Transcript Bureau of Labor Statistics Identifying Business Functions and Business Processes Involved in Mass Layoffs in the United States Sharon P.

Bureau of Labor Statistics
Identifying Business Functions and
Business Processes Involved in Mass
Layoffs in the United States
Sharon P. Brown
Bureau of Labor Statistics
2008 World Congress on National Accounts and Economic
Performance Measures for Nations
Washington, DC
May 15, 2008
Bureau of Labor Statistics
The BLS Mass Layoff Statistics (MLS) program
•
•
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MLS identifies plant closings and mass layoffs in establishments with 50 or
more workers where at least 50 initial claims for unemployment insurance
(UI) were filed in a 5-week period.
MLS focuses on
– large establishments—those employing 50 or more workers.
– “mass” layoffs—identified by the filing of 50 claims in a 5-week period.
– permanent layoffs--those lasting at least 31 days—as determined in
the employer interview.
The employer interview provides important information on the nature of the
layoff not available from administrative data.
– As examples, economic reason for layoff, movement of work
questions in 2004, and, since 2007, Business Function.
► MLS measures relatively large layoffs in relatively large firms when there is
more permanent dislocation of affected workers. The employer interview
provides a ready vehicle for obtaining timely information on labor market
developments affecting firms and workers.
Bureau of Labor Statistics
BLS focus on Business Function and Process
•
In 2004, interest in identifying the effects of offshoring led to the introduction
of movement of work questions in MLS that measure job loss associated
with geographic shifts (domestic and overseas relocations) and contractual
actions (outsourcing). This then led to the concept of Business Function
involved in the layoff.
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Offshoring studies and newspaper articles focused primarily on activities
that were neither occupations nor industry groups. These activities
could/did operate within any establishment, regardless of industry, and often
involved multiple occupations.
– Examples of activities: call centers, customer services, data processing,
financial functions, human resources
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Ongoing research brought BLS to Business Functions and the activities of
the firm as a more viable data element for collection and a more relevant
item of interest for the MLS program.
►Business decisions are often based on a consideration of the firm’s Business
Functions and are reflected in employment actions such as layoffs.
Bureau of Labor Statistics
MLS Business Function and Process timeline
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In June 2006, a proposal was developed to collect information on Business
Function involved in the layoff.
– “Business Function” is defined as an activity that a firm performs in
order to produce its product or achieve its objective.
•
A feasibility study was conducted in September and October 2006.
– Goals of feasibility test:
• Are we finding the right person to answer the question?
• Is the person understanding the question?
• Is the response provided a business function?
Findings:
– The new question on Business Function seemed to work well.
– Knowledgeable respondents were found.
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In January 2007, nationwide collection of Business Function began.
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Categorization of Business Functions into higher-level Business Processes
was introduced in April.
– “Business Processes” describe the full range of firm activities.
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Qualitative analysis of the Business Function collection and coding of
Business Process is ongoing.
Bureau of Labor Statistics
Business Functions and Business Processes: Models
of firm activities
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Once the feasibility study corroborated that employers can provide Business
Functions involved in their layoff decisions, efforts turned to developing a
higher-level categorization for Business Functions that would accommodate
the multitude of functions collected and also support economic analysis.
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There is no current acknowledged standard for defining Business
Processes or the Business Functions within these processes.
– However, there are models of firm activities such as those of Tim
Sturgeon and Gary Gereffi (Global Value Chain Initiative) and Michael
Porter.
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For the MLS program, BLS identified a set of Business Processes that is
– consistent with the academic studies and current literature,
– reflects comments on the BLS business function proposal and the
results of the feasibility study, and
– appears to fit the actual data collection.
Bureau of Labor Statistics
Business Processes in a Firm
Core Processes
Strategic management
Procurement, logistics, distribution
Operations
Product and/or service development
Marketing, sales, customer accounts
Customer and after-sales service
Support Processes
General management and firm infrastructure
Human resource management
Technology and process development
Bureau of Labor Statistics
Core Processes of the firm
• Strategic management: activities that support the setting of
strategy, investments and acquisitions, business sales.
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Procurement, logistics, distribution: activities associated with
obtaining and storing inputs, and storing and transporting finished
products to customers.
– Business Function examples: Buying, distributing, loading,
shipping, warehousing
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Operations: those activities that transform inputs into final outputs,
either goods or services. (In most cases, the function under
operations correspond to the production process that is the basis for
the establishment’s NAICS classification or the activity most directly
associated with it.)
