COMMENTARY

Challenges ahead as corporations evolve

As technology replaces people where does that leave corporate structures and remaining employees?

Being a member of the boomer generation, I rode the wave of economic prosperity that blossomed across our nation beginning in 1945 through the 1990s.  I began working in the early days of the information technology industry and still do today.  My career allowed me to witness first-hand the diffusion of technology across our society. 

While technology created many jobs over the years, it has also replaced jobs in many industries.  There are numerous occupations that have been and continue to be replaced by technology: retail sales, cashiers, office clerks, customer service representatives and sales people, bookkeepers and accountants, secretaries, stock clerks and order fillers, general managers and first-line supervisors, and many more.  It seems that as technology pervaded our economy so has job dislocations.  

People are aware of the impact of robotics on blue-collar jobs since the 1970s, which still occurs today.  Lesser perceived is the ongoing impact of artificial intelligence based applications that are replacing white collar workers and will continue to do so.  Companies continue to reduce the number employees through the deployment of technology.  However, there are other issues at play.

Corporations Rule!

When I first heard of Gerald Davis’ (no relation) new book, The Vanishing American Corporation (2016), I was quite skeptical of his thesis.  How could he say such a thing?  After reading his 219-page book, I am convinced he is correct.

Davis provides a historical and social context for the rise of corporations since the late 19th century through today, including the beginning of their demise, from a total employment perspective, in the 1970s.  The aggregate employment of corporations is declining dramatically as is the social contract between corporation and employee. Think pensions, pay raises, benefits particularly health care, professional training and development, and more.

I will not repeat his key points, which are numerous and haunting.  One of his themes is how companies today have a laser focus on customers and their perceived markets, and how this phenomenon adversely affects employment. 

In our industry, companies’ fortunes and employment levels are driven by contract awards and winning or losing re-competes.  There can be 5, 10 or more years of growing revenue and profit, then years of flat revenues at best.  Employees’ economic well-being rides these contract cycles which are well known.  Corporations, especially in our industry, make frequent financial decisions, some small, some large, that impact employees’ lives.

Corporations can (1) decide to hire someone or lay them off, (2) pay a higher wage or not, (3) grant a pay raise or not, (4) open or close a plant, (5) locate a plant in the United States or not, (6) increase or decrease healthcare benefits and co-pays, (7) allow employees to work 40 or more hours a week or not, (8) offer pensions or not, (9) offer meaningful 401(k) matches or not, (10) install technology across the enterprise that lessens employment levels or not, (11) offer employees professional development and certification training or not, (12) offer family leave or not, (13)or hire a full-time employee or one or two temporary workers, or (14) re-train employees facing job dislocations or not.

One well known corporation, in our industry, is retraining i.e. re-tooling its middle management ranks to make sure its long-term employees have current knowledge and skill to allow them continue to contribute to the company’s success and innovation. 

Wow!  This company is not taking a business-as-usual attitude to the well-being of employees that have given the company over 20 years of their lives.  What other ways exist for companies in our industry to strengthen the productivity and morale of their work force?     

Corporations have immense power when it comes to the lives of their employees and their families.    

Time for New Thinking

It is time for corporations to take a pause and establish innovative partnerships with government, unions, non-profits, and education to allow us as a society to move forward together.  We, as employees trying to secure our families’ well-being, can no longer afford silo thinking from our business leaders. 

Many people today have given up looking for work; many are permanently underemployed. When people do not work they have no income; they pay no taxes; they make increasing claims on an overtaxed public safety net; they will purchase less goods in our consumer-driven economy.

Martin Ford’s book, The Lights in The Tunnel: Automation, accelerating technology and the economy of the future (2009), thoughtfully expresses these complex issues and their long-term impact.  His proposed way forward balances myriad interests.  Implementing Ford’s approaches will require corporations to cooperate with government, education, unions and non-profits in innovative ways. 

Implementation of new ideas will require senior management and boards of directors, to embrace brand new partnerships, think strategically and creatively to achieve long-term mutual success.  It means putting the well-being of all of us at the forefront while not neglecting their responsibilities to shareholders and markets.

About the Author

Robert Davis is a 35-year veteran of the government IT marketing and has held positions large and small firms in areas such as marketing and sales, program management, business development and market development. He is an expert in business development, marketing, and management.

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