers and workers, other institutions with a role in shaping workplace practices—in particular, government and schools—will also face the challenge of adopting to the new employment system. In the decades after World War II, the old employment system played an important role in diffusing prosperity and offering the prospect of upward mobility to millions. The crumbling of this important institution has left many Americans disillusioned and wary about the future (Sennett 1998).

Inventing the Organizations of the 21st Century
Inventing the Organizations of the 21st Century
ISBN: 026263273X
EAN: 2147483647
Year: 2005
Pages: 214

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