Managing Without Commitment
By Nancy Moffitt
Wharton's Peter Cappelli and The New Deal
— Or Is It a Raw Deal — At Work
Employee A has worked as a manager at a major consumer products company for the past 20 years.
He realizes – as he sees the swirl of young and technologically adept colleagues coming and going –
that his future is not secure.
Employee B has seven years of varied corporate experience as an up-and-coming software manager.
He fields about a call a day from recruiters offering salary and stock options packages that always
seem to be rising, and enjoys being in the driver's seat with few long-term obligations.
Employee C works for a "professional employer organization" and is currently leased to a mid-sized
medical products manufacturer that has decided it no longer wants the expense and liability of its
own employees. Instead, the company's top executives have contracted to rent an entire staff, thus
eliminating commitments, maternity leaves, benefits and pensions.
Whatever happened to taking a corporate job, working
your way up the chain of command over many years, being
rewarded for your loyalty with steady promotions and pay
increases, and retiring at age 65 after a long career with one
company, or at a minimum, one industry?
There's no denying that jobs – how we find them, what
they mean to us and what they mean to our employers –
are not what they used to be. Today, a quiet revolution
is underway in the employment world that has all the elements
of a good drama: abrupt power shifts, big money,
risk and uncertainty, and, for some, payoffs galore.
Peter Cappelli, professor of management and director of
Wharton's Center for Human Resources, is fascinated by the
changing landscape of employment, and by many accounts
is the only academic in the nation to so closely study and
chronicle its evolution.
Over the past two years alone, Cappelli's research has
tackled issues including downsizing and performance,
market-driven approaches to employee retention, and the
so-called shortage of information technology workers
(see sidebar). On a broader level, a spring 2000 research
paper, called Managing Without Commitment, offered
an abbreviated glimpse of Cappelli's 1999 book, The New
Deal at Work: Managing the Market Driven Workforce
(Harvard Business School Press), the first book of its kind
to reveal just how much things have changed between
employee and employer.
"The traditional employment system of secure, lifetime
jobs with predictable advancement and stable pay is, by
most accounts, dead – even in large organizations," says
Cappelli, 43.
Consider the following:
- Staffing firms that provide "leased" employees to companies
are booming, including Professional Employer
Organizations, which take on nearly all the legal obligation
of being an employer for their clients.
- A recent survey of employee expectations found that
job security ranked only fifth out of 10 attributes in
importance.
- Employee poaching, even team poaching, has become a
common recruiting method. The head of Coopers & Lybrand's
Madrid office, for instance, recently took his entire,
90-person team to Ernst & Young.
- The online recruiting industry has become a $3 billion
powerhouse that includes sites such as Monster.com,
which has 6.3 million resumes and nearly 500,000 job
postings on its site.
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