It's your mindset that matters now

Flexibility is a key word in today's job market, says Roger Trapp

In the City, it is not just the markets that are changing rapidly. The financial, professional and business services people who work there are radically reshaping the notion of work.

Or so says a report issued in advance of a conference to be held in London next Wednesday. The document, Tomorrow's People, is the work of the London Human Resources Group, an independent network of senior personnel professionals that aims to produce and provide information, analysis and details of good practices in the human resources area.

And the organisation believes that the most important finding in this latest project is that "new ways of thinking are more important than new ways of working in achieving the necessary flexibility in today's workplace". It claims that by concentrating on new forms of working, public discussion of the flexible labour market has ignored an important requirement from the workplace that is already developing today and will continue to do so in the future - "mindset flexibility".

This has arisen, says the report written by Amin Rajan and Penny van Eupen of the Centre for Research in Employment and Technology in Europe, as a result of the continuation of forces that began in the financial services industry and related businesses back in the 1980s. Until then, there had been mass production, with few suppliers operating in a command- and-control environment, and where the labour flexibility was negligible. In the 1980s, production began to become decentralised with suppliers becoming remote and labour flexibility inching up to a "low" rating. The current decade has been characterised by the advent of lean production, in which management has been delayered, there has been limited outsourcing and - as a self-employment mindset has developed - labour flexibility has risen to "medium".

"On present reckoning," says the report, "in the next decade, the process is expected to evolve into the agile production associated with a virtual organisation - one in which companies concentrate on their core competencies, build extensive networks of alliances and outsource all non-core activities."

So what is this self-employment mindset? From an individual's point of view, say the authors, it is about coming to terms with "three harsh facts of life" about the employer-employee relationship in financial services. First, though the culture of jobs for life has ended, many jobs remain secure because security is now based on performance rather than on paternalism.

This helps to explain why - for all the talk of the abandonment of the "psychological contract" between employers and employees - many people insist that the only thing that has changed is that they work harder and longer. As the report points out in its second "harsh fact of life", in order to retain their jobs, staff have to treat their employers as customers of their labour services, provide these services when and where they are needed, see themselves as self-employed people keen to retain these customers' business, be rewarded in accordance with their individual contribution and acquire those progressive skills that improve their employability inside and outside their current organisations.

Finally, employees need to realise that, although their employers will provide training that helps with the acquisition of progressive skills, substantive responsibility for development will rest with themselves.

The arrival of this self-employment approach is being seen as important at the moment because of the coincidence of various social, economic and cultural factors.

In the social area, the increasing numbers of women in paid work and the trend for more people to work longer hours is creating peaks of demand for financial services at times hitherto regarded as "unsocial" - that is, evenings and weekends. Since it is not cost-effective for organisations to cover this demand through overtime payments, on the grounds that customers will only pay the same price for a service no matter at what time of day they purchase it, there is a need for working days to be adapted.

On the economic side, competition is increasing, with new entrants arriving from a variety of fields, notably retailing, and enjoying the benefits of well-known brands and fresh starts. Internationally, economic and monetary union poses a threat as well as an opportunity; London could gain from the expected shake-out in the bonds and foreign exchange markets, but, as the report points out, "nobody is betting on it".

Culturally, all the institutions involved in this area - from banking and insurance, through law and accountancy to software services - are seeking to change their corporate styles to make them more entrepreneurial. For the individual, this means ceasing to be a loyal servant and becoming instead a committed worker, say Mr Rajan and Ms van Eupen.

Lean production and its follow-on developments also have huge ramifications for jobs. In the past, the City has actually increased its staff numbers - in the 1980s, by more than 60,000 - as politicians and others have pointed to the "new reality" of Britain becoming less of a manufacturer and more of a services provider. But in this decade alone, says the report, about 150,000 jobs have been lost, across the country, largely as a result of consolidation and contractions in the banking, insurance and building society sectors. The next three years are expected to see a further contraction of the order of 20,000 jobs.

However, it is not all bad news. It is expected that the number of knowledge workers - including treasury and investment specialists, information technology experts, accountants and lawyers - will increase by 130,000 across the country by the beginning of the new century. As a result, the contraction in traditional managerial and clerical functions will be largely offset.

But in order to achieve the transition from lean production to agile production, organisations need to overcome more obstacles than was at first realised. For instance, many employers are seeing that new reward systems, based on performance, are not working because people either see them as one-sided deals or are not as motivated by money as was thought. Indeed, many workers remain bewildered by what is going on - not least how organisations can value some employees and not others.

The report calls for action on several fronts to counter the opposition. Organisations need to explain the logic of lean production and its aftermath, so that they can eradicate the climate of fear that - rather than encouraging entrepreneurialism - means that enterprise and initiative are held back. They also need to deliver on the promise of employability - preparing those who cannot be redeployed for new careers, for instance.

Meanwhile, society has to change, with education and training taking account of the new requirements in order to help people develop "those personal traits and core skills that can serve as a foundation for the requisite mindset".

Tomorrow's People, the City Conference, will take place at The Gibson Hall, London on Wednesday, 8 October, from 9am to 3.30pm. Details from Focus Central London; tel: 0171 896 8434.

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