The New Organization Man Young, educated, and fiercely in demand, "gold collar" workers are getting salaries and perks that would make a baby-boomer's thinning hair stand on end. Brats? Perhaps. But hey--they're not the ones who tore up the old employment contract.
By Nina Munk

(FORTUNE Magazine) – Everyone I know knows somebody, or knows somebody who knows somebody, who's made $10 million before the age of 35. It's always this guy, just a regular guy like you or like me, a guy I play ball with, a guy I went to school with--some guy who sold a chunk of his startup to a venture capitalist (or America Online or Wall Street or Paul Allen) for, like, tons of money. It's a familiar topic of conversation among ambitious young people, not because everyone wants to make $10 million (though that might be neat), but because stories like these have a tantalizing subtext that goes something like this: If the guy I play ball with didn't have to pay his dues, work his way up, spend 20 years climbing the corporate ladder wearing a tie, then why should I? At a dinner party I attended a few months ago, Jonathan Foreman, a 32-year-old who dumped his job as a corporate lawyer with a white-shoe law firm, captured the prevailing attitude when he scoffed, "You do your four years at a top college, three years at law school, and then they tell you that you have to pay your dues for another eight years to become partner and make $200,000!? Thanks a bunch."

Impatience and self-confidence define today's educated young American worker, and everywhere employers are having to adapt. "People used to do anything to get a job," recalls Jon Bond, co-chairman of Kirshenbaum Bond & Partners, a hip New York ad shop. "A couple years ago a guy came in and stenciled every square of toilet paper with the words, 'I'm willing to start at the bottom.' Another guy sent me a plastic mannequin's leg with a note that said, 'Now that I've got my foot in the door, check out my resume.' " Bond pauses nostalgically. "Today everyone thinks they're entitled to a job," he continues. "Last week a woman we didn't hire sent me a note letting me know she was hired elsewhere. The note read: 'You lose.' "

In the old days, such attitudes were unimaginable; they would have been self-defeating. But with the U.S. unemployment rate at 4.7%, about the lowest it has been in a quarter of a century, companies are no longer in the driver's seat. Employees are in control now--especially, as the population ages, young employees.

Today more than two thirds of American adults are in the labor force. That's the highest participation rate ever. And still there aren't enough good people to satisfy employers. "In some parts of the country just about anyone who can breathe and is ambulatory has a job--and in some cases they'll make exceptions," declares Ken Goldstein, an economist for the Conference Board.

Everyone is not equal in this economy. The jobless rate for African Americans is 9.3%. And last year some 430,000 job cuts were announced. In this economy the people with leverage are knowledge workers of a certain (young) age, so-called gold-collar workers: Anyone who's educated, smart, creative, computer literate, equipped with portable skills--and demanding. People like Jonathan Foreman. Just about everyone is desperate to hire these people. The unemployment rate for college graduates is 1.9%. If it were possible, the jobless rate for gold-collar workers would probably be less than zero. In San Diego at this moment there are 3,000-odd open spots for engineers and 2,000 positions for technical professionals. "If anyone's interested, tell them to call me," pleads Julie Meier Wright, who heads the San Diego Regional Economic Development Corp. Lockheed Martin needs to hire 4,700 skilled college graduates this year, more than double the number it hired last year. "We're not sure we can do it," confesses Tracey Staley, Lockheed's head of university relations. McKinsey & Co., the big consulting firm, hires one in every ten Harvard and Stanford MBA grads, but still its demand for talent outweighs supply. "We've gotten to the point where we've tapped out," says partner Lenny Mendonca.

In some fields the labor crunch is so severe that new young hires earn more than senior people at their company. The distortions are mind-boggling. In 1996 some 47,000 jobs opened up worldwide in the field of computer animation, according to the Roncarelli Report, an industry survey. But only 14,000 animators graduated from art school. With a little experience, these people can earn $100,000 a year. Young animators considering a job offer from Pixar--the company that created Toy Story--may even get a personal call from Chief Executive Steve Jobs.

It goes to your head.

Now that $10,000 to $20,000 is a common signing bonus for an MBA student, the best students know to hold out for more. Neil Hunn, 25, a second-year Harvard MBA, has job offers from two consulting firms. Naturally the salaries offered are splendid. But Hunn expects more than a bimonthly paycheck. One of the firms promises full-tuition reimbursement or a signing bonus worth about $40,000. The other is offering him equity stakes in companies he does consulting work for--future earnings that Hunn confidently predicts will be worth far more than the cost of two years at Harvard.

