It doesn't seem the most pleasant of times for being a worker in a large company.
Litterally at the minute that I started to write this article, a news alert popped up that the large Dutch bank ABN Amro is going to dismiss up to 1375 “superfluous” workers (link in Dutch).
And also at other financial institutions, commercial service providers and insurance companies there is a continuous search for ways to replace ‘expensive, time-restricted and basically unreliable’ workers with digitized and robotized services that can be operated around the clock the whole year through, in this increasingly 24x7 economy.
Instead of such large companies having thousands of employees in large office towers who provide manual services on behalf of their customers during working hours alone, the customers are taught to service themselves via the ubiquitous online channels or the upcoming robotized telephone, chat and whatsapp services:
“Do you want to have a loan, a mortgage or an insurance policy?! Please visit our website at www.yourloan.com (fake address) and fill in the online application form. Your application will be serviced within 48 hours, after you uploaded all the forms and necessary documentation! And if you want to receive our standard insurance policies really quickly, please use our latest Whatsapp service!”
The obvious result is that the lower and mid-level jobs at such commercial / financial companies disappear at a blistering speed, while being temporary replaced by (freelance and project-driven) consulting jobs to enable the deployment of complex digitization and robotization services. Services that allow banks and insurance companies to do the same amount of work with only half the personnel or less.
Also in case of more hands-on jobs, like construction worker, distribution worker, agricultural worker or factory worker, there is a trend to get rid of people who are on the company's payroll with fixed contracts and replace them by freelancers or temporary labour, acquired from specialized service companies or temporary labour agencies.
Great examples are the building company virtually without construction workers and the large sales & distribution company without distribution workers on the payroll. The responsibility, the organization and the ‘hassle’ of having executive personnel are ‘delegated away’ to specialized services companies and what remains are a skeleton crew of high-profile, strategic personnel and a few invoices per month that must be paid.
At the same time, the traditional small and medium enterprises – usually a great driver of new jobs – are extremely reluctant to hire new personnel on fixed contracts. They are either worried about not being able to dismiss people at will in more difficult economic times or about the substantial risk of workers getting ill and requiring both a replacement worker and a long-term sickness payment (i.e. the so-called double whammy). Especially the latter is a risk that keeps owners of small companies with 5 to 10 people (f.i. retailers) awake at night.
In especially the Eighties and early Nineties of last century, it was normal that sick workers received a governmental sickness benefit (i.e. Algemene Ziektewet) after only a few days of illness. However, the Dutch government found out that some (especially SME) employers abused this law in times of weak business, by sending their temporarily superfluous personnel home on ‘sick leave’ until better times reappeared.
As a consequence this traditional sickness benefit was replaced by a series of laws in which the employer remained responsible for the sickness payments for a much, much longer period – up to a year or even longer – and also was made more responsible for the causes of such cases of sickness leave. This forced employers to more closely monitor the physical and mental health of their personnel and led to a host of new businesses, involved with the monitoring and guidance of workers, the so-called Arbo-companies (i.e. labour circumstances).
While this generally was a manageable challenge for larger companies of at least 50 employers – as general sickness statistics started to work to their advantage – it often caused grave problems and sometimes even an untimely end for (very) small companies and f.i. “mom-and-pop” retail stores. The result was that they tried to prevent personnel from ever working on fixed contracts and only hired personnel with temporary contracts for a number of years in a row.
When you look at things like this, employees with fixed contracts seem to have very little in their favour; for large as well as small companies. Flexibility is hot and robotization and digitization are even hotter.
However, you can also look at workers from a different point of view. Perhaps it’s time to appreciate your workers again and look at them as the mortar of every company; even if they come with their human peculiarities and an administrative hassle and even when their productivity looks inferior to robotized and digitized services. You can do so for a number of reasons.
Do you trust your computers and robots enough to let them run everything in your company? And do you entrust your suppliers of temporary labour and commercial services to always keep YOUR priorities at number one and work at your advantage alone?
Is it not much more convenient and comforting to have a group of loyal workers around you that are on your payroll and feel really part of your company's family? People that are willing to run the extra mile when the work requires that? And people that you can ask about things that went wrong or could be made better? Your robotized service surely can’t answer your questions and inquiries, when a customer is offended or goes to your competitors out of the blue.
And do you trust the thesis, that your customers like to be helped by a robotized telephone operator, to have a positive outcome?! And that it won’t scare away your elder customers towards your competition, which does operate a call centre with real employees of their own?
When there are two things that both the robotization and the outsourcing of core activities – like call centres and distribution departments – cause, it is that a. customers feel more detached from commercial / financial services companies (i.e. feel more treated like a number than a customer of flesh and blood) and b. those human call centre and distribution service workers will never feel attached to your company in the first place. They work for your company today and for your competitor’s company tomorrow and don't mind much whether customers run away to your competition. They simply do their job and that's that.
And be sure that your customers notice, whether a call centre employee is really attached to a company on whose behalf he works or just a hired gun from a specialized service provider. So perhaps companies should give the outsourcing of real core activities a second thought after all.
Last, but not least, there is the issue of SME companies and their personnel.
The legislators (i.e. national government) and the executive organizations for labour laws and work-related social security (i.e. local governments, as well as governmental executive bodies, like the Sociale Verzekeringsbank and the UWV) should think about new sickness laws that are less radical and ‘life-threatening’ for small companies, in case of long-term sickness.
On the other hand these laws should still not open the floodgates for abuse of sickness money in economic hard times for companies. Restoring the situation from the Eighties would be reckless, but the current situation at the labour market is also unsustainable. That is one of the challenges that the new Dutch cabinet will have ahead in 2017.
But finally: take a look at the people who work for you and consider giving them a fixed contract. They might not be so bad after all and they will be grateful and loyal in exchange for that.