Flexibility and
 Insecurity

Flexibility and Insecurity

1. definition

   • Flexibility refers to the willingness & ability of a firm to adapt its operations in response to changing circumstances. This will require a workforce that is multi-skilled & a culture that accepts change. It may, however, lead to increased uncertainty & insecurity within the organisation.

2. evaluation

   • The adoption of a more flexible workforce can be an attractive prospect for any modern business, offering a number of benefits: Reduced costs. Increased ability to respond to changing customer demand. Allows business to obtain the exact combination of workforce from the dispensable periphery. It also lead to a number of problems in long term: Creates insecurity among peripheral workers that leads to high level of staff turnover. Lack of loyal and multi-skilled workers for diversifying into new markets.

3. analysis

   • What is the pressure behind a change in production systems from inflexible (mass) to flexible(lean)? Does the workforce trust the management? What are the reasons behind a firm’s decision to choose a more flexible approach to staffing? Is it to be more helpful to staff? Or is it a way of maximising management control over staff, and minimising labour cost?

4. The need for a more flexible approach

   • Flexibility refers to the willingness and ability of a firm to adopt its operations in response to changing circumstances.
     • Businesses need a more flexible approach within their operation because of: Increasing competition means the market place is subject to frequent and often rapid change. Firms must respond to this. Many consumers want more customised goods and services. Fluctuating and seasonal demand All these lead to many firms adopting lean production, creating a multi-skilled and flexible

5. Achieving greater flexibility within the workforce

   • