"The new paradigm is a widespread recognition that there are big cost savings if you do not have to carry workers and can get rid of them quickly when there is not enough for them to do," said Peter Capelli, a management professor and co-director of the Center for Human Resources at the Wharton School of the University of Pennsylvania. "That is one side of the equation. On the other side, there was the growing realization in the boom years of the late 1990s that even in tight labor markets, you can get workers quickly enough."
What makes this work-force flexibility possible is the rise of temporary and contract workers. A soon-to-be released survey of more than 3,000 companies conducted by Capelli with the Census Bureau found that on a typical day these companies -- a cross-section of Corporate America -- used temps and contract workers to meet 12 percent of their manpower needs. On peak days, their use reached 20 percent.
Until the 1970s, temps and contract workers hardly existed, yet they now account for nearly 5 percent of the nation's work force, a pliable buffer that is currently being squeezed.
As US companies negotiate this new employment terrain, they are trying to make employee departures less of a surprise. "In the last several years, there has been a movement toward greater sharing of a company's ups and downs," said Michael Burniston, a principal at William M. Mercer Inc, a management consulting firm. "Managers now issue corporate performance scorecards, and in-house briefings for employees are more frequent. That raises awareness and in a strange way prepares employees for what might happen to them."
They also find themselves increasingly encouraged to operate as "free agents," a popular phrase among consultants. "Employees are developing the view that their only job security in the future must be based on their ability and their competence," Howard said, "and not on keeping a job at some particular company."
The free-agent message, often ridiculed in the 1990s, appears to be gaining acceptance. The Clinton White House endorsed the concept and pushed companies to spend more on worker training, so that people could develop skills to pursue a career, moving from job to job if necessary.
The Bush administration has a similar approach. Rather than emphasizing job security, it argues that in a strong economy people will more easily segue in and out of jobs.
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