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Changes in global employment in the postal and Telecommunications services

GENEVA (ILO News) ­ Increasing competition from private enterprises, new means of communication, elimination of monopolies and the growth of such new media as the Internet pose major challenges to workers in postal administrations and telecoms around the world, and will prompt increasingly rapid changes in the nature of jobs held by millions workers world wide, especially women, according to a new ILO report.

Press release | 20 April 1998

GENEVA (ILO News) ­ Increasing competition from private enterprises, new means of communication, elimination of monopolies and the growth of such new media as the Internet pose major challenges to workers in postal administrations and telecoms around the world, and will prompt increasingly rapid changes in the nature of jobs held by millions workers world wide, especially women, according to a new ILO report. (Endnote 1)

The report, prepared for a tripartite meeting in the postal and telecommunications area, notes that postal and telecommunications services, traditionally organized on the basis of public monopolies or private quasi-monopolies, have often seen a decline in the number of jobs over the past decade.

However, the report also says that the growth of new enterprises ­ often recently established or the subsidiaries of existing enterprises as well as telecoms and the Internet ­ will offer new prospects for ultimately increasing the number of jobs in the sector.

Governments from some 20 countries will meet on 20-24 April with representatives of trade unions and employers from privatized and public postal and telecommunications operators at ILO headquarters in Geneva to discuss liberalization and deregulation practices, social implications of privatization and restructuring, labour relations, working conditions and human resources development and training.

The report cites data from the 1995 World Telecommunication Development Report showing that employment in the public telecommunications services sector has fallen by 6% since 1982, with significant reductions in the Asia Pacific region (-25%) and in North America (-23%).

Among public postal operators (PPOs), employment increased slightly in some industrialized countries such as the United States or the United Kingdom between 1990-1995, while in most other developed countries the number of postal employees remained stable or decreased.

"Employment in most PPOs of the European Union is expected to decrease up to the year 2000," the report says. "Most redundancies have occurred in postal deliveries, counter services, letter and parcel sorting and transportation sectors."

The report states that as a result of the rapid pace of change in the telecommunications sector, workers will face the prospect of a two-stage change in employment. In the first phase, traditional telecommunications operators may lose between 25% and 50% of their staff, mainly in occupations made redundant by technology or "externalized" following a refocusing on commercial and high value-added services. The report cites one study by BIPE Consulting Group, prepared on behalf of the European Commission, predicting that British Telecom, for example, "will experience another 45,000 to 55,000 redundancies, depending on the scenario chosen, from now until the end of the century."

The study goes on to say, however, that this initial phase may be followed by a "change in the nature itself of employment," (now being seen in particular in the United States for example) in which "permanent adjustments and redeployment follow one another at a brisk pace." In the postal sector, the report cites the example of Sweden, where following the liberalization of the postal sector at the beginning of the 1990s, around 1,000 new jobs were created by new enterprises.

The report notes, however, that this two-phase scenario may not occur everywhere, adding "on the contrary, this two-phase movement in the evolution of employment could be accelerated ­ even bypassed ­ in its first phase in various countries as a result of new techniques (satellites, mobile telephones, alternative enterprise structure) allowing some regions to save on complete telegraphic infrastructure ­ as well as a desire for rapid withdrawal by States for budgetary reasons."

"Creative destruction" and "destructive erosion"

The report cites examples of changes in occupations, termed "a creative destruction." It notes that already in the early 1990s, various occupations were on the way out: operators of manual telephone exchanges, traditional fitters and linesmen, staff of telephone directory inquiry services affected by computerization and the introduction of electronic directory services, workers in manual sorting stations and clerical employees whose daily jobs are increasingly performed by office machinery.

"The evolution of occupations has increased since the beginning of the 1990s," the report says, "and totally new functions have appeared, in particular those related to access services to the Internet or multimedia."

Not only are new occupations appearing, but the separation line between various occupations and some branches is blurring with computerization encouraging versatility and distance work, the report says. At Telecom Italia, for example, a company-level agreement negotiated and signed in 1995 allowed the redeployment of staff, such as operators who would otherwise have run the risk of dismissal, to home where they could work on a part-time basis.

Meanwhile, the legal status of employees is seeing a "destructive erosion." Job security, for example, has been sacrificed in the process of structural reform, resulting in an increase in the precariousness of employment as a result of a move from a technological and/or public logic to a commercial logic.

"The organization of enterprises (including postal services) by type of market reflects the priority given to the client over functions of general interest," the report says, adding that while public service functions and client interests may coexist, "the consequences of such an evolution appear to be considerable for the status of employees and the manner in which they exercise their occupation."

The report cites the example of Deutsche Telekom which halted recruitment of public employees since 1995. At the same time top management has called for a move from an administrative status of the operator to that of a multinational on markets opening up to competition.

Transformation of the Malaysian Department of Telecommunications into an enterprise ( Telekom Malaysia) in the 1980s, for example, resulted in the transfer of all staff into the new publicly owned company, with job stability guaranteed for five years. Subsequently, in the 1990s, employees whose work had become obsolete (manual operators, accountants) were redeployed while analysts and programmers were recruited.

Impact of changes on female employment

The new realities in the postal and telecommunications services are expected to especially benefit female workers who, though large in numbers, often perform low-paying and low-skilled jobs.

Citing Malaysia as fairly characteristic of the general trend in the employment of women in telecommunications, the report says women are beginning to take up technical or management jobs. Whereas in 1990 almost 25 percent of Telekom Malaysia employees were women (mostly employed at that time in data entry operations, administrative jobs or as operators), since then women with technical or commercial skills have been increasingly sought.

The report notes that the same conditions apply where automated sorting systems have become increasingly used and electronic communications of all kinds are growing faster than ever. Thus, in the European Union, women's share of employment increased from 18.9 % in 1990 to 24.6 % in 1995 among public postal operators. Except for Finland, the figures have increased in the public postal operators of every Member State.

"The reorganization of working time and the development of the information society ­ which is substantially based on individual skills, experience and talent ­ should encourage the growth of female employment in the emerging or future new services," the report says.

Impact of the growing telecommunications sector and the Internet

According to studies cited in the report, a significant number of jobs should be created by new network operators resulting from the gradual opening up of markets to competition, as well as by providers of telecommunications services. New operations and service providers in the European Union could lead to creation of between 114,000 and 162,000 new jobs by 2005, although this rate of expansion may not cover job losses among traditional operators.

"The new jobs created are appearing above all in sectors adjacent to communications, in various activities linked with multimedia convergence and the information society," the report says. "The postal services, as a result of the use of new technologies and their frequent offer of financial products or saving devices, should be affected more or less directly by this tendency."

While the loss of jobs among traditional telecommunications operators in the industrial countries may be offset, to some degree, by the "creation of new and dynamic enterprises and individual job-creating initiatives", the report notes that most new jobs should result from the arrival of new entrants, whether they establish their own networks, or use those of existing or alternative infrastructures, or offer new services with labour recruited specially at market cost or on a temporary basis.

"Internet service providers (which are developing at a rapid pace) and, more generally, the providers of on-line information services, are developing as a result of the rapid growth of computerization in homes and among small and medium enterprises," the report says. "Furthermore, many enterprises which repackage information which is provided through servers are being increasingly used, as well as content editors or intermediation companies which put together virtual commercial centres."

Endnote 1:
Structural and regulatory changes and globalization in postal and telecommunications services: The human resources dimension. Report for discussion at the Tripartite Meeting on the Human Resources Dimension of Structural and Regulatory Changes and Globalization in Postal and Telecommunication Services. International Labour Office, Geneva, 1998. ISBN 92-2-110966-6.