Many leading figures predicted that September 11 would trigger a permanent
change in the relationship between employers and staff. One year on, Nic Paton
looks at five key areas and asks how much has changed?
Workers and political and business leaders will pause this week to remember
the estimated 3,000 people who died as a result of September 11. For employees
around the world, the shock of the attacks on the World Trade Center and
Pentagon struck deeply. Whether it was flinching every time a plane flew low
overhead or taking a deep breath as the lift whisked them up to their high-rise
offices, the memories of that day were never far from the surface.
The view of many during the immediate aftermath of September 11 was that the
world would never be the same again. There was also a belief that its events
would permanently change the world of work.
Employees would re-assess their work-life priorities, what they wanted out
of work and their relationships with their managers, while on a practical
level, people would no longer be so willing to fly on business and
organisations would become far more security conscious.
But, a year on, has any of this actually happened? At least one senior HR
executive of an organisation that lost hundreds of employees in the Twin Towers
believes not. "There was a change in people’s attitudes for about three or
four months, but now it is pretty much the same as before," he says.
"There will be a memorial service for staff that were lost, but I do
not think September 11 fundamentally changed the company at all."
The intense grief and reluctance to travel have dissipated, explains Max
Reid, senior vice-president of HR at US video and data broadcasting business
PanAmSat.
"People’s values and priorities are influenced by these horrific
experiences, but do not deter their will to accept, adapt and move on. The
workplace is much the same today as a year ago," he says.
But others are more optimistic that the attacks have led to changes that
have either already become embedded in workplace culture, or will be in the
future. Personnel Today examines five key elements of the working environment
to see if the significant changes predicted last year have come true.
Meaningful work
In the aftermath of September 11, organisations were told they would need to
rethink how they motivated their employees. The events of that day left many
re-assessing their lives and careers.
A survey by career consultancy Penna Sanders & Sidney published two
months after the attacks found that nearly two-thirds of workers said they
would change career if they could, with one in eight wanting to change to a
more personally fulfilling, worthwhile or meaningful job.
"People want to sit down more and talk about their future. They want to
talk about whether they are on the right track. HR has borne the brunt of those
conversations," says Steve Harvey, group director of people, profits and
culture at Microsoft UK. "The use of mentors has increased markedly since
September 11," he adds.
It has also been recognised that if you want to get more out of your
workers, you have to offer them something meaningful in return, says Paul
Pagliari, HR director at Scottish Water.
"It is an emerging trend, but it was there before September 11,"
he says.
The difficulty in all this has been the economic impact of September 11 –
knocking an already fragile US economy badly off track, with all the global
implications for jobs and incomes that brought with it.
Dave Patel, manager for workplace trends and forecasting at the Society for
Human Resource Management in the US, points out that worries over stock
market-linked pensions and job security have made it less likely people will
argue for a change of role or to downshift.
"If there had been a much stronger economy, people may have felt they
could make those changes. But job security has played a huge part in preventing
people from doing that," he says.
Leadership
Five weeks after the attacks, a MORI poll revealed that 85 per cent of
employees did not feel a strong confidence in their employers’ leadership,
compared with 68 per cent prior to September 11.
Delegates at the CIPD’s 2001 national conference in Harrogate, which took
place at much the same time, heard Robert Kaplan, professor of leadership at
Harvard Business School, explain that employers were now going to have to
involve staff much more in the aims of their businesses.
One of the changes wrought by September 11 has, indeed, been a re-assessment
among employers of the importance of human capital, says SHRM’s Patel.
"Everyone talks about the fact that their biggest economic asset is
their people, but unfortunately, it takes something like this for people to
realise it really is true," he explains.
"CEOs are beginning to pay attention to the importance of HR," he
adds. "They will lose the employees they need to lose to get through the
tough times, but they pay far more attention to weeding out the lower
performers while keeping the talent," he adds.
Microsoft, for instance, has been encouraging managers to speak to employees
to explore the relationships and psychological contract between them.
"Most leaders never say ‘here is what we want, here is who I am and what I
do’," says Harvey.
Some even believe there is a direct correlation between the fierce anger of
ordinary employees to the corporate scandals of Enron, WorldCom and others, and
September 11.
The greed of bosses seen to be cashing in as the scandals broke has jarred
with the dignity and courage of the rescue services and ordinary employees on
that day, argues one anonymous HR manager in California.
"To juxtapose the recent Enron-type scandals against the heroism of
September 11 is telling," Harvey explains.
Lance J Richards, managing director of US HR consultancy Suddenly Global,
believes there has also been a greater recognition in the US that the world is
a small place and business leaders have a prominent part to play within it.