The current economic expansion has been going on for so long now that few people under the age of, say, 28 have faced a downturn during their working lives. They're bull-market babies, audacious, presumptuous, entitled--and utterly unprepared for any possibility of recession. Consider the expectations of kids coming out of school right now. This year's college grads are being treated like star athletes: They're wooed by dozens of suitors, all competing to make an impression, all fighting over the best students. Lockheed Martin used to interview students in January and make offers about a month later. Now the company interviews in October and makes offers within 24 hours--this for a job that begins in June of the following year. Jerry Batt, a billing systems vice president at AT&T who recruits for the company in Texas, volunteers as a guest lecturer at University of Texas A. & M., Texas Tech, and U.T. Austin. What does he get in return? "The names and E-mail addresses of all the students," he says shamelessly. "We're recruiting the equivalent of athletes here. You have to keep targeting them earlier and earlier. By early junior year we've already begun to develop a target list." Batt has other recruiting secrets, but those he won't share: "There are a few practices I'm going to hide because I don't want our competitors to know about them," he says. "Hey, it's tough out there."

Some companies don't even wait until students graduate. At DigiPen Applied Computer Graphics School, a school for videogame developers in Vancouver, British Columbia, top students are lured away in their second or third semester by corporate scouts. "Right after Christmas is the worst," DigiPen President Claude Comair says with disgust. "That's when projects start gearing up for the next year. That's when they [the scouts] start acting like bees collecting pollen... Some companies will pull me aside and ask, 'How much will it cost to get these students?' "

During the 1996 University of Michigan football season, companies spent between $500 and $2,000 to sponsor tailgate parties for MBA students. In 1997 the minimum spent by a company was $2,500. Sprint spent over $5,000 to host 450 students at a breakfast tailgate before a game against Ohio State. The company pitched a huge tent next to the football field and kept it comfortably warm with three propane heaters. Chefs prepared fruit-topped pancakes and quiche Lorraine. Student bartenders mixed mimosas. Meanwhile, Sprint representatives handed out 600 phone cards good for 15 minutes of long-distance calls and gave away Polartec scarves with Sprint's logo.

When demand for talent so outstrips supply, startling salaries, bonuses, and mimosas are just the beginning. Naturally, gold-collar workers expect to be well paid and well fed. But they also think they're entitled to a job that's fun, a job that's cool, a job that lets them discover who they really are. Work is not about paying the rent; it's about self-fulfillment. Contrary to the old Gen-Xers-as-slackers myth, this lot often works so hard their jobs become their lives. Listen to Richard Barton, the 30-year-old head of Microsoft's Expedia, a Website that lets you book your travel online: "Work is not work. It's a hobby that you happen to get paid for."

That's the mantra of today's desirable young worker. And forward-thinking companies are tapping into it. Go to Patagonia's Website, for example. Under the heading WORKING AT PATAGONIA is a group photograph of employees wearing shorts and Teva sandals; all around are dozens of surfboards. This is not like a workplace; it's like a playground. A few more clicks of the mouse and you'll view a big photo of a young man (presumably an employee) at work. He's idly tapping at his keyboard, his bare feet propped up on the desk. At Netscape's corporate Website, we're told: "Mere words cannot capture the spirit of working at Netscape, so picture yourself at events like these..." Now we're shown Polaroid snapshots of employees jiving at the Second Anniversary Jazz Festival and hanging out with their beer at the All Hands staff party.

Like permissive parents, cool (that is, desirable) employers let employees do what they want to do. At GoldMine Software Corp. in Pacific Palisades, Calif., the company fridge is filled with Sierra Nevada (a hip microbrew) and Pete's Wicked Ale. Some GoldMine employees wander down the halls in socks or bare feet. "It's like the coolest house I lived in at college; everyone has this weird, wacky thing about them--everyone's totally different--but we all get along so well," raves a GoldMine staffer. At Vantage One Communications Group, a marketing firm in Cleveland, employees take a break by playing foosball in the company's rec room. Last year Vantage One's staff competed for a pair of World Series tickets. One staff member drank beer through his nose; the winner was a graphic designer who grossed everyone out by eating a can of Spam with an uncertain provenance.

