Commentary: The Issue Is Employment, Not Employability

Amid our winter of worker discontent, a new buzzword found its way into the corporate lexicon: employability. As the media fixated on layoffs, gold-plated CEOs, among them Joseph T. Gorman of TRW and Randall L. Tobias of Eli Lilly & Co., dropped employability into their speeches. The Business Roundtable and the National Association of Manufacturers quickly embraced the notion, as did the Clinton Administration. "It's good business," said Vice-President Al Gore.

Employability begins with the premise that any guarantee of job security is anachronistic. Instead, a new sort of "contract" has emerged between employer and worker. Employees are responsible for their career development and for acquiring the skills they need to keep a job or land a new one. Companies are obliged to provide career resources and opportunities for training. If and when layoffs come, employees have an escape route.

SELF-RELIANCE. The idea rings appealingly of Emersonian self-reliance: Individuals who take an interest in their own advancement will thrive. Companies that invest in training, likewise, will realize productivity gains. In fact, "leading-edge companies have been doing a lot of this work for a long time," says Curtis E. Plott, president of the American Society for Training & Development.

But as a fix for economic anxiety, employability misses the point. By declaring upheaval unavoidable--and requiring employees to prepare for it--companies unburden themselves of any commitment to provide stable jobs. "What employers are articulating is that they are no longer going to be responsible for their part of the bargain," says Peter D. Cappelli, a professor at the University of Pennsylvania's Wharton School.

This is not a call for an end to layoffs or for legislation to restrict companies' ability to hire and fire. Global competitiveness, and so long-term job creation, requires flexibility. But Corporate America has abandoned too easily the idea that keeping people in decent jobs is both important and possible. Donald F. Hastings, CEO of Lincoln Electric Co., and UAL Corp. Chairman Gerald Greenwald, said as much at President Clinton's White House CEO-fest on corporate responsibility May 16. "Everyone [here] is assuming that layoffs are inevitable," Hastings told the assembled brass.

To be sure, thriving companies such as Lilly, Hewlett-Packard, and Sun Microsystems have successfully used employability to feed morale and lift performance. Each has established career-resource centers and placement services and has funded training that allows employees to pursue career goals, even if unrelated to a current job. "All of a sudden, creativity and motivation go way up," says Kenneth M. Alvares, vice-president for human resources at Sun.

No one knows, though, whether employability programs actually help workers adjust in times of tumult, whether participants find better-paid work faster. The payoff for employers, too, is fuzzy and distant enough that many efforts collapse when the budget knives come out. Apple Computer Inc., for one, largely abandoned career development after sluggish sales growth forced restructuring in 1994. "Just as [the human resources staff] would gear up, they'd be hit with a layoff," says an executive who worked on the program. "Now, it's a mess."

NAIVE? Companies such as Lincoln Electric and Nucor Corp. propose a different solution to economic turbulence. They provide consistent employment, no matter what, by working and managing better. "Thinking ahead and having creative solutions for when there is a downturn is what management is all about," Hastings said. Utterly naive? Ask Pella Corp., a 3,500-employee window manufacturer in Pella, Iowa. Executives overhauled operations in 1994, cutting production times by two-thirds with no layoffs. "No one worried about losing their job, so [employees] created change instead," says consultant Anand Sharma, who advised the company.

Certainly, better skills and continuing career development will make workers feel better about the future. "If we tried to cut back on it, our hourly workers would kill us," says just-retired Chairman James R. Houghton of Corning Inc. By all means, keep the training, which ultimately is what makes business competitive. But employees would feel better, and be more productive, knowing that their employer won't show them the door at the first sign of trouble.

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