Monday, August 14, 2006

Why the model is collapsing….

In the last post I mentioned that being in a comfort zone is what drives our country’s (and to a big extent the world’s) economy.

Collapsing might be a bit strong for what I think is happening, but the model is certainly shifting.

Why?

The way I see it, the very folks who rely on the model (employers) are making it increasingly difficult for the average person to find, and remain in, the comfort zone (or the droneMatrix if you prefer).

Unlike previous generations, there’s no longer the real security, or even the perception, or expectation, of security, in a job that once provided it. More and more as I talk with folks I’m hearing phrases like “It’s all about the money now…”

In many cases these same people, as little as 5 years ago, were intent on working for, and retiring from, their current job, with their current employer. Today, despite being in the same job (in some cases) they no longer expect that will happen.

Employers, in a never ending quest for increased profits, have started treating employees like ‘inventory’. As if their employees are simply an asset to be managed, adjusted, and obtained at the lowest possible cost. In decades past, if there was a shift in the volume of business, employers would ‘hang on’ to employees so that they would have trained people available when things picked up again. I don’t see that as being the case any longer.

Today, with the availability of contractors, outsourcing, remote call centers, and temporary clerical help, the trend seems to be towards companies trying to build a “Just In Time” work force to coincide with their JIT inventory and equipment contracts.

Personally, I think it’s a disturbing trend.

On one hand I should be elated, right? It should mean there’ll be more work for me to choose from, more opportunities.

Not exactly….

Today, technology workers (in America) are among the most threatened. Low cost offshore programmers are regularly brought on, as needed, to fill slots that used to be solely an American worker’s role.

The work that’s left here is often good work, but in order to compete with offshore pricing the average hourly wage has been driven down for home grown developers.

Before you think this is going to descend into a rant about “offshoring”, let me set the record straight. Offshoring is here to stay, and for good reason. Despite the many barriers, language, distance, time zones, etc. offshoring allows a company to get certain things accomplished, quickly and at a lower cost than most other means.

So, with that as the reality, we (those of us affected by it) need to accept it, and adapt.

After all, we, and especially technology workers, made all of this possible. We built the internet, expanded the bandwidth, drove the demand for more and better connections worldwide. We got them. However, in expanding and improving connectivity for ourselves, we also constructed the infrastructure for others as well.

In the long run… a very good thing. In the short run, it’s certainly led to a considerable amount of instability in the US technological employment situation, while opening doors for tens of thousands of capable folks around the globe.

In the end, everyone will benefit from that. Those new folks will bring additional solutions, ideas and talent to the markets that they’re now able to reach. It’s the next 10 years or so that will be rocky, especially in America, and why many career IS/IT folks are now answering “No” to the question “Would you advise your child to look toward the IS/IT field for a career?”

The bigger picture, in my mind, is how it affects the economy. How folks are less comfortable. In being less comfortable they’re also less willing to sign for the mortgage, the car, the new washer/dryer and so on. They’ll be less willing to take on long term debt, choosing to wait, instead of getting it ‘now’.

If that happens, the economy, as we know it, will change. It will not be sustainable in its present form.

Some of you may recall that a month or so ago I was considering buying a new tractor. I decided not to. There were several ‘reasons’, but, as I really examined my decision over the past few weeks, I’ve come to the conclusion that it was uncertainty, not anything else, that led me to that decision.

You see, when I was thinking about that gig in CT, one of the thoughts that would creep into my mind was… “with the extra money I could….” One of the “I could’s” was “get that tractor”….

I still have use for it, and would use it every week; it’s not that I don’t have the need. It’s that I don’t want that ‘payment’ to deal with if I find myself between gigs. So, instead of that dealer selling me a $20,000 set up, and the everyone, the dealer, the manufacturer, the finance company all making some money… no one made any money.

When I had my last “job”, and I was fully immersed in the droneMatrix, I know I would have bought the tractor. It would have been a bad move (in retrospect), but I would have felt safe, and secure, in my decision then.

I’m betting that uncertainty about your employment has caused you to either delay, or abandon, a ‘big ticket’ purchase as well.

Leave me a note, let me know if I’m on the mark here, or off base somehow.

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5 comments:

Nina said...

I think you are on the mark. When things are so uncertain we change our lifestyles. Those that don't, have wound up in trouble. I have seen it in this area, with so many layoffs and people being caught with their pants down so to speak.

Jada's Gigi said...

I see a real cut back in our spending...we have a new house but we haven't furnished it yet..we want to get some wedding debt out of the way first and things like that, we are waiting to purchase a new vehicle to see what fuel cost do and what manufacturers come up with such as hybrids or ethanol vehicles......I am feeling the uncertainly in my job as well as are my children...two of which have been laid off recently in fields you would consider should be doing very well...I don't know where this is all going but we are really starting to try and take it easy on spending and be more careful than we have been.

Bill said...

Nina - You're right, not everyone makes changes... those are the folks who manage to stay in the zone... I'm more like you, I work pretty hard to live below my means, when ever I can.

Cheryl - Our's too... I'd love to get to the point where we either pay cash, or get by without it... we do it as often as we can... it's those major, unexpected things that usually catch us!!

I hope your family all finds even better jobs!!

Thank you both for the 'witness'... I like knowing I'm not out there by myself!!

Firehawk said...

Bill,

You're absolutely on the mark with your supposition. Before I leap in and buy something with a big price tag and payments attached, I always ask myself, "Do I really need this, or is it just something that I want?" If it's just want, I usually defer it. If it's really making things difficult, or the time seems ripe to take the jump, I'll do it, but I have to make sure that the outlay is going in the best direction possible. Generally, I'll look and say, "Well, if I go for this necessity now, I'll have it paid off in X number of months. Necessity number two can wait until then."

I think I'd do that, even if we were in the midst of a big boom time. I'm just too leery of getting caught short because I've taken too much on faith. Maybe this is why Depression kids always hoard things, even when times are good. I was raised by my aunt, who's a Depression baby, so that ideal must have rubbed off. In any case, I digress.

It seems like big business likes us on the edge of our seats. They like the idea that we're all living in fear of getting the axe. The whole culture of fear is very strong in the country now. Fear is the tool of choice for motivating us to do just about anything: work, vote, buy, sell...

I wish I had a good solution for it, but I'm just one of the edge players, seeing what's going on but unable to alter things a whit.

Good post, Bill.

Bill said...

Firehawk - We go through similar decision processes... most things are, in the end, wants... but I definitely 'want' some items more than others!

There's definitely a "Depession Era" factor in my life as well, mostly from the values my garandparents imparted to my parents, and to me. Those folks really understood how to differentiate between need, and want.

I was thinking about business wnating us 'on the edge' as I was writing that last post... I know I've got a post around that thought building as well!

In the grans scheme of things, we're al just 'edge players' bro... I do believe though, that we can make a difference in our own lives, and, in doing so impact others. If enough of us make changes... things in general will also begin to change, or at least I believe it will!