"HR has an obligation as the leaders and managers of human capital to
help people understand what globalisation means and how to manage it
correctly," he says.
Work-life balance
While demands for more work-life balance were gaining momentum well before
September 11 – indeed, legislation on the issue will come into force next year
– the attacks have proved a catalyst for change, according to flexible working
specialist Flexecutive.
Karen Janman, Flexecutive’s director of consultancy, points to a survey
carried out with the Work Foundation that discovered half of HR professionals
are now implementing flexible working policies – three times as many as before.
Since 1997 there has been a 16 per cent per year increase in people working
one or more days a week at home, says Peter Thomson, director of the Future
Work Forum at Henley Management College. "It was a trend that was coming
along anyway. September 11 gave it an additional boost and extra credibility.
It is no longer just for pregnant women or the disadvantaged," he says.
SHRM’s Patel agrees: "The biggest issue before 9/11 with distance
working was not so much whether it was possible, but the whole cultural
perception of it and how to manage it," he says. "There was a view
that if you cannot see them, are they really working?"
After the attacks, there was a lot of concern over whether it was safe to go
to the office or, as in Manhattan, whether it was even possible to come in at
all. "People started to do distance working and established some sort of
record, and that began to ease those cultural perceptions," explains
Patel. Around 25 million workers in the US now work from home and the figure is
rising all the time, he adds.
Tough economics and scepticism have been the main counter-trend. A poll in
June by recruitment company Working Options found 93 per cent of employees
thought their company’s commitment to change was purely lip-service.
And a study by the Institute for Employment Studies this April, found that,
even where companies were encouraging better work-life balance, workers were
often reluctant to take it up, fearing it would damage their career prospects.
But Scottish Water’s Pagliari believes September 11 has helped lift the
stigma surrounding flexible working, and people are now more prepared to ask
for such benefits.
In July, the company ran a recruitment drive for 140 top positions and made
sure each one was considered in terms of work-life balance and flexible working.
"We are going to take an interest in your being here, but we are not
going to reward you for presenteeism," Pagliari says.
Travel
The economic malaise gripping US airlines is stark evidence of the change in
attitude towards air travel since September 11. In August, United Airlines said
it was threatened with bankruptcy and US Airlines has already gone that way.
American Airlines axed 7,000 jobs. The number of domestic flights in the US
during August was down 8 per cent compared with the year before.
In the UK in May, British Airways – which cut 7,000 jobs in the wake of the
attacks – published figures showing it had lost £100m over the past 12 months,
compared with a profit of £150m the year before.
Yet a report in March by American Express found that 73 per cent of business
travellers had not cut their work-related travel during the previous six
months, and just 8 per cent had moved to videoconferencing as a substitute.
So, what has actually changed?
Immediately after September 11, the business travel market did freeze, but
there was quickly a recognition that face-to-face business needed to continue,
with the message promoted through clever advertising campaigns by, among
others, British Airways.
"It’s not that people are afraid to fly, but that businesses have
retrenched. Go, EasyJet and Ryanair are all flourishing, it is business class
that is suffering," says Thomson.
People are much more likely to think about whether they actually need to get
on a plane, agrees Microsoft’s Harvey. Many Microsoft staff now have webcams
and access to video links. "We have become much more cautious about people
travelling," he says.
But predictions that conferencing technology would fill the gap appear to
have been over-optimistic, argues Bill Quirke, director of Synopsis
Communication Consulting.
"Global organisations are going through a lot of change but some things
cannot be done at a distance. It has not been a full pendulum swing," he
says.
For many, videoconferencing is still too primitive and cumbersome to be a
viable alternative, with teleconferencing, e-mail and simple telephone
technology more popular.
Another new trend is that organisations now carefully monitor how many
executives they have in the air at any one time.
"If there are going to be more than six employees travelling on a
plane, we know about it," says Vance Kearney, vice-president of HR at
Oracle Corporation. Todd Beamer, one of the heroes of the hijacked airliner
that crashed in Pennsylvania, was an Oracle employee.
"It has not returned to normal, but how much of that is due to
September 11 and how much is due to trying to be economic with travel
expenditure? That is the question. The telephone conference call has become
part of the business process as much as e-mail. It is now a daily tool of
life," he says.
Security
Security, not unsurprisingly, was at the top of the agenda for many
companies on 12 September, with urgent reviews taking place around the country.
Yet, a couple of months later when the Work Foundation looked at the issue, it
found that just half of employers with disaster planning strategies would be
able to locate their staff in the event of critical business data being
destroyed.
Even more worrying, more than half of the 285 HR professionals polled said
they had not undertaken a crisis simulation, with 40 per cent never having held
pre-crisis training for their staff.
