Is the New Economy Family-Friendly?

The passengers on the morning commuter train from San Francisco to Silicon Valley, who look young enough to be carded at happy hour, are clad in shin-length, hip-hugging jeans and trendy pleather jackets, bopping their bleached-blond heads in time with the music from their CDman players. Although they may excel at office foosball and be handy users of PlayStation, the new economy's supposedly new breed of workers is not all fun and games. I count 12 people in my car punching away at their laptops and five others on cell phones arguing over cost reductions and ordering accountants to redo configurations. Caltrain officials say that more and more of these commuters are returning as late as the 9:00, 10:00 and 11:00 p.m. trains. According to the latest survey by The Industry Standard, a magazine that tracks what it calls the "Net economy," the majority of "Internet professionals" stay in the office at least one weekend each month.



The typical start-up company's job ads offer not pensions but stock options, not vacations but Poof Chairs--perks that will keep workers at their keyboards. Consider this statement from iVMG, a new "network technology company" currently not divulging what its products or services will be: "iVMG takes care of its employees. From unlimited stocks of juice, soda and Red Bull (for those all night work sessions) to candy and daily catered lunches ..." If this is the good life, it is a far cry from what most Americans--struggling to find a saner balance between the demands of their jobs and their home lives--would have wanted or imagined.



Undoubtedly, the recent explosion of new Internet-related businesses presents a great opportunity for changing the way Americans work, an opportunity to create nontraditional workplaces that accommodate employees' family and community lives--that, in fact, support them--without sacrificing chances for professional success. After all, these businesses make routine use of new cyber-technologies that could sustain flexible work/home arrangements. In many cases, they are also flush enough to provide generous family-friendly benefits: not just family health care, but paid leave for dependent care, paid parental leave, adoption benefits, and child care subsidies. Perhaps equally important, they have an image of themselves as daring and experimental, as an industry whose business it is to break the mold. "When we talk about the new economy, we're talking about a world in which people work with their brains instead of their hands," Wired magazine's Encyclopedia of the New Economy gushes. "A world in which innovation is more important than mass production... . A world in which rapid change is a constant... . A world so different its emergence can only be described as a revolution."



The new economy is also fighting a war for talent in which a "revolutionary" package of work/family policies could be a powerful weapon. According to the U.S. Department of Commerce's Office of Technology Administration, between 1996 and 2006 "the >United States will require more than 1.3 million new highly skilled IT [information technology] workers." Says Spencer Reiss of New Economy Watch: "Almost every company [in the industry] is in permanent hiring mode." In such a sellers' market, labor can make some hefty demands. So why is the new economy best known for its tension massages and all-nighters?




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Worker #21



I get off the Caltrain at the Palo Alto station, a posh enclave of coffee shops, smoothie stands, sushi bars, and Internet start-ups near the Stanford University campus. Right off the main drag, in an incongruously quaint Queen Anne-style house, is Garage.com, a company that matches new Internet businesses with venture capitalists. Its logo--"we start up startups"--tells exactly what Garage.com does. It tinkers under the hoods of fledgling businesses (fixing business models, marketing strategies, budgets, and recruiting campaigns) until they are ready to be released for initial public offerings (IPOs). Two years after its own launch party at a Silicon Valley Mercedes shop, Garage.com has opened branches in Boston, Seattle, Austin, and even Israel. It has raised more than $200 million in venture capital for over 60 clients.



I'm here to meet Amy Vernetti, Garage.com's "human capitalist," whose main job is to help start-up entrepreneurs figure out how to attract talented employees. More than one admiring entrepreneur has told me that Vernetti is a pistol in the world of recruiting, and a few days later I get to see her in action at one of Garage.com's famous Bootcamps for Startups. This is the latest in a traveling series of conferences that have provided thousands of aspiring Internet entrepreneurs (for up to $1,200 each) with a crash course in business development and a windfall of industry contacts. Vernetti politely navigates through a throng of entrepreneurs and job seekers competing for her advice, grabs a sandwich, and troubleshoots the next speaker's schedule while we do an interview surrounded by her frantic, laptopped co-workers. She balances her high-pitch work life with the needs of her two children: Nate, who is seven, and Madi, now five. "I'm a single mom," she says, "and I took a huge cut in pay to do this at Garage.com, so I'm the person all those work/family people are talking about."



Before her debut a year ago as Garage worker number 21 ("We wear the number like a badge," she says with a laugh), Vernetti worked for the largest executive search firm in the world, Heidrick and Struggles. "I was responsible for a very tiny Amy Vernetti portion in the whole Heidrick and Struggles grand scheme of things. I had about $1 million that I was responsible for. Since this was a $250-million company, I was, like, one two-hundred-and-fiftieth of the overall picture of the firm. When someone needs to speak with somebody at Garage.com about human capital--that's me. If someone had asked to speak to a person on human capital at Heidrick and Struggles, well, I was the youngest of 150 consultants out of a 3,000-person employee pool. I was number 150 there... . I came to Garage," she grins, "because I can talk to the CEO anytime I want."



