| Now,
companies turn to "workforce
churn" |
By Nicole
C. Wong
San Jose Mercury News
HP has laid off 30 percent of its employees
worldwide to cut costs and improve operations.
But sending all those employees away
with pink slips or early retirement
packages hasn't caused a plunge in HP's
global head count - because the company
continuously hired new workers while
it escorted others out the door.
Hiring people while laying off
others is called churn. And
HP isn't the only company that's using
churn to survive the onslaught from
technological innovation and global
competition.
But the legendary computer
company's use of churn to help fuel
its financial turnaround illustrates
how the strategy has shattered the implicit
employment contract that once bound
America's companies with their workers.
HP's decision to embrace workforce
churn puts it on the same path that
many global companies have walked in
recent years.
Churn is used commonly to mean all
kinds of departures from companies,
including voluntary resignations and
those fired as well as those laid off.
Looking at the intentional churn created
solely by layoffs gives insight into
how much companies are controlling how
their workforce changes.
To some management experts, HP's intentional
churn represents a dramatic cultural
change for one of Silicon Valley's signature
companies, whose workplace practices
were once regarded as a model worldwide.
"HP was one of the holdouts of
an older- style commitment firm,"
said Diane Burton, an associate professor
at MIT Sloan School of Management who
has taught a popular Harvard Business
School case study on HP's pre-churn
workforce practices. "Now, they're
treating their people as disposable
workers."
The global layoffs recently helped
HP chisel away at an expensive workforce
in the United States and Western Europe,
and funnel work to lower-paid employees
in Asia, Eastern Europe and Latin America,
according to several HP executives in
Europe.
| Employment
Options in America Reaching a Tipping
Point, Leaning Towards More Self
Sufficiency, Research Study Cites |
 |
|
Southbury, CT –
A new economic reference, “The
New Career Economy” is the end
result of a 2006 research study commissioned
by The Entrepreneur’s Source of
Southbury, Connecticut. In essence,
the study suggests that gone are the
days when individuals will work for
one or two employers, receive lifetime
benefits and retire boasting double-digit
service time from one employer. The
study did suggest that in the future,
long-term security would be gained through
individuals managing their own careers
through self-employment and other alternative
career options.
“We’re at a tipping point
in the American job economy,”
says Terry Powell, founder and CEO of
The Entrepreneur’s Source (TES).
“The traditional job market no
longer offers the security individuals
and families need to live well,”
he added. “Taking control of their
lives through becoming self-sufficient
is now the new way to reach the America
dream of living with long-term financial
freedom.”
The research cites the many threats
to an individuals job security and financial
freedom that never existed before such
as company downsizing, lengthy layoffs,
the elimination of benefits, enormous
corporate bankruptcies, colossal consumer
debt and social security insolvency.
“After spending 26 years in corporate
America and facing another restructuring,
I made a decision to get into my own
business,” says Robert Plenderleith,
now owner of a Huntington Learning Center
in Wyomissing, PA. “I had an opportunity
to do something positive for kids and
make some money,” he added. “I
now have created my own financial security,
through running my own business and
reaping the many rewards from my own
decision-making,” stated Robert.
For those that will work for employers
in the future, the research states that
W-2 wage earners can expect to have
6 to 8 job changes within a chosen profession
in a working lifetime; and/or to completely
change their working profession at least
3 times.
The research findings point out that
since traditional employment options
are becoming unreliable, individuals
may have to provide up to 50% of the
income they’ll need for the more
than 20 years they may live in retirement.
Additional Research Statistics
