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Younger managers may chafe less about employment gaps than their elders, but they still feel the effect in their paychecks

August 1, 2003

For more information, contact: Benjamin Haimowitz, HHaimowitz@aol.com

During the past 10 or 15 years, corporate downsizing and widespread employee dismissals have spread beyond blue-collar ranks to include managers who earlier were largely immune from them. As a result, a new view has come to replace the earlier notion of managerial careers as uninterrupted climbs up the corporate ladder.

Indeed, some management thinkers have suggested that employment gaps, previously viewed as career handicaps, can have the net effect of increasing one's income in a new world of "protean" careers.

In a study presented at the 2003 annual meeting of the Academy of Management, Joy Schneer of Rider University and Frieda Reitman of Pace University explore whether employment gaps continue to take their toll on managers' income and whether younger managers respond to them differently than their elders did.

"Despite recent career views regarding the positive nature of protean careers and the prevalence of gaps, interruptions are still detrimental to a career as reflected in income penalties," Schneer and Reitman conclude. What has changed, however, is the attitude of younger managers, particularly men, to these gaps.

"It appears that men who experienced a gap two decades ago perceived it as a career failure, but those in the recent cohort no longer feel that way."

The findings are based on a six-page survey sent to randomly selected alumni who received MBAs from two northeastern universities. An "early cohort" consisted of 777 alumni who received their MBAs between 1977 and 1981 and responded to the survey in 1987; a "recent cohort" consisted of 400 alumni who received the degree between 1990 and 1994 and were surveyed in 2000. Both cohorts were about evenly divided between men and women, and the average age in each was 38.

Gaps -- voluntary and involuntary alike -- were reported by 22% of the early cohort and 18% of the recent cohort, with the average gap for each group being about eight months. For both groups, gaps carried a substantial penalty in terms of annual income at survey time, with those in the early cohort earning on average 25% less and those in the recent cohort 18 percent less than fellow alumni who had worked continuously. But whereas in the early cohort men with employment gaps were significantly less satisfied with their careers than those who had worked continuously, in the recent cohort gaps were not linked to a fall-off in satisfaction among either men or women.

Seeking reasons for this, the authors surmise that there may be "a new appreciation that the traditional managerial ladder is not the only acceptable career path."

But they also note that the career gaps of the recent cohort occurred mainly during the bull market of the 1990s, when managers might be more complacent about career gaps than at other times. As the authors put it, "It will be interesting to see whether the gap effects that were found at the peak of an economic expansion and an era of optimism continue as the phases of the business cycle go forward and as the globalization of industry continues."

The Academy of Management, founded in 1936, is the largest organization in the world devoted to management research and teaching. It has over 13,000 members in 90 countries, including some 9,000 in the United States. The academy's 2003 annual meeting drew some 6,000 scholars and practitioners to Seattle for more than 1,000 sessions on a host of issues relating to corporate organization, the workplace, technology development, and other management-related subjects.

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