A Fundamental Shift in Talent Management: Will "Active Job Security" Replace "Passive Job Security"?

Signs suggest that the employment relationship emerging from the recession may be changed in fundamental and long-lasting ways.  One element of that shift which deserves special attention and consideration is job security.

Towers Watson recently published key insights from their 2010 Global Workforce Study (The Shape of the Emerging "Deal") which reflects the perspectives of more than 20,000 full-time employees in 22 markets around the world.  Among their key findings, which they report to be surprisingly similar across the globe, are the following:

• The desire for security and stability trumps everything else right now, in part because employees see security as a fast-disappearing part of the deal. 

• Employees understand they are solely or chiefly responsible for ensuring their long-term financial and physical health and well-being as well as their career and performance — but have serious doubts about their ability to take on these roles.

As the Towers Watson piece notes, we are moving to an employment relationship increasingly built upon the concept of self-reliance.  Their study results show that employees see this and may even buy in to it to some degree, but are less than confident about their ability to rise to the challenge.

Astute employers will recognize the opportunity here to strengthen their bonds with workers while also creating the kind of adaptable organization needed to succeed in the new economic reality. 

Towers Watson captures the essence of this shift, and the important role smart employers will play in shepherding workers through it, with the phrases "Passive Job Security" (where we are coming from) and "Active Job Security" (where we are going to). As the phrases imply, navigating the shift means that employees must recognize and actively embrace responsibility for their own job security - and employers must provide the programs and support necessary for employees to do this successfully.

What this comes down to - I believe - is two parallel roads which must be followed as we work to build and keep the kind of workforce we'll need for the new economic reality.

 
And success will require that steps down one road must be matched by steps down its parallel.

For example, in the area of rewards, as we take steps down the road of building flexibility and agility, including...

• More tightly controlling base salary increases and investments
• Increasing the use of variable/incentive compensation

... we must match those steps on the parallel road of fostering and supporting self-reliance by doing things like...

• Bringing clarity and transparency to incentive plan design and management, so employees understand what must be accomplished in order to earn an award
• Providing education and coaching to help employees see the connection between what they do on the job every day and moving the needle on key organizational performance objectives
• Supporting employees in managing the shift in pay mix with financial planning/budgeting courses and services geared to their new reality

The bottom line is that attracting and keeping an engaged and productive workforce in the new reality will demand moving down both roads in tandem.  But even more than that, failure to do this will ultimately alienate your very best workers first.  That's right.  As you push the most talented and highest performers to be increasingly self-reliant and accept a growing proportion of the risk in the relationship, they're going to start asking themselves (and rightly so) why it is, exactly, that they even need you.  If another, more supportive employer doesn't lure them away, an entrepreneurial opportunity where the risk is coupled with a bigger upside will.  Count on it.

I think I'll call it the Tandem Road Imperative.  That's all I've got.

Ann Bares is the Editor of Compensation Café,  Author of Compensation Force and Managing Partner of Altura Consulting Group LLC, where she provides compensation consulting services to a wide range of client organizations.  She earned her M.B.A. at Northwestern University’s Kellogg School and enjoys reading in her spare time.  Follow her on Twitter at @annbares.

Comments

[Jan Frisch]

Very insightful post. It will be a while before most employees get the messaage. Employers will come along once they realize that they need to do so in order to keep top talent.

[working girl]

I read a great book about ten years ago (I can't remember the name) that said forget about job security, which is a myth, and focus on 'employment security.' That means, making sure you have the skills to stay employed, regardless of your current job. I wish I could remember the author. One other piece of advice that stuck with me: Treat every day on the job as the day before you're leaving on vacation.

[Michael Haberman, SPHR]

Anne, great post. I like working girl's "employment security" which goes along with Free Agent Nation and You, Inc. concepts. But employers do need to realize that to keep the employee most capable of thinking this way, and acting on it, there must be a balance between fostering this and retaining the employee. If employers do not help work on the "active job security" by making employees realize their role, then the employees may work on "passive job security" by getting unions involved in contracts that promise job security. A fine balance is needed in the former to prevent the latter.

[Ann Bares]

Jan:

Thanks!! And you're right, some will come along slowly, some only when the proverbial gun is to their heads ... and some may never figure it out!

WG:

That's a good message - hopefully employees (and that's all of us) will hear it and heed it!

Mike:

Good points - and I agree that it is a delicate balance for employers, but one worth striving for.

Thanks - all - for the comments!

[Frank Koller]

The Watson Towers survey is so important, I’d suggest, because it highlights the distrust most American now place in concepts such as “free agent nation” and “employment security” which locates the responsibility for personal survival in the modern economy almost completely in the hands of employees. The flipside of that, of course, is that it tends to absolve employers from any sense of long-term responsibility for their employees’ survival in the market. And we know how well that has worked out, don’t we?
I do agree with Ann’s parallel track approach which requires employers to “provide the programs and support necessary for employees” to feel confident about taking risks and pushing the envelope of creativity while requiring employees to “recognize and actively embrace responsibility for their own job security.”
I confess I am writing this as the author of a brand new book, SPARK, about an American mutilnational manufacturing company, Lincoln Electric, which has embraced this dual-track approach for nearly a century – including an unbroken promise of guaranteed employment.
The result has been that for employees, this Forbes 400/Fortune 1000 firm has not laid off a single permanent American employee for economic reasons since 1948, at least, while for the firm, it has remained the largest manufacturer and exporter of arc welding technology in the world since the 1930s and kept Wall Street exceedingly happy with a steady stream of profits.
Security is a concept which has, sadly, seen its reputation tarnished. It needs to be polished once more.