Thursday, September 23, 2010

Jobs for Life

Jobs for life ?  A quaint and obsolete concept ? Not even dinosaurs would think of such an idea ; Right? Don't snigger. No less a company than Siemens has done just that in Germany.

My first reaction was, of course, what on earth has Siemens done. Has it simply bowed to the pressure of the mighty German trade unions ? The power of trade unions in Germany is well known. The country has adopted a model for a cosy relationship between workers and managements. Confrontations, when they come, are often less intense than might be seen in other parts of the world. Wages are high. Its not easy to lay off workers.And yet Germany remains a massive industrial success; it remains the largest exporter in the world neck to neck with China. 

The arguments for flexibility with work force are well known. But why has Siemens opted for giving jobs for life - and that too in high cost Germany ? There must some arguments on the other side of the debate as well. There surely are.
If we turn around the people question to say that employees are "customers" and the employer must give the customer what she wants, then we start  from a different point of view. In the India and China  of today, the employee does not want lifetime employment because of the opportunities that abound. Its a moot point that 30 years ago, in both these societies, lifetime employment would have been a very attractive proposition.  But there are many societies today where lifetime employment would be a very desirable proposition. Worth taking a smaller salaray for the promise of a lifetime employment.
The workforce is not a homogeneous mass. Just like we segment customers in marketing, we must segment the workforce population too. There is a segment that will trade off higher wages for stability. If attracting that segment is interesting for the employer, then why not ?? Take a combination of lifetime employment, lower wages, long notice period for employees quitting, employer ability to lay off on grounds of non performance or indiscipline, and you have package not to be sneered at. It will also force employers to take long term views on manufacturing - all too often these days companies set up factories knowing fully well that they will shut them down in 5 years. World supply chains are not all that dynamic - witness the continued manufacturing might of Germany for the last 60 years.

Human motivation is not driven solely by fear. Its not just the threat of losing one's job that makes you work harder. Life gives you a perfect example of this. Its called parenthood. Every parent (alas, bar a few exceptions) would make seemingly irrational sacrifices for his child. Commitment and permanency are not dirty words in life. Neither should they be in business.