– Business Function examples: Producing goods, providing
services, assembling products, fabricating components,
conducting QA/QC, direct managing
Bureau of Labor Statistics
Core Processes of the firm--continued
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Product and/or service development: activities associated with
bringing a new, redesigned, or improved product or service to market.
– Business Function examples: Analyzing markets, researching,
designing or developing the product/service, testing
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Marketing, sales, customer accounts: activities to inform existing or
potential buyers including promotion, advertising, telemarketing,
selling, retail management.
– Other Business Function examples: Billing, conducting market
research, coordinating media relations, branding, merchandizing
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Customer and after-sales service: support services to customers after
purchase of a good or service, including training, help desks, call
centers, and customer support for guarantees and warranties.
– Other Business Function examples: Installing products, customer
relations, maintaining and repairing products
Bureau of Labor Statistics
Support Processes of the firm
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General management and firm infrastructure: activities related to
corporate governance (which includes legal, finance, planning, public
affairs, and government relations), accounting, building maintenance
and services, general management, and administrative support.
– Other Business Function examples: Cafeteria services, clerical
support, security
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Human resource management: activities associated with recruiting,
hiring, training, compensating, and dismissing personnel.
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Technology and process development: activities related to
maintenance, automation, design/redesign of equipment, hardware,
software, procedures, and technical knowledge.
– Other Business Function examples: Computer systems
development, computer systems maintenance and repair,
managing data, data processing, providing Internet web services,
development and testing software, providing software and IT
services, designing processes
Bureau of Labor Statistics
Selected MLS employer interview questions
QUESTION
PURPOSE
1.
Based on our unemployment insurance claims records, we believe that
you may have had a (layoff/reduction in staff) during (month). Is that true?
1.
Yes
2.
Valid No (Probe: Do you know why these
unemployment claims
were filed against your company?) Enter explanation. End interview.)
3.
Don’t know (Ask for another contact) -- Refusal
1.
To determine whether a
layoff occurred.
2.
2.
When did that layoff begin? _____When did you stop laying off workers?
___________
For data editing
purposes.
3.
Were workers laid off for more than 30 days? Yes
3.
4.
About how many workers were laid off for more than 30 days? (Probe: If big
gap between number of initial claims and number of separations)
Number: __________________  Don’t Know/INA
4.
To establish the
permanent criteria. .
To obtain the total number
of workers affected.
What was the primary reason for the job cutbacks?
 Don’t Know/INA
Primary:_______________ Secondary:______________________
5.
5.
To obtain the economic
reasons for layoff.
6.
6.
What kind of business is conducted at the worksite that experienced the
layoffs?
(Probe: What product do you manufacture or what service do
you provide at that location?) Industry: ________________  Don’t Know/INA
To verify the industry
code.
7.
7.
Regarding the workers who were laid off, what was their main role or
function within the company? For example, were they in manufacturing,
sales, personnel, computer support, or something else? (Probe: In addition
to {function mentioned}, were any of the employees affected by the layoff
involved in other activities of the firm such as clerical support, warehousing, or
sales?) Main:____________________________________
Other: ___________________________________
To obtain Business
Functions involved in the
layoff.
No □
Bureau of Labor Statistics
Experiences in collecting Business Function
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The employer interview was not
adversely affected by the Business
Function question.
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“Refusals” were 4.4 percent, 2.6
percent, and 3.4 percent
respectively.
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Responses of “does not know”
Business Function were quite low,
indicating that the right person was
being interviewed.
“Unable to contact” reports were
relatively high and likely reflects the
program requirement to wait 31
days before attempting contact.
– These may be closures.
Mass layoff events by selected
measures, first through third quarters
2007
Action
1st Q
2nd Q
3rd Q
Total potential mass
layoff events
3,139
3,289
3,025
Total private nonfarm
extended layoff
events
1,111
1,421
931
Events with
Business Function
responses
974
1,297
824
“Does not know”
Business Function
13
20
24
Refused (entire
event)
49
37
32
Unable to contact
75
67
51
Bureau of Labor Statistics
Total, Main, and Secondary Business Processes involved in extended mass
layoffs, first through third quarters 2007
Business Processes in MLS layoff events
Total
Main
Secondary
4,518
3,095
1,423
3,589
3,023
566
324
57
267
2,923
2,895
28
Product development
40
14
26
Marketing, sales, account management
150
33
117
Customer and after-sales service
152
24
128
929
72
857
General management and firm infrastructure
676
60
616
HR management
160
6
154
Technology and process development
93
6
87
Total Business Processes identified
Core Processes
Procurement, logistics, distribution
Operations
Support Processes
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Core Business Processes dominated in the reporting of layoff activity, and
Operations accounted for the majority of Main Processes.
