Human Resource Management: Flexible Labour

INTRODUCTION: Why Flexibility? Need for Flexibility:

The concept of flexibility has permeated much of current human resources management thinking, providing justification for recent developments in more flexible and variable working patterns. Its need arises from the following:

The changing business environment- highly competitive "global" product markets, an increasingly rapid advancements in Information and Communication Technology (ICT) and increasing capital intensity of production.

A changing social environment– for example, the increasing female participation ratio and the trend towards early retirement and rising divorce rates.

Government policy environment – a desire to reduce unemployment and make the economy attractive to inward investment as a source of employment and long-term growth

Flexible Firm Model:

Atkinson and Meager’s model of �flexible firm’ identifies four types of flexibility that companies seek:

1. Functional: This refers to a firm’s ability to adjust and deploy the skills of its employees to match the tasks required by its changing workload, production methods. This is done by multi-skilling / dual skilling / dismantling of traditional rigidities between occupational groups (horizontal and vertical flexibility). This is designed to improve efficiency and reduce costs.

This is a core area of traditional conflict within the division of labour between distinct skilled groups and between the skilled and the non-skilled (Penn, 1985).

2. Numerical: This refers to a firm’s ability to adjust the level of labour inputs to meet fluctuations in outputs. There is increased use of part-timers, temporary, short-term contract staff, job sharers and agency workers.

There is a contrast between �core’ permanent workforce and �peripheral’ non-permanent. The general idea is that an increasing mixture of non-standard employment forms will be more efficient and cheaper.

3. Distancing Strategies: This refers to the increased use of other firms that undertake non-core activities such as catering, cleaning and transport. Such a strategy will be cheaper.

4. Financial: This refers to achievement of flexibility through the pay and reward structure.

5. Temporal flexibility: It is concerned with the pattern of hours worked and linked to the demands of the business. Seasonal or demand work is provided leading to Flexi-time systems. In addition, annual hours contracts allotted with increase in evening working.

These flexibilities are achieved through a division of employees into:

• Core workforce: The core group is composed of high-skill and high-pay workers recruited from the primary labour market. These workers are expected to deliver functional flexibility. Core group workers have brighter career and promotion prospects and they usually are provided with comprehensive training and development.

• Peripheral workforce: The peripheral group consists of two-types of group. The first group consists of generic-skill (e.g.: word processing) workers recruited from external labour market. The second group consists of workers recruited as required on variety of contracts (e.g.: Government trainees, job sharers, sub-contract labour, temps etc.). This group workers have low job security.

Flexible Labour Markets. - Benefits and Disadvantages

Flexible labour markets involve a minimum of government intervention, they are labour markets which work efficiently and are competitive. Many supply side economists argue flexible labour markets are of great importance in reducing unemployment and improving the competitiveness of the economy.

Advantages:

1. Opportunity to exploit 24-hour economy

2. Contributes to an improvement in the inflation-unemployment trade off

3. Flexible wages and flexible employment helps to ensure that markets clear rapidly eliminating any excess supply