Vernetti also cut a deal with Garage.com that allows her to work a few days a week from home. At Heidrick and Struggles, she remembers, "it was supposed to be easier," with the company even "sort of helping you to telecommute. They had a friggin' telecommuters' support group! But I think my promotion was definitely put off by how much time I telecommuted. I sat with the managing director one day at Heidrick, and we decided that if I was gonna be on this promotion path, I needed to put in more face time."



Vernetti defends companies that offer benefits on paper but allow individual managers to impede usage of those benefits. Although she often advises start-ups to recruit at least a few older and more experienced workers, she tells both job seekers and employers that it's up to the employee to bargain hard for the working conditions he or she wants--and to be realistic about the conditions a company actually offers. "When you hear that a single mom joins a company where they required her to work 100 hours a week and she's miserable, you have to put a lot of the responsibility back on the person for making what I think is a really irresponsible decision." At Heidrick and Struggles, Vernetti says, "it was my choice. If I wanted that promotion, [I knew] what I had to do. You can say that's unfair and that every person should have the opportunity to be promoted even if they're a telecommuter, but we all make choices. I mean, people don't get to be CEO if they choose badly. So you have to sacrifice your personal life, and if anybody tells you that you don't, or that you shouldn't have to, or that all you have to do to avoid those choices is organize, that's crap!"



Vernetti herself, however, moved to a company where her choices were different.



So did Eric Muller, a father of two children under age three and a director at Garage.com, who joined the company at nearly the same time as Vernetti. He came from Booz Allen and Hamilton, an old-line management consulting firm that boasts of its listing in Working Mother magazine as one of the country's "100 Best Companies for Working Mothers." But even though Booz Allen offered a variety of work/family benefits, Muller says, the office culture often discouraged their use. "It was just really intensive. It was hard to do, like, 70 hours a week." But the alternative, says Muller, was definitely a second-class mommy track. "It's like you're a sports player and you're getting killed and the enlightened coach says, 'Maybe we can segue you into offensive coordinator.' So he's giving you an option, but he's, like, 'If you wanna play ...'"



When he was interviewing at Garage.com, Muller straightforwardly explained that he did not want to sacrifice his family to his job: "It's one thing for adults to agree, 'Hey, let's work at our careers,' but, especially when you get to having kids, it just is really hard to juggle." At Garage, Muller says, he's involved in all parts of the small company. He also got the working arrangements he demanded: He travels rarely and works from home every other week to be around his children.



By all accounts, there are many such seasoned workers, attracted to the excitement of the start-up world, who have been able to leave blue-chip companies to join the new economy because they hold enough cards to make contractual demands and because the new companies they join are informal and successful enough to meet their individual needs. Yet so far, these experienced employees seem to have had as little impact on the neweconomy workplace as Vernetti's personal preferences have had on the advice she gives. The Industry Standard reports that only 12 percent of high-tech companies guarantee male and female employees paid parental leave; only 7 percent of Net employers offer child care.



The data are limited--and, they can be confusing because there are so many different ways of defining the new economy--but plainly no work/family "revolution" is underway. Indeed, industry watchdogs say the few Internet businesses that do have formal work/family policies in place are not the start-ups; they are mostly older, established companies trying to retain the employees they need for their Internet-related operations. Jean Bourne, the senior vice president of Wells Fargo Bank's Internet Services Group, says her bank has had to work very hard to keep employees from jumping to cutting-edge companies. Flextime options and other family-friendly policies, she says, have improved the bottom line. "In fact, we now see [them] as one of our competitive advantages. We have all these things which say, 'Hey, we know your life is bigger than Wells Fargo.'"



Many of the new start-ups, whose easy-come, easy-go style of operation is supposed to be the model for our economic future, can hardly guarantee salaries, much less benefits, and as a result they don't expect or try to attract "older" workers with family responsibilities. While there are no reliable figures about the age of start-up employees or about how many have children, there's wide agreement in the industry that the vast majority are young and have none. These workers tend not to ask for work/family benefits, and, as a result, neither their employers nor their legislative representatives have reason to provide them (as contractual benefits or as government mandates) on any systematic basis.



So the all-nighter culture thrives. As Kristin Foss, formerly an engineer at RayNet and now an at-home mother, describes the dynamic: "None of us [women] wanted to admit that anything changed when you became a mom, so we were fighting this idea that you'd want to spend less time at work." She recalls two co-workers who took time off for parental leave. "It definitely affected everyone's view of their sort of being soft, which, if you look at it and look back and think that at eight, nine months pregnant they both were working 60 hours, it's amazing anybody thought they were soft. [But] I hadn't had children or been pregnant, and none of the men had, so we didn't have any idea. I can specifically remember one woman was like, 'Excuse me,' going to the bathroom and throwing up, and then coming back and continuing to work. It was going on, but no one took an extended leave and no one worked 40 hours a week."



