The New Economy Heralds the
Return of Taylorism
Given that the net has proven to be a superb tool for comparing consumer prices and obtaining cheaper products and services it, perhaps, should not be a surprise that the hidden costs of some of the fast growing businesses in the world amount to a return to Taylorsim as the people management norm. As I have noted elsewhere previously, this may be dressed up as talent management, but for the average employee it means low paid insecure employment, with exhausting targets, overbearing managers and pressure to conform to company policies. Amazon, SportsDirect, RyanAir, Tesco and others have all come under intense media scrutiny for their employment practices.
Ryanair, it seems runs league tables for pilots fuel loading, employs over 70% of pilots on zero hours contracts, makes ground and stewarding staff pay for their own uniforms and drinks (at airport prices). Whilst Channel 4s Dispatches reports pilots feeling under pressure to cut corners, to save money, whilst their feedback is ignored. So bad has it got at RyanAir that pilots are cooperating, via a WhatsApp group, to refuse to help the company to overcome a pilot scheduling error that is causing the cancellation of thousands of flights this winter. The energetic CEO of RyanAir; Michael O’Leary, makes no secret of the fact that it is a low cost company. However, one wonders how appropriate a pure hard HR model is in the airline business, given the paramount importance of safety, especially when that regimes extends even to the pilots. This does look like an accident waiting to happen.
Amazon, eBay and Starbucks have all become notorious for their aggressive approach to corporate tax, but Amazon, in particular, has come under fire for its employment practices. Recent reports in the Sunday Mirror and The Independent newspapers suggest that the pressure to achieve targets is causing employees to literally collapse at work. In common with Sports Direct, Amazon is timing toilet breaks, targeting employees to process a parcel every 30 seconds, and discouraging trade unions, in a focused effort to squeeze productivity to the limit. Both companies are also reported to be making extensive use of zero hours contracts in the UK, which offer no guaranteed hours and considerable insecurity, in exchange for (mostly) minimum wage earnings. Precisely the sorts of conditions which gave rise to trade unions and would be described as sweatshop conditions during the industrial revolution.
Such conditions gave rise to the emergence of the human relations school of people management, exemplified by the likes of Cadbury’s and Saltaire. In contrast to their competitors, the Cadbury brothers and Titus Salt saw their employees as a source of competitive advantage, rather than a cost to be minimised. For them quality (of product and work), not only price, was central to their business model. An investment in an employee wasn’t just about improving productive capabilities, it was about creating a more civic society, without which it was recognised that order breaks down, life becomes more brutal for most and those lucky enough to escape the daily grind are forced to abandon any sense of virtue, just to sustain their status and position.
One of the contradictions of the new economy is that the networked ability to search out the lowest price is really no more than a global means of identifying the most exploitative means of production and distribution. With electronic distribution costs close to zero, the pressure to lower the cost of any human interaction with value creation that can be standardised is immense in a global marketplace. Of course, wherever possible people will be replaced: with driver-less cars, drones, robots, or outsourced to cheaper locations. Even supposedly higher value functions, such as HR and finance, are now being outsourced, in so-called shared service centres in low cost locations around the world.
People are being squeezed financially and diminished morally, whether they be operational staff, with fewer rights, higher targets and kept in line through the fear of outsourcing, or Managers required to oversee this monstrous machine. Something that Marx could have described very well indeed is hardly something that we could proudly call the triumph of liberal capitalism, and we must hope is certainly not the end of history, as Fukayama infamously described the end of the cold war. Although The Conditions of the Customer Service Classes in Digital Land might be a good book title for our times…
A major part of management responsibility used to be mentoring more junior staff, not just as employees, but as civic people. Increasingly that responsibility is being discharged to professional coaches who focus upon the professional in good times and are there, on employees own tabs, when things are not so good. The reasons for this include the declining age of managers and the ambition of younger employees, who are in a hurry. However, intimately tied up with talent management, this is primarily about focusing upon the numbers earlier, faster and more efficiently. The job for life has died and so employers have no reason to even pretend to invest for the long term. Employment is now a purely transactional relationship, with less and less moral baggage to contend with in the search for bigger margins and lower costs.
It is not that globalisation is, in itself, a bad thing. However, just as occurred in the tail of the last economic long wave, during the 1930’s, the dehumanising consequences of rapid economic change re having social and political consequences. Our failure to come together and reject the pure hard HR model is symptomatic of our failure to learn from the 1930’s. Work needs to become more than just a source of income, with which to passively consume more branded goods. It needs to be a vehicle for each of us to grow as individuals and as a society. For the alternative: atomisation, widening inequality and the victory of utilitarianism over virtue will create a world so hollow that it will result in war. And not just a war for talent!
The seeds are already sown and the trends in place. A casual glance at the Brexit vote, the election of Trump, or the surge of support for LePenn are clear indicators of a rejection of the new order by those at the bottom of society. People want more than to be mindless consumers of whatever they can afford from the crumbs left from the digital pie. The zero hours part-timers are trying to tell the elites that they are sick of their reduced lives being used to bail out bankers. HR executives produce much hot air on the subject of leadership. Perhaps now is the time that they started to show some and remember that work can be a chance to express the development and growth of us, individually and collectively, as our output exceeds the sum of our parts. To do that means to go beyond league tables, targets and time clocks though and not be afraid to accept that the organisation of work is much a moral challenge as it is an economic one.