Despite this, organisations are now looking closely at disaster planning in
terms of people – who they have, who they need and where they are – rather than
just recovering IT or lost data, believes Thomson. "There is an
opportunity for the HR profession to be leading in this, but I am not sure they
are," he says.
In the US in particular, there is now much more use of biometric devices,
such as retinal ‘fingerprint’ scans. There are many more background checks, and
a far tighter regime on contractors and vendors, says SHRM’s Patel.
Employers are also much more focused on cyber security. In June, for instance,
US investigators warned that al-Qaeda could be preparing to hack into computer
networks to disrupt electricity, telephone systems, dams and nuclear power
stations.
For companies such as Microsoft – very much symbolic of the US and as such a
prime target for terrorists – September 11 was a grim wake-up call, admits
Harvey. "The terrorist attacks made us realise that if our building had
been hit, we would have been exposed," he says.
Security at the company’s UK operation – which employs 1,500 staff – is now
much tighter, with perimeter fencing, a confidential waste system, a reduction
in the number of entrances, and after the anthrax attacks that followed
September 11, the post is handled off site.
Security passes are worn 100 per cent of the time, with the idea that
security is much stricter outside but once inside, more relaxed, he says.
But Mayuri Vyas, director of consulting at the Work Foundation, warns that
inevitably, 12 months on, people are less vigilant. "For the first six
months there was a huge impact, for the next three it was still highly visible.
But in the past three or four months things have practically reverted back to
normal."
There is also the issue of whether, after an initial flurry of enthusiasm,
plans are being followed through. Russell Walker, director of International
Human Resources at the Church of Jesus Christ of Latter-day Saints in Salt Lake
City, admits that while discussions were held on refining disaster and
emergency plans after September 11, "there does not appear to be as much
follow-through on those topics as I would have expected".
But he adds: "We are much more security conscious than before. The
open, free atmosphere that used to exist in our office locations has been
replaced by controlled access checkpoints and other restrictions."
Suddenly Global’s Richards agrees that even in the US, memories can be
short. "If we are not careful, we could roll back to a very nice,
couch-shaped complacency without too much trouble."
Oracle’s Kearney points out that, for a global organisation, security and
disaster planning issues never go away. If it’s not September 11, it’s Kashmir,
or even Potters Bar, where Oracle lost an employee in the train crash.
"The days when companies were physically placing their entire workforce
in one location are gone. Part of the drive to working at home or flexible
working is that even when people are at a physical location, our highest
occupancy is normally 70 to 80 per cent," he explains.
Oracle lost a British employee in the Twin Towers and, including Todd Beamer
in the Pentagon plane crash, four altogether. "We already had the
policies, but the difference has been the involvement of the HR function with
families. There has been a much more personal engagement between the HR function
and the bereaved families," he says.
World trade: Will Hutton
The future of globalisation
Stock markets may be of little use in helping entrepreneurs
build businesses – they are too myopic for that – but they are great signallers
of collective judgements. If prices are rising as crazily as in the late
nineties, that means our animal spirits are up. If they are falling, as they
have done so rapidly over the past three months, it is a sign of new
despondency.
It isn’t September 11 that has put globalisation at risk or
changed its dynamics; it is what the stock markets’ collective fall is telling
us, and how that in turn is beginning to create an economic slowdown, and even
put a break on the pace of globalisation, that makes the markets so fearful.
The markets have been hit by two massive events. First, the
astonishing scale of overstated profits made by corporate America during the
past few years, highlighted by the infamous accounting scandals. Second – less
obvious, perhaps, but no less important – the fear of war against Iraq and
consequent destabilisation of not just the middle East, but of the principles
on which the post-war era have been built.
The Bush administration’s willingness to consider a land
invasion of Iraq is a direct consequence of September 11, and the reasons are
well rehearsed. I doubt there will be a full-scale land invasion, but to save
face Bush may do something equally dangerous. And it is this unilateralism and
refusal to submit to a framework of international law, that spooks the markets.
Globalisation has progressed so fast and thoroughly because it
has not been imposed by the US. It has developed as it has due to a framework
of trade treaties, international accounting and legal standards and willingness
by all players to submit to the judgements of the World Trade Organisation or
IMF. Once a new rule is in place – that the US can and will do what it wants
when it wants – one of the pillars of globalisation falls. We are then moving
into a new world in which the law of the jungle holds, and the markets don’t
like what they see.
It is this combination of the consequences of September 11 –
the new aggressive unilateralism of the US and the synchronised collapse of all
major world stock markets – that makes the future so difficult to predict.
Of course, it may look very much like the present. Or we could
be embarking on a period of international instability coupled with falling
prices and stalled western economies that puts globalisation itself at risk.
