In France, Italy and many South Eastern European nations, however, labor markets show rigidity and low mobility, including a failure in particular of temporary employment as a stepping-stone into permanent jobs. The discussion on flexibilization of labor, since the beginning of the eighties, has not kept pace with scientific research. [6] As companies adapt to business cycles and facilitate their needs through the use of labour market flexibility strategies, workers adapt their life cycles and their needs through it (Chung, 2006). h�bbd``b`Z$[A�+ � For example, a customer service representative who goes back to school to get training in the information technology (IT) sector is able to respond to the growing demand for IT technicians when vacancies arise. The more informed job seekers are about open positions, the easier it is for employees to respond to fluctuating conditions within a company's workforce and in the market, making it much more flexible. labor unions and employers' organizations tends to be given to further decentralized parties like works councils and individual employers recently. "[7] ETUC also emphasizes the importance of the development of working time flexibility as an alternative to implementing external flexibility as the sole method of increasing flexibility in the labour market (ETUC, 2007). Questions or comments regarding this blog? Such flexibilization of labor protective norms by the decentralized parties provide various legal and political questions. [1] In the words of Siebert,[2] labour market institutions were seen to inhibit "the clearing functions of the market by weakening the demand for labor, making it less attractive to hire a worker by explicitly pushing up the wage costs or by introducing a negative shadow price for labor; by distorting the labor supply; and by impairing the equilibrating function of the market mechanism (for instance, by influencing bargaining behavior)."[3]. Atkinson, 1984; Atkinson and Meager, 1986. It should be noted that this concerns the short and medium term in particular. Also called trade unions, these organizations represent the collective interests of a group of workers. This article addressed some of the factors that affect flexibility in the labor market above. Lean Library can solve it. There are more and more signals that the future labor organization without far-reaching forms of flexibility will not last long. 539 0 obj <>stream The most well-known concept of labour market flexibility is given by Atkinson. Looking at these and other studies in which the flexibility theme is dealt with, it can be established that there is an upswing. Some society journals require you to create a personal profile, then activate your society account, You are adding the following journals to your email alerts, Did you struggle to get access to this article? This picture can already be seen in India, where calls for flexibilization have gained ground in public discourse. It allows companies to make certain decisions about changing their labor force as a response to fluctuations in the market and to help boost production. Financial or wage flexibility occurs when wage levels are not decided collectively and there are more differences between the wages of workers. This is done so that pay and other employment costs reflect the supply and demand of labour. When this is the case, employers are able to set wages, fire employees, and change their work hours at will. "Labour Market Rigidities: At the Root of Unemployment in Europe". Conversely, when the economy is strong, the same employer may decide to give employees a slight raise and cut back on their hours. As in France, this transition is achieved by only a low percentage of workers in Poland, the Southern European countries, and the Netherlands. h�b```� ɶ�����b�, ��@ �^F톐$!�ԖM��lo)Lw�=�����p���� �v�@`æ�:��6 �@��@���>H� 1+ؕ���{2O ��#�!r�np��106�iF �0 )�3� [5] It can also be used as a method to enable workers to "adjust working life and working hours to their own preferences and to other activities". The desire for stable and secure jobs and the demand for flexibility are facing each other. Create a link to share a read only version of this article with your colleagues and friends. Little is known about the effects when the long(er) term is considered. It means that in negotiations between employees and employers, emotion prevails and statements are involved that do no good to the organizations concerned and ultimately the employees. Organizations have to deal with more and more dynamics, complexity and unpredictability. One of the real consequences of this phenomenon is the risk of a decrease in the level of future pension benefits, which can lead to the deprivation of pension system sustainability. In their report on working time, the Trades Union Congress has also argued that flexible working should be extended to all workers through stronger regulations (Fagen et al. Click the button below for the full-text content, 24 hours online access to download content. Increasingly, the common view is that labour market flexibility can potentially be used for both workers and companies, or employees and employers. This product could help you, Accessing resources off campus can be a challenge. The labor market refers to the supply of and demand for labor, in which employees provide the supply and employers provide the demand. With a dominant negative connotation when it comes to the impact on employees. Subsidies from the state budget will be necessary to the inadequate pensions. One such case is Poland, where 84 percent of the unemployed obtain only temporary contracts on reentering the labor market and just 18.5 percent of fixed-term workers find permanent employment in a given year. This expansion is reflected in the chain of urban and rural poor colonies mushrooming all over the archipelago. Our new study has examined and compared the mobility of the European labor markets. %PDF-1.5 %���� Labor market flexibility allows companies to make decisions about their labor force in response to market changes and to help boost production. When it comes to the extent to which organizations apply flexibilization strategies, it must be stated that systematic research, and thus substantiated figures, are generally lacking. 2) Relationship between Labor Flexibilization Strategy and Corporate Welfare Financial flexibilization as one form of labor flexibilization strategies involves What do we already see of this in practice? This includes part-time, flexi time or flexible working hours or shifts (including night shifts and weekend shifts), working time accounts, leaves such as parental leave, and overtime. Partly as a result of this, one in every two unemployed persons in these countries must settle for a fixed-term employment contract when entering or reentering the labor market. Both decentralization of negotiation and flexibilization of statutory norms These three conditions are displayed as a model in the figure below: The future belongs to the ‘Smart High Performing Organization’. Companies do not have carte blanche, however, to implement a flexible labor market because of laws and policies that protect employees and the labor pool. A flexible labor market allows employers to make changes because of supply and demand issues, the economic cycle, and other market conditions. $�k�ć:&F�9@#n����� �� If employees are now taken into consideration, the picture is somewhat different. Flexibilization has generated fierce legal debates, especially regarding the so-called management prerogative of firms to outsource jobs held by regular workers. A central element of the neoliberal phase of capitalism is the flexibilization of labor and the consequent prevalence of precarious work. Investopedia uses cookies to provide you with a great user experience. So we still see the examples of organizations in practice that are not adaptable enough to respond to new strategies and goals in a timely manner. 525 0 obj <> endobj In summary it can be said that a ‘Smart High Performing Organization’, in addition to a number of other characteristics, has a strong focus on time, planning and flexibility. Simply select your manager software from the list below and click on download. If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. We'll outline what a few of those factors mean for the labor market in this section. Chung, H. & Tijdens, K. (2013) "Working time components and working time regimes in Europe: using company-level data across 21 countries" International Journal of Human Resource Management, 24(7): 1418-143. Some of the widely used arrangements that enable workers more flexibility in their work include flexitime teleworking and part-time. 0 Our new study has examined and compared the mobility of the European labor markets. On the way to a ‘Smart High Performing Organization’. Knowledge process outsourcing (KPO) involves outsourcing work to individuals that typically have advanced degrees and expertise in a specialized area. The most common definition of labour market flexibility has been the neo-liberal definition. Organizations can make modifications to their labor pool based on certain factors such as employee hiring and firing, compensation and benefits, and working hours and conditions. In Estonia, Sweden, the UK, and Germany, workers are also more mobile than in the other EU countries.