Labour market flexibility
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Labour market flexibility refers to the degree in which labour markets quickly adapt to fluctuations and changes in society as well as in the economy or production. The most famous distinction of labour market flexibility is given by Atkinson(Atkinson, 1984; Atkinson and Meager, 1986). Based on the strategies companies use, ge notes that there can be four types of flexibility.
-External numerical flexibility refers to the adjustment of the labour intake, or the number of workers from the external market. This can be achieved by employing workers on temporary or fixed-term contracts or through relaxed hiring and firing regulations, where employers can hire and fire permanent workers according to the firms’ needs.
-Internal numerical flexibility, sometimes known as working-time flexibility or temporal flexibility. This flexibility achieved by adjusting working hours or schedules of workers already employed within the firm. This includes part-time, flexible working hours/shifts (including night shifts and weekend shifts), working time accounts, leaves, over-time and etc.
-Functional flexibility or organizational flexibility is the extent employees can be transferred to different activities and tasks within the firm. It has to do with organization of operation or management and training workers. This can also be achieved by outsourcing activities.
-Financial or wage flexibility is in which 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 cost reflect the supply and demand of labour. This can be achieved by rate-for-the-job systems, or assessment based pay system, or individual performance wages.
Other than the four types of flexibility there are other types of flexibility that can be used to enhance adaptability. One way worth mentioning is locational flexibility or flexibility of place (Reilly, 2001; Wallace, 2003). This entails employees working outside of the normal work place such as home based work, outworkers or teleworkers. This can also cover workers who are relocated to other offices within the establishment.
However, labour market flexibility does not only refer to the strategies used by employers to adapt to their production/business cycles. 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’(Jepsen & Klammer, 2004:157). Like this there is an increasing interests in trying to reconcile work and life balance of workers and also to reconcile employers' and employees' interest through labour market flexibility, especially through the use of working time flexibility (for example see Fagan, Hegewisch, and Pillinger for the TUC, 2006).
(Text from Chung, H., 2006).
Reference
Atkinson, J. (1984) Flexibility, Uncertainty and Manpower Management, IMS Report No.89, Institute of Manpower Studies, Brighton.
Atkinson, J. and Meager, N.(1986): Changing Working Patterns: How companies achieve flexibility to meet new needs. Institute of Manpower Studies, National Economic Development Office, London.
Chung, H.(2006) Labour Market Flexibility, for Employers or Employees? A multi-dimensional study of labour market flexibility across European welfare states. Paper presented at the 2006 Annual ESPAnet Conference, Shaping Euoropean Systems of Work and Welfare, 7th~9th September, 2006, Bremen.paper link
Fagan, C., Hegewisch, A., and Pillinger, J. (2006) Out of Time: Why Britain needs a new approach to working-time flexibility. Trade Union Congress, London. Out of Time report link
Reilly, P. (2001) Flexibility at Work: Balancing the interests of employers and employee. Gower Publishing Limited, Hampshire.
Wallace, C. (2003) Work Flexibility in Eight European countries: A cross-national comparison. Sociological Series 60.Institute for Advanced Studies, Vienna.
See Also