A booming economy, a low unemployment rate--those aren't all that gold-collar workers have in their favor. Demographics are on their side. Three years ago the country's 78 million baby-boomers started turning 50. In their wake is Generation X, or whatever you call the 45 million people born between 1965 and 1977. They're the new work force, and by comparison with the boomers, there aren't very many of them. Companies are now scrambling to adjust to the Xers, who really don't much care about the 401(k) plan--though they'll gladly take it. Nor are they much impressed with on-site child-care centers--most of them don't have kids yet. They dream about another set of perks. If for boomers bringing the kids to work is a nice perk, for single twentysomethings, bringing your pet to work is much better.

At Kinetix, a San Francisco company that develops 3-D animation software (the dancing baby on the Ally McBeal TV show was one of their demos), employees can bring their pets to work if they so desire. Roberto Ziche, a 29-year-old software engineer, brings his bird, Reika, a little lime-green and red parrot. Reika hops about Ziche's office all day, jumping from his keyboard, across the top of his monitor, and stopping for a rest sometimes on Ziche's head. "She's a pleasant diversion," says Ziche. But there are drawbacks. "When I am on the phone she gets jealous and starts screaming and biting and messing up everything on my desk. And unfortunately you can't teach her to poop in one corner; she's not a dog. The bathroom is the desk, and every time she poops I have to clean."

When many of the most desirable employees out there are twentysomethings, it is no surprise that adolescence, with its eternal quest for romance, now reaches beyond college and into every nook and cranny of corporate America. Some companies resist this trend, fearful that once the precedent has been set there's no going back. But in a labor market as tight as this one, if your competitor lets employees keep a birdbath in the office, you may have no choice but to follow suit. See, gold-collar workers are plugged in. They've heard about people like Ziche and his colleague Mark Warwarick, who brings his French bulldog, Bianca, to the office. They've read about employees who get to furnish their offices with beanbags and surfboards and cappuccino makers. They know people who get to set their own hours. And it's got them thinking, "Hey, I want that too." So now every company has its agitators who demand perks that would have been unthinkable just a few years ago.

Linda Pantaleano can attest to this phenomenon. She heads up recruiting for Progressive Corp., an auto insurance company based in Mayfield Village, Ohio. In 1997, Progressive increased its work force by 38%, to 13,600 employees. Two years from now Progressive expects to have some 20,000 employees. You don't hire that many people in this tight labor market by telling them they should be grateful to be working for you. It's not 1930. Instead you make concessions. First it was casual Friday. Now every day is casual Friday. Work schedules used to be fixed, but not anymore. Employees can now hang loose. One works at home on Fridays and leaves at 3 P.M. on two other days of the week. Another one telecommutes from out of state. "A year or two ago those kinds of demands would never have been met. Things have really changed; the power has shifted. Now it's a daily negotiation with employees," says Pantaleano. "The worst nightmare is a manager who hasn't replaced anyone in a while. They don't realize that things have changed. It's a very painful process. First they're horrified, then they turn around and say, 'You must not be sourcing right; there must be better people out there.'"

Perhaps there are better people out there. Perhaps there aren't. Either way, it's now so hard to find better people that it's best to do all you can to hold on to employees you already have. Ken Slavin, 36, works for the Atkins Agency, an advertising company in San Antonio. Last October, Slavin got an offer with a 40% raise from a FORTUNE 500 oil and gas company. His boss at Atkins Agency immediately countered with a 50% raise and the question, "What will it take to keep you?" Slavin is a part-time lounge singer; three times a week he sings Cole Porter and Rodgers and Hart at San Antonio's old Fairmount Hotel. He croons at weddings and office parties, and every summer holds a concert to raise money for the San Antonio AIDS Foundation. So his boss encouraged him to accommodate his job to his lounge singing. Now, although he works a full 40-hour week at Atkins, Slavin comes and goes as he pleases. If he has to leave at 3 P.M. for a six o'clock gig, that's cool. "I pretty much write my own ticket," says Slavin. "It's ideal."

That's what it takes to keep them. Young gold-collar workers don't give a damn about saving for retirement. They want to make money, move fast, have fun, find themselves, and do what they please. And they want all that now. That's what my friend Paul explained to me when I bumped into him on a busy New York City street corner in December. Paul, 29, announced that he had just quit his job trading fixed-income derivatives at a big Wall Street firm to go out on his own. What? Why? Pulling his tiny Ericsson cell phone away from his ear, he told me: "It got to the point where I'd look up at the clock and it was two o'clock, and I'd wish it was five o'clock. The minute that started to happen I said, 'Life's too short to put up with this, man. I'm outta here.' I'm a big believer in doing exactly what you want to do."

