The Effect of Recessions on Employer/Employee Relations

According to Tammy Erickson, a McKinsey Award-winning author, recessions have a significant effect on the relationship between employers and employees.

• The recession of 1981 introduced the idea of a “layoff.” Prior to this recession, job security was assumed unless you were dismissed for poor performance.
• The recession of 1991 created a shift in people being employees to becoming contractors. According to Ms. Erickson, this “began our evolution to a free agent nation.”
• The current recession is introducing “furloughs,” unpaid time away from work, sometimes for a predetermined amount of time.

How popular are furloughs? According to a Hewitt Associates survey of 518 U.S. firms, a full 70 per cent have implemented or were considering implementing furloughs. According to Ms. Erickson, “This practice is reframing, perhaps even severing, the idea of “full-time” as many of us have understood it for years.”

Ms. Erickson summarizes the effect of the past three recessions on employer/employee relations as follows:

“(1) you don’t have a job for life, to (2) you may never find full-time work with one employer, to now (3) even a full-time job is really only a contractor job in disguise.”

An excellent article. (RN)

How the Recession Is Changing Talent Management | The Washington Post | Tammy Erickson | 23 June 2009