A Rising Force of Mercenaries

“Dot-com” manager Bill Garnsey earns more than $130,000 annually, plus stock options. San Jose mail clerk Rachel Salinas is a single mother who for years has made about $10 per hour with no benefits. They appear to share little in common. Yet each is essential to the “new economy,” and each finds a new job at the rate of one per year.

When President Clinton predicted six years ago that the average working person will change jobs six or seven times in a lifetime, the expectation of lifelong employment at a single employer was already as outdated as a “Leave It to Beaver” episode.

Garnsey, 39, has jumped to increasingly better jobs at that many employers since Clinton made his comment. An expert on small-business Web sites, he recently became director of content at San Mateo-based Sales.com, a site for sales professionals--his fourth position since 1997.

For five years, Salinas has been just as transient, but not as a strategy to get ahead. She has been a temp at blue-chip technology firms for little more than subsistence wages, hoping to be hired as a regular employee on each new job. For five years, she has been passed over.

The two workers represent opposite poles of a trend that has transformed Silicon Valley and is sweeping the nation: the rise of a mercenary work force for whom long-term commitments are neither extended nor expected.

“It’s probably a permanent phenomenon,” said UC Davis professor Martin Kenney, author of two books on the Silicon Valley economy. And it’s a global phenomenon spreading rapidly to many industries and regions.

Indeed, a California Employment Development Department study released in October found that 77% of workers who lost their jobs over a recent two-year period found new, higher-paying jobs within a year. Helping spur job hopping in the tech sector is the ongoing consolidation in the Internet industry. Since December, 22,267 jobs have been eliminated as hundreds of companies have gone out of business.

Nationwide, about 30% of U.S. workers already fall into the “contingent” categories--temps, part-timers, contractors and on-call employees--according to the U.S. General Accounting Office. Turnover for professionals at many Silicon Valley software firms runs 20% annually--three to four times the national rate for knowledge workers.

And in many Silicon Valley start-ups, independent contractors form as much as 30% of the staff, say recruiters--themselves hotly in demand. Programmers, Web designers and human resources specialists increasingly shun regular jobs to become footloose, highly paid contractors.

For some employers, perpetual job hoppers are seen as having the unique asset of adapting quickly to strategy shifts within a corporation.

“If you find someone who has been with a company for 10 years, you can’t be sure that they can think out of the box,” said James Beckett, a recruiter with Firetalk, an Internet communications company. “Employers want people who can work well with change.”

Many Silicon Valley employers consider a job a year for the last five years to be a “typical Internet resume” and rarely quiz applicants’ former bosses anyway because legal liability means few would be openly critical.

Beckett scans personal histories in search of “dream team” experience--such as working at Netscape Communications, the original Web browser company, during its heyday--suggesting the ability to move fast and think big.

“It’s very much like sports--like the Chicago Bulls. If you can hold that one key team together for three years, they’ll take you to the championship. Then people are going to move on.” Even a year or two is considered a good run.

Of course, turnover is expected in a healthy economy. But today’s young workers, particularly those with technology skills, show unprecedented impatience, said Edward Lawler, a USC professor and author of “Rewarding Excellence: Pay Strategies for the New Economy.” “The under-25s have never grown up with a sense of employment loyalty.”

And in Silicon Valley, even the experience of established professionals is measured not in years, but in products.

Employers “want to see people who have been through a product cycle from concept through an installed base [industry lingo for users],” said Claudia Lindquist, a longtime Silicon Valley headhunter. And software that once took years to develop is now pushed through in a few intense months. “If you’ve done that, it doesn’t matter how much time you have with a company,” she said.

Constant change may be exasperating for employers, but it’s exhilarating for people like Garnsey. After earning a master’s degree in international business in 1985, he struggled for years, amassing 150 rejection letters with nary an interview. He fell back on jobs with airlines and in sales.

Allegiance to Work Rather Than Firms

Since entering the dot-com world, he’s made up for lost time, getting two calls a week from headhunters and a raft of offers when he wants them. After an 18-month stint at Web portal Infoseek, “I was considered a seasoned veteran,” Garnsey said. “Leaving co-workers has been particularly hard. It’s sort of like going through a war together--that short-term intensity” forged by 60- and 80-hour workweeks.

