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Flexibility Of The Workforce Notes

Economics and Management Notes > Employment Relations Notes

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Flexibility of the workforce Definition
? Degree to which a firm is able to adapt its human resources to meet changing conditions of the organisation's environment (uncertainty and competition). Ghosh et al. Found that reliance on a non-standard workforce is greater in a competitive environment, less prevalent in firms facing greater uncertainty (protection of core competencies), and the proportion of a firm's non-standard workforce is positively correlated with financial growth (cheap labour, low dismissal costs).
? For firms: either possessing a workforce able to adapt to new conditions or quickly learn new skills, or having the ability to change the workforce itself (Kalleberg).
? For employees: flexibility is an umbrella term comprising remote working, reduced/different hours, compressed working time (Kelliher and Anderson). Negative impact on career progression. Temporary employment and fixed term contracts
?????40.9% of non-standard employment (Fevre, 2007)
?????Serves as a buffer for firms against volatile demand. In high demand the workforce can be easily expanded, and in low demand easily shrunk (Geary). Eg Astra - large inventory to quickly adapt to oscillating demand, used 70% temporary employees, short term demand predictions, any permanent staff had to be signed off by conservative US management. Few rights accrued to temporary workers ? contracts easily terminated.
?????Firm rather than employee gains most of the benefits - employees have almost no rights, very little job security, and although they receive similar pay they lack the benefits given to permanent workers like healthcare or pensions.
?????Firm gains significant cost advantages due to the reduction in labour costs - so much so that firms often pursue this strategy not just to increase flexibility but to segment the labour market.
?????Geary 1993 study: an organization employed 70% of its employees on temporary contracts, partly due to flexibility but partly due to labour costs, as a control measure, and as a trial period before offering a permanent contract.
?????Firm extracts everything from temporary employment, bluntly controlling worker who are unwilling to turn down overtime out of fear for their jobs.
? Means those on permanent contracts can be protected, but this further subjugates the temporary worker to hostility and alienation as a result of internal politics.

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