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Those interested in Labor Turnover may be interested in an article I
recently published in Jigyasa on Labor Stability. It can be found
here: http://home.comcast.net/~evansmgmtutor/wsb/labor.stability.pdf

The abstract is:

In nearly all of the research on labor turnover there has
been little or no focus on a second aspect of worker mobility: labor
stability. By labor stability we mean the proportion of workers who
have remained with the organization for a given period of time
(usually one year). In this paper we show how different combinations
of stability and turnover can co-exist and that turnover has quite
different causes and consequences depending on the labor stability of
the organization or its sub-units.

Martin G. Evans

Professor Emeritus, Rotman School of Management, University of Toronto.

URL: www.rotman.utoronto.ca/~evans blog: http://martingevans.blogspot.com/

Former Co-Editor, M@n@gement: http://www.dmsp.dauphine.fr/MANAGEMENT/
WEB Editor, Academy of Management Journal: http://aom.pace.edu/amjnew/

The test of our progress is not whether we add more to the abundance
of those who have much; it is whether we provide enough for those who
have too little.
Franklin D. Roosevelt

[President George W. Bush] cannot mourn but is a figure of such moral
vacancy as to make us mourn for ourselves.
E. L. Doctorow.

As we enter the recession, it may be useful to revive a concept that has not
been used in our research for many years: Labor stability.

This is the proportion of the workforce that has survived for a whole year
in the same firm. It is different from labor turnover and a given level of
turnover has different implications depending on the level of labor stability.

I discuss this in my piece on labor stability:

http://home.comcast.net/~evansmgmtutor/wsb/labor.stability.pdf

The paper also contains most of the few references to labor stability which
range back to the early part of the last century.

Hello Martin and Keith (and other OB list-serve members),

Please forgive the half-baked ramblings of a PhD candidate, but I'd
love to add my $.02 to this discussion. What you have both just
touched on is a curious (and deep-rooted) set of assumptions at the
heart of our current economic situation, and the very direction of our
field.

Martin is suggesting we measure "labor stability" at a macro level,
which is a measure of survivability for employees within a firm (which
sounds like a good measure of long-range planning, economic health of
the firm, and predictability of an industry or market). What Keith is
arguing is that a certain % of the workforce can be considered
"dispensable", to the extent to which a firm can survive without them.
While this sort of "lean production" and "just in time" model might
work well for supply chain management, I think we might butte-up
against both employee well-being and long-range economic health if
firms are so quick to divorce their own fate from that of their
employees.

Research on strategic HRM suggests that firms able to plan ahead,
hire selectively, train heavily, offer incentives for performance, AND
OFFER GUARANTEED EMPLOYMENT outperform those that do not adopt these
practices as a package. Meanwhile, firms that conduct firm-wide lay-
offs with the ebbs and flows of the stock price lose intellectual
capital, employee commitment, and reputation.

From a theoretical perspective, firms that separate their
employees into a "core" and a "cushion" have likely failed to
incorporate strategic HR into their business practices (and helped
establish the myopic business model that has created our current
economic and unemployment crisis). I think Martin's "re-introduction"
of labor stability is an important contribution, and speaks to why the
Canadian $$ is passing our own so quickly. Thank you for directing us
to this paper, Martin, and I hope that many of us take it to heart.

best,

Keith Leavitt

On Feb 24, 2009, at 5:20 PM, Keith Morgan wrote:

> Having made it thru more than 31 years of business ups and downs.
> I would suggest a slightly different perspective.
>
> A business work force is made up of two components. The first is the
> core component, which is the people required to take the business
> through the down cycles. The second component is the cushion work
> force, which helps takes the business through the up cycles. During
> the up business cycle, employees can actual earn a slot in the core
> component of the business. In addition, the business felt it was
> their duty to release employee in a reasonable time frame (Less than
> 5 Years), if they did NOT make a reasonable contribution to the
> business. If the business has anticipated the business cycles
> correctly, then there will be labor stability for the core component
> of the business.
>
> Martin, I am still around and reading your emails,
>
> Keith Morgan
>
>
> ----- Original Message -----
> From: "Martin Evans" <martin.evans@UTORONTO.CA>
> To: <OB@AOMLISTS.PACE.EDU>
> Sent: Tuesday, February 24, 2009 5:19 PM
> Subject: Labor Stability
>
> As we enter the recession, it may be useful to revive a concept that
> has not
> been used in our research for many years: Labor stability.
>
> This is the proportion of the workforce that has survived for a
> whole year
> in the same firm. It is different from labor turnover and a given
> level of
> turnover has different implications depending on the level of labor
> stability.
>
> I discuss this in my piece on labor stability:
>
> http://home.comcast.net/~evansmgmtutor/wsb/labor.stability.pdf
>
> The paper also contains most of the few references to labor
> stability which
> range back to the early part of the last century.
>
>
>
> No virus found in this incoming message.
> Checked by AVG - www.avg.com
> Version: 8.0.237 / Virus Database: 270.11.3/1969 - Release Date:
> 02/24/09 06:43:00

