It just does not seem fair or even logical. If important measures of economic vitality are on the rise, then why are so many people continuing to lose their jobs? If these indicators mark the “beginning of the end” of the recession (which I firmly believe), why don’t we see an acceleration in hiring? Instead we saw 558,000 new claims for unemployment benefits last week, and unexpected jump from what was anticipated.
The answer is simple, if not grim. The recent 6.4% increase in productivity reported for the 2nd quarter is a prime example of this effect. Productivity rises when fewer employees are able to produce the same output (or better yet, increased output) as employees before the cuts.
Employers have been nothing, if not consistent. They have religiously slashed payrolls since the recession’s onset in an attempt to cut costs in the downward economic spiral. The stressed-out survivors have been challenged to maintain output and they have done so. Hence the productivity improvement.
I do not mean to vilify employers. Their actions are logical and necessary to maintain the vitality of their enterprises. And despite what even the most jaded of us might think, they do not enjoy firing employees. But especially in a hyper-competitive global environment, productivity increases are the life blood of effective businesses. Which means we all need to adjust to a continual quest to do more and more with less and less.
The good news is that improved economic results keep coming. Industrial output rose in July by .5%, the first such increase since the recession began in December of 2007, fueled by “cash for clunkers” and inventory replenishment. Very good news indeed.
Just don’t expect these developments to provide you with job security. As a matter of fact, you should do yourself a favor and forget about that concept altogether. It’s dead and gone. So be it. Instead find your job security in the strength of your skills, knowledge and experience (intellectual capital), and the strength of your network of contacts (relational capital).
Think of it this way. Used to be your employer was king. Now you are your own king, whose kingdom’s capital is intellectual and relational. The king is dead, long live the king.