Once the Main Process was identified, there was a greater likelihood that
Support Processes would be involved.
Bureau of Labor Statistics
Brief analysis of Business Functions and Processes
involved in layoff events
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The key categorization for Business Processes—determining whether the
Function is Operations for the establishment—hinges on the relationship of
the Function to the industry of the establishment.
– In MLS, the industry identified for the firm may not relate to the work being done
at the layoff worksite. This relates to how the firm reports for Unemployment
Insurance purposes.
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Main Business Process: the largest number of affected jobs.
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Secondary Business Processes are particularly important in the case of
closures.
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For the first three quarters of 2007, the MLS program reported 3,463
extended layoff events involving the separation of 640,990 workers.
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During this period, employers in 3,463 layoff events provided a total of
5,769 Business Functions involved.
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A single Process was identified in 64 percent of the events. This may reflect
early collection issues in the case of closures. One process may reflect
multiple Functions--producing good and managing that Function.
Bureau of Labor Statistics
Brief analysis of Business Functions and Processes
involved in layoff events--continued
• Core Business Processes dominated and accounted for 98 percent
of the Main Process involved in the layoff.
– Secondary Business Processes were typically Support Processes
although Procurement, logistics, distribution, Customer and after-sales
service, and Marketing, sales, account management were also cited.
• More Processes were reported involved in layoffs when the
economic reason was organizational changes and financial reasons.
– The highest proportions of Technology and process development and
Human resource management as secondary Processes were
associated with these reasons for layoff.
– Business ownership changes were less likely to involve Operations as
the main Process and more likely to involve a secondary Support
Process such as General management and Human resource
management.
• When work was sent out of the US, Operations was cited slightly
more than for domestic relocations.
Bureau of Labor Statistics
Business Functions reported in extended layoff events, third
quarter 2007: Total 1,546
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145 Manufacturing
170 Construction activities
85 Producing goods
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52
49
34
34
21
20
18
14
14
10
10
5
4
8
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81 Transporting
37 Warehousing
19 Shipping
Facility maintenance services
Real estate services
Educational services
Food services
Accounting services
Entertainment services
Engineering services
Financial services
Social services
Conference services
Contracted services
Housekeeping services
Cafeteria services
Providing services
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74
50
49
30
9
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42 Human resources
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39 Customer service
3 Call center
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33
14
6
12
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12 Supervision—first line or
direct
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Residual:
– 320 Business Functions
– 23 Business Process
responses
Clerical support
General management
Administrative support
Management
Business management
Selling
Sales
Retail sales
Marketing
Bureau of Labor Statistics
Brief analysis of Business Functions and Processes
involved in layoff events--continued
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Looking at 3rd quarter data on Business Functions reported by employers,
Functions associated with producing goods and providing services dominated.
By this time, Functions associated with real estate appeared in response to the
real estate/mortgage industry issues.
Other, more difficult to categorize Functions also appeared:
Mortgage banking
Mortgage banking services
Mortgage brokering
Mortgage lending service
Mortgage processing
Mortgaging
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Loan adjusting
Loan authorizing
Loan counseling
Loan interviewing
Home mortgage loans
Processing loans
Bank services
Banking services
Mortgage
Banking
Lending
Business Functions and Business Processes each offer a different perspective
on the job loss associated with a closure or layoff.
– Looking at the Business Functions, one sees the activity that is the focus
of change. However, “new” Functions must be addressed.
– Looking at the Business Processes, one sees actions more from the
perspective of the company and the decisions it makes. However, in order
to accurately “see” the corporate decisions, one must have the full picture
of corporate association.
Bureau of Labor Statistics
Summary Remarks
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Estimates of employment at the establishment or industry level reflect the
industry classification of the main Business Function of the unit, and reflect
the net impact of job gains and losses. Such estimates may not reflect the
dynamic nature of change.
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The identification and collection of Business Functions involved in layoffs
provides new information on job losses in establishments and industries.
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The Business Function/Business Process classification scheme and its
successful use in the MLS program implies that it can be equally applied to
other employment measures, and can provide a basis for further understanding
of such phenomena as technology change and globalization on a larger scale.
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More work on “establishment” as it is used in the MLS program is needed.
Linking the MLS establishment to higher corporate entities will allow for
greater insights into firm decisions. BEA data may provide an opportunity for
such work.
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Consideration must be given to the alternative analytical approaches.
– Is Business Function the better unit of analysis, and what does that mean
for the MLS program?
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Qualitative and quantitative analysis of the Business Function collection and
the coding to Business Process continues, leading to publication.