He has moved early and often to advance rapidly.

Garnsey has developed a sixth sense for when to move on. After nine months, he felt that he had outgrown his previous employer, Allbusiness.com, a site that provides small businesses with management tools and advice. A few weeks later, the company was sold and much of the staff was laid off.

Garnsey hopes to find a home with Sales.com, a site that provides software, services and motivational tools for sales professionals, for at least the full stock option vesting cycle, five years. He went into his three previous jobs with similar intentions.

Amid constant adjustments to new co-workers, business strategies and employers, Garnsey finds stability in the modest house in Redwood City, Calif., that he has called home for 12 years, a few miles from where he grew up. Home life with his wife, Linda, and their three children provides the counterweight to career volatility.

Tech professionals like Garnsey represent the trailing edge of a tectonic shift in employment patterns toward permanent free agency, economists say.

In the 1970s, recession and international competition spurred massive downsizing of the blue-collar work force, making job security obsolete as it decimated labor unions. Then in the late ‘80s and early ‘90s, corporate restructuring eliminated thousands of managers and professionals. Employee benefit laws were broadly reformed to make pensions portable, eliminating a key incentive for long-term loyalty.

That new regime comes at a price for Silicon Valley employers: up to $4 billion a year in hiring and related costs, economists say.

“In Silicon Valley, the region and the skills provide the employment security,” said David Finegold, a business professor at USC. “Allegiance is to the work and to a network of individuals, rather than the firm.”

Blue-Collar Workers Often Segregated

Whereas self-reliance is lucrative for professionals like Garnsey, it’s a different story for blue-collar workers like Salinas, the mail clerk. Silicon Valley tech firms have out-sourced most such jobs to employment contractors that often hire workers as temps; those workers hope to gain permanent jobs that may never materialize. They average $19,000 annually without benefits, according to Working Partnerships, a union-backed research group.

“What they do, so they don’t have to pay the benefits on you, is bide their time,” Salinas said. The companies “use temps until they start griping, complaining; then they let you go.”

Salinas, 32, is a San Jose native whose parents picked fruit when Santa Clara County was prime agricultural land. The petite, friendly woman speaks with a childlike lilt that disguises years of experience in mail-handling and warehouse work, including a stint as a forklift operator.

For years she has earned $350 to $450 a week as a temp without benefits, paying $780 in monthly rent for a one-bedroom duplex for herself and her two children. Recently when her son got poison oak, she had to pay $385 for medical treatment, and “one of my paychecks was gone,” she said.

Blue-collar temps at Intel and Hewlett-Packard are segregated from other employees, Salinas added, their status enforced by color-coded badges. “Intel had a great dining area . . . but we were not able to eat with the other people,” Salinas said. “The white-collar workers would not even talk to you. . . . I would never go back into a high-tech company.”

Such stories have become typical as tech companies push to reduce costs in the face of competition that has driven professional salaries skyward. Meanwhile, competition among labor-contracting agencies has depressed blue-collar wages, contributing to a cost-of-living crisis in one of the nation’s wealthiest areas.

Amy Dean, executive director of the South Bay AFL-CIO Labor Council in San Jose, has called for “a new New Deal,” a modern update to the legislation of the 1930s and ‘40s that fashioned the nation’s social safety net, including enhanced job retraining. Without more stability, according to Dean, Silicon Valley and the entire nation will yet pay a steep price for creating a rootless work force.

For Salinas, stability may finally have arrived. She landed a permanent job as a mail handler in October at a San Jose health agency, gaining a hefty raise to $16.50 an hour plus benefits.

In her small office crowded with postage meters and a computer, she hung photos of her large extended family and pictures drawn by her kids--tangible symbols of her first settled workplace in years. She recently received keys to the building.

“They trust me fully,” she said with evident pride. “In temp jobs, they don’t give you your own space. Nothing’s really yours until you’re actually permanent.”