Flexibility Of The Workforce Notes

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...

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