Managers are being laid off in their thousands. Computers are the cause and recession the catalyst. Hashi Syedain reports.
On the guided tour of Drake Beam Morin's elegant St James's office, apologies are whispered that the executive wing is looking a little stark. "The pictures haven't been rehung since the decorators left," explains marketing executive Michele Cozzi. A few miles outside London in the offices of Focus, managing director Bridget Litchfield is in similar circumstances. "It's a good thing you didn't come last week," she declares. "The whole place was being repainted." Back in the centre of town it is the same story at Sanders and Sidney. "We're doing up some group seminar rooms," says director Derek Edwards as we glide past the notice board, where people sign up for a session entitled "How to dress for success".
These offices all belong to outplacement agents - companies that specialise in helping people who have been made redundant to find another job. The outplacement world is thriving, as this recent spate of refurbishments suggests.
It is not surprising. One need only glance at the papers or television to hear yet more stories of layoffs and closures; unemployment has surged above two million again and shows little sign of levelling off. But the big difference this time round is that management is cutting back its own ranks too. While the previous recession saw manual labour ruthlessly slashed, the headlines today tell of qualified professionals and experienced managers being shown the door.
No one can assess the true scale of departures. Government statistics on unemployment do not distinguish between white and blue collar jobs. And many executives never become statistics at all since generous pay-offs (not to mention pride) keep many away from the dole queues.
But the highly publicised management layoffs - 5,000 at British Telecom, 4,500 at Philips, 1,000 at BP - are merely the tip of a growing iceberg. All over the country managers are being quietly laid off, a couple here or a dozen there from thousands of companies of all sizes and sectors. "It's an invisible process," says Carole Pemberton, research consultant at Sundridge Park Management Centre. "There's a lot of leakage and natural wastage."
The recession, moreover, is just part of the reason. (Steve Rowlinson, managing director of Sanders and Sidney, reckons that recession-related redundancies account for 20 to 25% of current business.) Underlying the recession, and in essence, quite independent of it, is a growing trend towards restructuring management and demanding the same sort of productivity improvement from paper pushers which is routinely demanded from the blue collar workforce.
Cutting costs and improving efficiency are a constant preoccupation. In the run-up to the single market, companies all over Europe are desperate to cut costs - and with them jobs - in order to remain competitive. In the UK the high value of sterling in the European exchange rate mechanism and against the dollar puts even more pressure on British companies.
A situation like this means that everything comes under scrutiny, including management. Paternalistic attitudes, with cushy bureaucracies offering cradle-to-grave employment, are becoming a thing of the past. "Companies will have to build a shelf-life concept for their employees rather than jobs for life," says Bruce Reed of the Grubb Institute. In the 1990s employers can no longer afford to make the sort of traditional pact of "Do your job reasonably well and we'll promote you every two or three years".
New technology has played a central role. The introduction of computers means that a great many functions traditionally carried out by armies of accountants, stock controllers and data processors can now be done by machine. So companies can afford to axe these jobs on a massive scale and still function perfectly well. Says Rowlinson at Sanders and Sidney: "New technology has changed many jobs both in terms of making people redundant, but also in terms of whole departments, like logistics, say, going out the window."
At the same time improved communications, computer networks and the like mean that decision makers at the top can stay in touch with and control people closer to the operational base without going through a middle layer. "Middle management is often used as a punctuation mark, a control between top and bottom. That is reduced with information technology. People are managing and controlling themselves. The growth of the expert means leading a project, working under one's own steam and setting up appraisal systems," continues Reed.