The Boys' Club Reborn



Bootcamp for Startups at San Francisco's snazzy Hyatt Regency is filled with twenty-somethings, and they're in entrepreneur heaven. They surround laden banquet tables, making eager small talk with potential key investors and employees. Corporate sponsors, not a dirty word in this world, ring the conference room: IBM, The Industry Standard, Silicon Valley Bank, Microsoft, Forbes, Hewlett Packard, the San Jose Mercury News. Elaborate displays compete for attention with nifty handouts--shiny bouncing balls at one booth, late-breaking publications at another, candy at a third--as if there were an unwritten commandment: Let No Moment Go Unmarketed.



This is a networking boys' club (when the occasional woman walks by, heads turn unabashedly in her direction). Its members talk about missing the football game, not about missing a child's school play. They willingly offer to "put my life on hold," gambling that the payoff will come sooner rather than later. During a break between Bootcamp sessions, Ed, who prefers to use first names only, tells me that lots of young workers like himself are willing to do anything for the quick buck. Taking a long drag on his cigarette, he explains, "I'll work my butt off for a few years, make a ton of money, and then I won't have to worry about things like child care because I'll be able to pay for it all before I even have kids." Ed recently graduated from high school and sees no need for a college degree, much less an MBA. He refers to himself as a "jumper"--a person who hops from one start-up company to the next, looking for that big stock option bonanza. If the company crashes, well, just pack up and move to the next adventure.



Young daredevils like this, with few outside responsibilities, promise plenty of bang for a start-up company's buck. They're considered inventive--in that particular fast-paced and high-rolling way that the new economy is said to require--and in the meantime, they won't object to multi-tasking, won't complain about long hours, and won't face hungry children and a mortgage if the company tanks and the stock options don't pan out. "I would never say that you shouldn't try to get a bunch of twenty-somethings to kill themselves working for you," Amy Vernetti acknowledges. It's the logic of the market.



Logic like this ultimately allows companies to avoid any greater social responsibility--for the stresses on the "overworked American," for the families living under siege conditions so as not to disrupt the flow of production. Logic like this, Vernetti admits, is how she ended up divorced. "My marriage was the casualty of the whole situation," she says.



If the logic of the market alone determines how workplaces work, how can we expect to have healthy American marriages, families, and communities?



People like New Economy Watch's Spencer Reiss have an answer. They are convinced that outfits like Garage.com are in the best position to deal with the endless conflicts between work and life. Other than basic health insurance and the unpaid family leave that federal law requires any company with more than 50 employees to offer, these are businesses with no formally institutionalized work/family policies. Instead, they accommodate workers' needs on a case-by-case basis. Their on-the-ground problem-solving flexibility, Reiss says, is one of the great advantages of the new economy. As Amy Vernetti explains it, "Guy Kawasaki [Garage.com's CEO] is in tune and cares. If you view your company as your family, then you can be in tune with, you know--oh, that person just bought a house or went through a divorce. These are things you can actually know and learn about people in a small company like Garage.com."



But her company is the Goldilocks of start-ups: Not too big and not too small, Garage.com is just right. It is large and successful enough to be able to meet people's needs and small enough to know what they are. Not all companies are as fortunate. Not all CEOs are Kawasaki. And not all employees are in high demand. As Wells Fargo's Jean Bourne puts it, "Workers make a mistake thinking a small firm can do the work/family thing better [just] because the atmosphere is more personal." Small companies, with no institutionalized commitments to their workers, are as likely as large ones to "do the work/family thing" inequitably and unreliably.



This is a lesson that employees without great personal bargaining power are already learning. Amy Dean of Silicon Valley's South Bay AFL-CIO Labor Council describes the new economy as an "hourglass economy" with "high-end employment, low-end employment, and very little in between. The 'knowledge' workers for the most part are doing okay," she says. "People at the bottom are not."



When most employees who could make work/family demands don't, and most who would like to make them can't, the chances are slim that the kind of free-agent negotiations that new-economy enthusiasts favor will do much to improve the way the American workplace operates. In an industry--or company--downturn, or if the tight job market were to ease, even today's limited individual arrangements could well be lost. There are only two ways to create a family-friendly work environment that will last, says Dean: "We will need to redefine American labor associations, and we will need to redefine our social-insurance programs" to protect the new, mobile work force.



In the meantime, however, the mores extolled by new-economy leaders do not bode well for working parents. Even well-intentioned Garage.com, at its Bootcamp for Startups, thoughtlessly affirms today's overwork chic. From the speech titles ("Life's a Pitch") to the war stories, this conference, like the culture at large, glamorizes the long hours and the family-punishing obsessiveness of new-economy businesses. Guy Kawasaki looks surprised when I ask him why work/life issues are not even addressed at this conference that's designed to train new-economy employers. "There are only so many sessions," he says.



In Bootcamp for Startups's final lesson, keynote speaker Robert E. Knowling, Jr., the chairman, president, and CEO of Covad Communications, is unflinching in his assessment: "The problem with workers in the new economy"--he jabs a finger at his attentive audience--"is the work ethic. When I was younger, I would get to work on Saturday at 9:00 a.m. and have to park my car in the back of the lot. Now when I get to work on Saturday morning, I can have the spot in front of the door. That shows me," he pauses and stares fiercely at the troops as one by one they lower their eyes, "that shows me that a commitment is lacking here." ยค

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