A Free-Agent Outlook Can Hurt Your Career

In his book “Free Agent Nation” (Warner Books, 2001), Daniel H. Pink focused on the more than 30 million Americans who, for a variety of reasons, have abandoned traditional employment and the idea of a job that lasts a lifetime.

The free-agency movement promotes the notion that — because the loyalty contract between employers and employees has weakened in recent years — workers are best served by becoming free agents, either working as independent contractors or by changing employers when an opportunity arises.

Most American workers have come to agree with free agency. A new study of nearly 6,000 North American workers by New York consultant Towers Perrin found that only 11% find it appropriate to spend 15 or more years with a single company. While17% chose one to five years as sufficient, 12% found five to 10 as optimum. An overwhelming 60% of those polled no longer believe a suitable time limit exists.

An article in Fortune magazine last year recounted a meeting between a headhunter and a 39-year-old engineer laid off by Nortel Networks Corp. After a quick look at his resume, the headhunter said: “You’ve been at Nortel for 15 years. What are you, a lamppost?”

As head of human resources for the nation’s fourth-largest employer, this concerns me because I think the breakdown in workplace loyalty hurts both employers and employees in the long run.

When I joined United Parcel Service as a part-time clerk in New York City in 1969, the unspoken contract between employer and employee was still pretty much intact. In exchange for job security and a career path, employees “agreed” to build a career with an employer.

United Parcel Service, Inc. (UPS) is the world’s largest package delivery company and a provider of supply chain management solutions.[4] The global logistics company is headquartered in Sandy Springs, Georgia, which is part of the Greater Atlanta metropolitan area. UPS delivers more than 15 million packages per day to more than 7.9 million customers in more than 220 countries and territories around the world.

So much has changed.

U.S. companies have announced several hundred thousand job cuts in the past few months. The tragedy of Sept. 11th and its aftermath have surely contributed to many of these furloughs.

But the tendency has been to lay off employees even during good times. Last year, Investor’s Business Daily reported that between October 1998 and October 1999, when the Nasdaq Composite Index was going through the roof and the economy was humming, more than 800,000 employees lost their jobs.

Companies owe their shareholders a good return on their investment, and Wall Street is quicker than ever to punish companies that don’t keep earnings up and costs down. But at what price to the American worker?

“Companies are finding that they can achieve their goals by maintaining a certain level of fear in the work force and that leads people to work hard,” Massachusetts Institute of Technology economist Paul Osterman told the New York Times in August.

Is it any wonder, then, that career experts recommend a free-agent mentality?

Don’t get me wrong. I’m all for the entrepreneurial spirit, and for taking charge of your career. But when employees hop from job to job, doing the same kind of work for just a little more pay, free agency harms employee and employer alike.

The negative impact of job hopping on employers is fairly obvious. Experienced employees who know a company’s products, services and customers will be in short supply.

The corrosive effect of free agency on employees is more subtle, yet just as profound. Research by Henry Farber, an economics professor at Princeton University, indicates that leaving your job — voluntarily or involuntarily — can result in “substantial and persistent earnings loss.”

But we can’t simply return to the days of the “job for life” and pretend that free agency isn’t happening. The employment environment has changed too much.

What we need is a Declaration of Inter dependence, an acknowledgment that employees and employers owe more loyalty to one another than we’ve demonstrated in recent years. Both parties need to agree on a set of truths that we hold to be self-evident. With apologies to Thomas Jefferson, let’s lay out four principles:

No. 1: Employees should be permitted to be free agents inside corporate walls.

Who says an employee has to leave a company to try new jobs or develop new skills? Smart companies not only allow employees to move around the organization, they encourage it. By trying different jobs and taking on diverse assignments, employees come to understand all segments of the business and then can contribute to the organization in bigger ways.

If talented employees can’t freely move around and move up, they’ll likely move out.

No. 2: Employees deserve a workplace environment characterized by trust and teamwork.

Employees in many big companies may spend as much energy playing — or being played by — corporate politics as they do on their actual job. Using explicit methods to measure performance, and then tying rewards to that performance, can help create a more equitable, less political workplace.

Here’s another strategy: emphasizing teamwork rather than anointing rising stars. In 1945, UPS founder Jim Casey said: “One measure of your success will be the degree to which you build up others you work with. While building up others, you build up yourself.”

There’s another payoff. In a study of 7,500 U.S. workers, Watson Wyatt Worldwide found that over a three-year period, companies where employees trusted top executives posted shareholder returns 42% higher than companies where distrust reigned.

No. 3: Employers should offer employees a reasonable sense of security.

Employers should consider layoffs only as a last resort. Sometimes, layoffs are the only option for companies that are bleeding — or during extraordinarily tough economic times. We’re currently seeing this in the airline and travel industries.

We know the kind of devastation, insecurity, cynicism and breakdown in loyalty that layoffs engender. According to Aon Consulting’s Loyalty Institute, which measures American workplace attitudes, companies that cut their work forces can expect a sharp drop in commitment from employees who are left behind. They are less productive and less satisfied with their benefits and have less pride in their organizations.

But what about the responsibilities of employees to their employers? That’s next.

No. 4: Employees should seek a good fit with an employer and commit to the goals of the organization.

While I was dining with undergraduate business students at an Ivy League university a few years ago, the conversation turned to the students’ career aspirations. One told me a professor had said that if the students didn’t have nine jobs by the time they were 35, they were doing something wrong. I’d suggest that the professor is mistaken.

Employees should search hard for an employer whose values, goals and working style most closely fit theirs. Then they should commit themselves to doing the best job they can and to being flexible and willing to take on new jobs and new assignments. They should commit to life-long learning by taking advantage of training opportunities and being eager to learn new ways of doing things.

When employees make these types of commitments, career advancement most likely will take care of itself. So, too, will job satisfaction and a sense of fulfillment.

By admitting that they need one another, employers and employees at any company can create — or reinforce — an alliance in which they can carry out these principles.

Career success and workplace loyalty don’t have to be mutually exclusive within any company. There are still a few of us happy lampposts around to prove that.

By Lea Soupata