The jury is out, and the truth is nobody knows what will happen next – but the
outlook is not bright.
The
economy: John Philpott
Counting the cost
Even though the horror remains vivid, the mundane task of counting the
economic cost of what happened in New York last September must still be
undertaken.
The immediate period following the terrorist strike was one of
understandable despair. But the US and world economy were both in poor health
well before the Twin Towers were destroyed.
The main cause was the fallout from the abrupt reversal of the IT boom of
the late 1990s. The latest figures from the US Commerce Department show that
the world’s biggest economy contracted by 2.2 per cent during the first six
months of 2001, and by a further 0.3 per cent in the third quarter, dragging
down the rest of the world economy in its wake.
The events of September 11 were therefore an additional shock to an already
fragile situation, propelling the aerospace, airline and tourism sectors into
the same tailspin experienced by IT and telecoms in 2000.
Indeed, the sad irony is that the tragic events in Manhattan and Washington
triggered global cuts in interest rates that might otherwise have been delayed,
thus stimulating activity rather than depressing it. But the cuts, coupled with
a ‘live for today’ attitude on the part of consumers, helped propel a US
recovery by the end of 2001 into 2002, and helped to pull the UK and eurozone
economies along in the process.
Recent growth has been more subdued, with weak consumer spending and
business investment, but this mainly reflects the stock market fallout from
corporate accounting scandals such as Enron and WorldCom – names that will
almost certainly figure larger than Osama Bin Laden in the annals of economic
historians.
Despite this, the HR world may nonetheless come to place more significance
on September 11 than economists. People management is as much about psychology
as economics, yet at the very time US workers were seeking security, many were
faced with redundancy.
US employment dropped by 1.4 million in 2001 and the unemployment rate
reached 6 per cent by spring 2002. It will be interesting to see how this
affects the psychological contract, and US workplace productivity, in coming
years.
UK people managers have fared relatively well by comparison. Major
redundancy programmes have certainly caught the headlines and put strain on the
personnel professionals involved. But less attention has been given to the fact
that many employers hoarded labour during the economic downturn, enabling
people managers to think positively about the best way to develop workers,
rather than how best to discard them.
The terrorist attack has, however, cast a shadow over employee relations as
workers re-evaluate life priorities. Office gripes and management reports now
seem less important, with obvious implications for attitudes towards work-life
balance and total reward.
Whatever the economic impact, therefore, September 2001 might eventually be
regarded as the month the 21st century actually arrived in the workplace.
John Philpott is chief economist of the CIPD
Case study: PricewaterhouseCoopers
almost a case of ‘business as usual’
When the planes struck the World Trade Center and the Pentagon, Clive
Newton, global head of HR at PricewaterhouseCoopers, was attending an executive
meeting in Philadelphia.
Like many, he was stranded as all aircraft were grounded. The priority was
tracking down where people were and finding out if there were any casualties
among the company’s 160,000 staff, who work in 152 countries. Counsellors were
drafted in within a day of the tragedy.
In the event, the company lost people in the Twin Towers, the Pentagon and
on the planes that day.
"It was traumatic, but people recovered really quite fast," he
says. "After the initial shock, there was recognition that in many of the
countries we work in there has been terrorism for years. The reaction of many
other countries was ‘why are you getting so excited? We have been living with
these problems for decades’. That was a pretty salutary message when you are
running a global business," he adds.
In the weeks that followed, predictions of a huge reduction in global travel
seemed correct, with many people afraid to fly. But, although travel has fallen
off, there was also a rapid understanding that business still has to be done,
and the main practical change is longer check-in times.
The company encouraged people not to travel if it was not essential, but decisions
were left to individuals. Newton says there has not been a substantial increase
in video-conferencing, which was found to be primitive and complicated.
Teleconferencing is the preferred choice.
New technology such as internet-based voice messaging was also found to work
effectively. "That was a bit of a discovery, we now use it widely,"
says Newton.
After the attacks, the HR department spent a lot of time talking to
employees and their families to ensure they were comfortable with overseas
postings and were aware of the security implications.
A team of people in each of the international area in which the company
operates looks after employee movements and, in particular, checks security
alerts for each country. "They know who is travelling where. If someone
books a ticket to a sensitive area, an alert is sent," says Newton.
There is also a website that helps employees assess whether it is safe to
travel to a particular country.
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The impact of the events of September 11 were obviously huge, but around the
world a company such as PWC will regularly have to deal with the deaths of
employees caused by events such as car crashes, or, less frequently,
kidnappings and acts of terrorism.
"When this happens you have to move very fast. You have to be able to
talk to the families and your staff and make sure you get the resources you
need very quickly."
