April 21, 2013

NOT THAT THEY HAVE WORK FOR ALL OF THEM EITHER:

The Incredible Shrinking Payroll (CATHERINE RAMPELL, 4/10/12, NY Times)

The number of workers per establishment then plunged during the 2001 recession, and  continued slipping through the mid-2000s expansion and Great Recession. As of 2011, there were 15.7 employees per physical office location.

So what explains this slide? This shrinking has occurred in almost all industries, so it can only partly be explained by a change in the types of businesses that the economy comprises, the report says.

The report's researchers also investigated whether technological advances might be encouraging parent companies to open up more offices in more places, splitting the existing work force up among more locations but still retaining the same number of employees over all. That explains part of the phenomenon, but not all of it.

The biggest factor, it seems, is the age of establishments.

In the last decade, the report finds, new establishments have been starting smaller and then staying smaller than their predecessors. In the 1990s, the typical start-up opened shop with 7.6 workers; in 2001, 6.8 workers; and in 2011, just 4.7 workers. As older firms die out, these newer businesses represent a larger and larger fraction of the job market.

It's not entirely clear why new companies are starting out so much leaner than they used to. Presumably they are largely helped by new telecommunications technologies, which allow employees to manage more of their administrative and back-office work on their own (like shared calendars) or to outsource it.

Posted by at April 21, 2013 11:32 AM
  

blog comments powered by Disqus
« ...AND CHEAPER...: | Main | WHAT W KNEW, BUT THE RIGHT HAS TO LEARN: »