YOU ARE HERE: LAT HomeCollections

THE TIMES 100 : THE HUMAN FACTOR : Doing More With Fewer People


As California crawls out of a recession marked by massive layoffs and bankruptcies, corporations struggling to mend their finances should beware of what some economists and labor experts call "the burnout factor."

For those fortunate enough to still have jobs, stress from increased workloads and the prospect of still more "downsizing" could affect productivity during the modest recovery, a time when companies should be expanding.

"All of us have to have a moderate degree of stress to be productive and healthy," said UCLA economist Thomas G. Cummings, who specializes in job-related stress. "Too little is boring, but too much is clearly dysfunctional."

It has been the worst recession in decades. Californians have lost more than 650,000 jobs in the last three years--200,000 last year alone, according to the state Employment Development Department. Statewide, the monthly unemployment rate has hovered around 9%.

For the Record
Los Angeles Times Monday May 17, 1993 Home Edition Business Part D Page 2 Column 1 Financial Desk 1 inches; 13 words Type of Material: Correction
In another Times 100 article, USC economist Thomas G. Cummings was incorrectly identified.

Economists expect the pace of large-scale corporate layoffs to slow in 1993, perhaps even leading to small employment gains by 1994. Whatever job growth occurs will probably be concentrated in small companies in the high-tech and health care fields. Retail and service sectors, which have led the recovery, are also expected to provide more low-wage jobs this year.

The primary effect of the job losses, experts say, is that those still employed are often asked to work harder--sometimes for less money. Teachers in the Los Angeles Unified School District, for example, are working on a 12% pay cut.

Further, workplace stress is magnified when employees feel trapped in jobs they don't like, simply because there are no other choices.

Jone Pearce, a UC Irvine psychologist who teaches organizational behavior, cites studies showing a correlation between recessions and low worker morale.

During good economic times, people are more likely to switch jobs. They may seek promotion or find a new employer that promises better working conditions, higher pay or a career challenge, Pearce says. In a recession, however, workers are afraid to gamble on a new job or occupation that might make them happier.

"They just feel lucky to have a job," Pearce said.

Curtis Plott, president of the New York-based American Society for Training and Development, suggests that companies counter employee frustration by investing more in training and counseling. That may mean resisting the temptation to cut costs in certain departments, such as human resources.

Last year, for instance, U.S. companies spent $30 billion, representing 1.4% of payroll expenses, on counseling and training and development programs, the society reported. Plott suggests that employers spend as much as $44 billion, or 2% of payroll, for short-term programs and invest twice that amount in long-term programs such as job retraining.

Workplace experts say job stress leading to burnout will continue for some time because so few large companies are hiring. Remaining employees are thus left to cope with heavier workloads to make up for staff reductions.

Despite the pressures brought on by the weak state economy, some California employers managed to add jobs, either through new hiring or acquisitions--or at least to hold steady.

Computer maker Hewlett-Packard moved up one notch on The Times Employment 100 list to the top spot. H P reported it had 92,600 employees, or 3,592 more than in 1991, when the state was in the middle of the recession.

The No. 2 employer in California was BankAmerica Corp., up from eighth place in 1991. The commercial banking company employed 83,200 people, up from 54,369 in 1991. That large job gain reflected the bank's merger with Security Pacific Bank.

Meanwhile, grocery chain Safeway Inc. has felt the recession. Safeway slid from first to third place, with 31,565 job losses. Rounding out the top five were fourth-place Rockwell International, an aerospace and technology firm that shed 10,004 workers in 1992, and Lockheed Corp., a Calabasas-based aerospace company, which ended 1992 with 71,000 employees, a reduction of 1,300.

Eight companies were newcomers to the Employment 100 list. Underscoring the economists' views, seven of them were in the health care and high-tech fields.

Foodmaker Inc., the San Diego-based parent of the Jack in the Box fast-food chain, moved into 14th place after going public in March, 1992. The company employs 44,350 people.

Another name on the list, No. 100, was Foundation Health Corp., a health maintenance organization operator in Rancho Cordova. It claimed 3,800 employees for 1992.

Most Productive Employees

Top companies in each industry ranked by revenue per employee.

Industry/Company: Revenue/Employee ($000s)

Aerospace & Defense Northrop Corp.: 168 Whittaker Corp.: 160 Varian Associates: 157 1992/91 group avg.: 136.0/126.6

Banking First Republic Bancorp: 692 FirstFed Financial: 531 Golden West Financial: 504 1992/91 group avg.: 253.8/237.0

Computer Products Merisel Inc.: 1,544 Amplicon, Inc.: 987 Quantum Corp: 877 1992/91 group avg.: 183.4/214.1

Los Angeles Times Articles