Loyalty. Gratitude. Fortitude. They're dead, man. And who's the culprit? Maybe corporate America. After all, it was big companies that in the late 1980s and early 1990s ended the traditional employment contract. That whole loyalty-in-exchange-for-lifetime-employment-and-a-gold-watch thing no longer made sense. So they got rid of it. Hundreds of thousands of workers were fired. Now employees would be self-sufficient and responsible for their own careers. That new deal worked fine when there weren't a lot of jobs. But now that there are too many jobs, it's a disaster. Changing jobs every two years is no longer frowned on; gosh, it's encouraged. How else do you expect to get a huge raise?

Last summer, a Dilbert cartoon strip captured the new order perfectly. Dilbert demanded a 10% raise. When his boss refused, Dilbert announced he had an offer from another company that would bump up his salary by 15%. Right away the boss gave Dilbert a 20% raise. "I thought you said there's no budget for raises," said Dilbert. "Well," answered the boss, "it's supposed to be a secret, but our policy is to give big raises to people who spend their time interviewing for other jobs."

Corey Thomas, a senior at Vanderbilt University in Nashville, is only 21, but he understands how the new game is played. "My mother tells me to no end that she thinks I'm self-centered in my job hunt," Thomas says. "But the way I see it is that while I want a company that's good for me, I truly believe that if I don't perform they'll get rid of me in a heartbeat. My dad worked for Sears for 19 years as a security guard, and then he was laid off. I have to position myself so I can constantly watch out for myself. I have to be self-serving."

Seniority counts for nothing, it seems. Corporate paternalism is dead. New young workers know that loyalty is for suckers; a company can get rid of them at will. In late November, Corey Thomas already had three job offers: a consulting position at Deloitte & Touche that pays $45,000 plus a $5,000 "exploding" bonus if he accepted within ten days; a spot in AT&T's "fast track" leadership development program for around $50,000; and a $45,000 offer with a $2,000 signing bonus at IBM. An electrical engineering and computer science major with a 3.6-grade-point average, Thomas knows he's desirable. He's worked at AT&T for three summers in a row, so he feels loyal to that company, but he also knows that what really matters is how he positions himself for his next job. "Long term, I want to be in strategy management--I'm interested in turnaround situations--so I'm looking to work at a place where I can get management experience," he explains. So where will Thomas be working come June? Deloitte & Touche. "Deloitte & Touche offered me less money," he explains carefully. "But the potential raises are better--10% to 20% every year, if I perform. And I fully expect to perform." Does he feel bad about dissing AT&T? "I feel guilty not going with AT&T because they gave me a shot when few people would have. But the bottom line is that I believe that if they had the choice between me and someone more qualified, they'd take that other person." If loyalty isn't rewarded, what's the point of being loyal? It was AT&T, after all, that just two years ago announced that it was cutting 40,000 jobs.

There's no point whining about this new generation. Their view of the world isn't likely to change anytime soon--certainly not until the next recession heaves them out of work. So perhaps, to keep in step, companies need to alter their outlook. David Friedman, a partner at McKinsey who just completed a study on the changing U.S. work force, argues that the way many companies approach the labor market is outdated. Good companies have learned to respond immediately to every whim of their consumers. When it comes to their laborers, however, they're shocked--shocked!--when traditional methods don't work. "The stereotype is that Generation X thinks it's entitled," says Friedman. "But the people who sound like they have entitlement mentality are companies: They think they're entitled to have a work force that works like their parents did."

To help managers adjust to the new work force, some corporations are calling on 30-year-old Bruce Tulgan, founder of Rainmaker Inc., a consulting firm in New Haven, Conn. At corporate seminars, Tulgan distributes his own book, The Manager's Pocket Guide to Generation X. Here's a multiple-choice question taken from Tulgan's Awareness-Raising Questionnaire: "Many Xers spent a great deal of time alone as children, either because both of their parents worked, because their parents did not live together, or because their parents were permissive. As a result, what is the most common personality type among Xers? (a) Xers are nihilistic and unfocused; (b) Xers are independent and self-reliant; (c) Xers are neurotic and dependent." (I'm not making this up.)