I did some work on outsourcing and cited Charles Handy and his "shamrock organization," where he discussion the notion of non-essential tasks. Of course, business started to outsource the tasks that could be performed by outsiders without any loss of key competencies for the organization, but they are outsource much more than that today. Cost! Cost! Check Handy's book "The Age on Unreason (1990).


Thanks,

Ivan



-----Original Message-----
From: Organizational Behavior Division Listserv [mailto:OB@AOMLISTS.PACE.EDU] On Behalf Of Keith Leavitt
Sent: Wednesday, February 25, 2009 12:10 AM
To: OB@AOMLISTS.PACE.EDU
Subject: Re: Labor Stability

Hello Martin and Keith (and other OB list-serve members),

Please forgive the half-baked ramblings of a PhD candidate, but I'd
love to add my $.02 to this discussion. What you have both just
touched on is a curious (and deep-rooted) set of assumptions at the
heart of our current economic situation, and the very direction of our
field.

Martin is suggesting we measure "labor stability" at a macro level,
which is a measure of survivability for employees within a firm (which
sounds like a good measure of long-range planning, economic health of
the firm, and predictability of an industry or market). What Keith is
arguing is that a certain % of the workforce can be considered
"dispensable", to the extent to which a firm can survive without them.
While this sort of "lean production" and "just in time" model might
work well for supply chain management, I think we might butte-up
against both employee well-being and long-range economic health if
firms are so quick to divorce their own fate from that of their
employees.

Research on strategic HRM suggests that firms able to plan ahead,
hire selectively, train heavily, offer incentives for performance, AND
OFFER GUARANTEED EMPLOYMENT outperform those that do not adopt these
practices as a package. Meanwhile, firms that conduct firm-wide lay-
offs with the ebbs and flows of the stock price lose intellectual
capital, employee commitment, and reputation.

From a theoretical perspective, firms that separate their
employees into a "core" and a "cushion" have likely failed to
incorporate strategic HR into their business practices (and helped
establish the myopic business model that has created our current
economic and unemployment crisis). I think Martin's "re-introduction"
of labor stability is an important contribution, and speaks to why the
Canadian $$ is passing our own so quickly. Thank you for directing us
to this paper, Martin, and I hope that many of us take it to heart.

best,

Keith Leavitt

On Feb 24, 2009, at 5:20 PM, Keith Morgan wrote:

> Having made it thru more than 31 years of business ups and downs.
> I would suggest a slightly different perspective.
>
> A business work force is made up of two components. The first is the
> core component, which is the people required to take the business
> through the down cycles. The second component is the cushion work
> force, which helps takes the business through the up cycles. During
> the up business cycle, employees can actual earn a slot in the core
> component of the business. In addition, the business felt it was
> their duty to release employee in a reasonable time frame (Less than
> 5 Years), if they did NOT make a reasonable contribution to the
> business. If the business has anticipated the business cycles
> correctly, then there will be labor stability for the core component
> of the business.
>
> Martin, I am still around and reading your emails,
>
> Keith Morgan
>
>
> ----- Original Message -----
> From: "Martin Evans" <martin.evans@UTORONTO.CA>
> To: <OB@AOMLISTS.PACE.EDU>
> Sent: Tuesday, February 24, 2009 5:19 PM
> Subject: Labor Stability
>
> As we enter the recession, it may be useful to revive a concept that
> has not
> been used in our research for many years: Labor stability.
>
> This is the proportion of the workforce that has survived for a
> whole year
> in the same firm. It is different from labor turnover and a given
> level of
> turnover has different implications depending on the level of labor
> stability.
>
> I discuss this in my piece on labor stability:
>
> http://home.comcast.net/~evansmgmtutor/wsb/labor.stability.pdf
>
> The paper also contains most of the few references to labor
> stability which
> range back to the early part of the last century.
>
>
>
> No virus found in this incoming message.
> Checked by AVG - www.avg.com
> Version: 8.0.237 / Virus Database: 270.11.3/1969 - Release Date:
> 02/24/09 06:43:00