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June 05, 2006

How to squeeze out employees

WANT TO SQUEEZE your workforce before they cash in on pensions? Then change work practises on them. That's very difficult to accomplish in Ireland, where a change in work practise normally equates to the downing of tools. But with Hewlett-Packard (NYSE: HPQ), one of the ways the company can squeeze out people approaching 15 years of service with the company is to force them to find a place to work inside the company's real estate holdings--make them hold down a desk during normal work hours and ensure that desk is not in their homes. I'm getting this information from a broadsheet and first-hand from a 30-minute conversation I had with a thirtysomething H-P employee on the Surfliner between Los Angeles and San Diego.

HP pioneered flextime decades ago. I used to live 84 miles from HP's San Jose facility in the 80s and several neighbours would occasionally commute into the Bay Area for work. However, most of their conferencing required connections with people more than three time zones away. So they did those calls at home. They would toggle between Outlook, their conferencing calendar, and their to-do list. Sometimes they would cover up a 90 minute period with five conference calls. That's head-spinning activity and much more productive than water cooler chats. Setting up concalls from a home office worked better than being tied to a San Jose desk or locked in California commuting.

HP's latest policy is a smoke screen. It purports to enhance IT efficiency by bringing people shoulder-to-shoulder. That may work for the average Joe but it's not a common work practise for people who hold the IP for the mid-range equipment that H-P sets into data centres for Boeing, UPS and the State government agencies. The big thing to consider is that there is no shoulder space in many of the HP offices. There's not enough parking. Many employees cannot have their own personal printers when they're at work. So what's going on here?

Some of this H-P policy is down to numbers. HP has a bulge at the 15/50 point--I reckon around 600  people. That's a trainload full of employees who have been with the company for nearly 15 years or that's a cohort of seasoned experience approaching 50 years of age. They have to squeeze that cohort because it's expensive labour with attitude. It's much easier to impose a lower cost-per-employee on a work force that's younger and more flexible about work practises and company policies. H-P people with the experience have roots in communities, often hundreds of miles away form their assigned office cubicles. They probably will resign their positions rather than pay the extra petrol charges or move house. And that cuts wage costs at H-P. It also sheds a lot of expertise in places like enterprise services and if imposed with a clock-in system at the main doorway, it could place the efficiency of the printer division at risk. That's not a far cry from the timesheets H-P has imposed in some work centers.

Randy Mott is the "architect of the HP division's change", writes Nicole Wong in the San Jose Mercury News. He earned his crust at Wal-Mart with 22 years of Saturday morning meetings in Bentonville, Arkansas, where all the regional managers from Wal-Mart met once a week to discuss company progress. Mott came to H-P on the heels of a $1m relocation allowance stapled to his contract. Putting the Wal-Mart information model into place at H-P isn't what I would call "efficient" or "better work/life balance" but you wouldn't upstream that point of view to Mott and win promotion points. And it would not appeal to the inner circle of Dell experts who Mott hired into H-P at the vice president level to set up this concept along with "lights-out data centers" and the ruthless squashing of all shadow IT projects. None of these executives has to move from Austin, the place decreed to be a new data centre. Like Irish strategic planning, that data centre wasn't on any kind of H-P roadmap prior to Mott's ascendancy.

As a teleworker myself, I find HP's Victorian philosophy about office work very backward. In the Mercury-News article, Mott rationalises that you need shared office space in order to "put teams together that can learn very aggressively and rapidly from each other." He wouldn't be a proponent of social software and you have to wonder if he's every used any of H-P's virtual conferencing facilities.

As Wong explains in the Mercury-News, "IT workers generally support their companies by keeping computers and databases running and building Web sites and applications. Some can do their jobs without talking to co-workers more than once a day. And the more interactive IT jobs at H-P typically involve early morning and late-night conference calls with colleagues around the world." And you know what? If you proxy into the HPQCORP.net from your home, everyone thinks you're in your cube.

I bought David Packard's book The HP Way: How Bill Hewlett and I Built Our Company several years ago when I was exploring innovative work practises. It spoke of flexibility, respect, and trust. Part of this new H-P would grate against the spirit of its founders.

And here's a special word for anyone considering H-P as part of a core IT package during the next 12 months--ensure you are comfortable about the manner in which your requests for assistance are to be handled--from personal experience, I know H-P follow-up is rock-solid. The mid-career people who consult with you about your enterprise computing purchase today may not be on the H-P payroll at the end of the year. If you are working with someone from H-P to construct a robust data centre, I would ask whether that project manager or IT specialist has to move. You need to know whether the people who are upgrading your services will be around to service it next year, regardless of the hour of the day when you need help. When you buy H-P, you expect better than Wal-Mart.

Nicole Wong -- "HP cuts back on telecommuting"
David Packard -- "The HP Way" ISBN 0887308171
Jeremy Wagstaff -- "Killing the Couch-Loving Individualists"



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Hi there, just thought as you were speaking about flexible work practices, that you might like to check out ken thompsons www.bioteams.com blog. He has a lot of good stuff on teams, virtual teams, and virtual development.

This is the best analysis I have seen so far on why HP is doing this. I think this has a very good chance of freaking out HP's customers thereby allowing its competitors to make use of the good ole FUD strategy of instilling Fear, Uncertainty, and Doubt about HP.

I think this has a very good chance of freaking out HP's customers thereby allowing its competitors to make use of the good ole FUD strategy of instilling Fear, Uncertainty, and Doubt about HP.

I must put on my Mr. Cynical hat and say 'no it won't.'

I'm not an HP customer. I am an HP consumer - the choice on what to buy or not buy at the dayjob is above my pay grade. The folks at that level are not likely to care about fiddly details like how a service call is handled - it's under their radar.

Cost is the driver at that level. Now to take off my Mr. Cynical hat and get back to work.

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