Tulgan's clients include J.C. Penney, Deere & Co., Steelcase, Abbott Laboratories, and Domino's Pizza. "They all say the same thing," he tells me. "Gen Xers are hard to manage; they leave; they're disloyal; they have short attention spans; they don't want to pay their dues; they're arrogant; they demand instant gratification; they constantly clamor for feedback. Mostly, managers complain that this bunch won't play by the rules. I say, 'Why should they play by the rules? The rules are dead.' Young people are not mourning the loss of the old system, the old careers paths--we have nothing to gain from them."

So what does this bunch want? "That's easy," says Tulgan. "They want to be handed the remote control."

Which brings us back to employees who eat Spam for sport, wander the halls in bare feet, and clean up bird droppings from their desks. Why do employers put up with these eccentrics? Because guano is harmless enough. Because watching your workers drink beer through their nose is an easy solution to a labor crunch. If that's what it takes to make talented people feel they've been handed the remote control, so be it. The corporate goal is to hire and retain the most talented people on the block. And the best way to do that, it seems, is to let them do whatever the hell they want. Make them feel as if they're running things. Even stodgy old companies are catching on to the technique. Debbie Herd, J.C. Penney's college relations manager, explains: "It occurred to us that Gen Xers will work 90 hours a week if they have their own business. So we decided we needed to make them think they are entrepreneurs."

Some companies understand how easy it is to hand over the remote control--or to appear to hand it over. Exhibit No. 1: Joe Liemandt's office in Austin, Texas. Liemandt, the 29-year-old co-founder and chief executive of Trilogy Development Group, sits in a dreary five-by five-foot cubicle. That's all right; Intel's Andy Grove sits in a cubicle too. But that's not the point. At Trilogy, employees in greatest danger of being poached get corner offices. Liemandt's stake in the still-private Trilogy is probably worth close to $500 million. He doesn't need a corner office to keep him focused. Paul Rogers, on the other hand, is one of Trilogy's star software developers. He's 29. His office is simply grand. There's a breathtaking view of the hills, and against one wall a 20-gallon aquarium is filled with exotic electric-blue and tomato-orange fish that glide past pale coral rock. There's also a full-size Yamaha keyboard that Rogers plays when he needs a break. "It's all about keeping top performers happy," explains Liemandt matter-of-factly.

Keeping top performers happy can be a full-time job, but in this economy it's worth the effort. Just ask Walter Noot, 32, who is head of production for Viewpoint DataLabs International, a company in Salt Lake City that makes 3-D models and textures for film production houses, videogame companies, and car manufacturers. He compares the modelers and digitizers on his team to sports stars: high performers who sulk if they suspect they're getting less than they deserve. About 18 months ago his group declared that they wanted a refrigerator in the digitizing lab. Not just some bar fridge, but a bad boy, the kind with cold running water and an ice-cube maker. Recalls Noot: "They were like, 'If we don't get a fridge in here, we quit; we're done; we're toast.' It was like a mutiny. It was like the Bay of Pigs."

To buy a fridge is easy--even for a startup company. But what about buying employees? Almost every day, Noot found himself taking a walk in the park behind Viewpoint's office, assuring one employee or another that he or she was indeed valued, that he or she would certainly be paid more. When one member of the team was lured away by more money, everyone in the office wanted a raise. "We were having to give out raises every six months--30% to 40% raises--then six months later they'd expect the same. It was this big struggle to keep people happy."

Finally, Noot decided to do something radical. Now no one in his group gets a salary. They're still full-time Viewpoint employees, with benefits, but they're paid as if they were contract workers. Every project's team splits 26% of the money Viewpoint expects to receive from a client. Almost overnight salaries have jumped 60% to 70%. But productivity has almost doubled. Where the group used to have set hours, they now work when they please. One fellow works 24- to 36-hour marathons, keeping a pillow and blanket under his desk for catnaps. Some people work only at night. Whatever. "Now life is bliss," says Noot. "It has totally changed attitudes. I never hear complaints."

What happens when the market turns sour and this lot of bull-market brats is out of work? Who knows. There's no point moralizing. These are the grandchildren of the Organization Man identified by William H. Whyte in 1956. They've never heard of Whyte. They don't give a hoot about the organization. They don't own a gray flannel suit. In contrast to the old Organization Man, this bunch knows that the corporation is ephemeral. The new Organization Man, the modern gold-collar worker, is opportunistic and selfish and spoiled.

Have you got a problem with that?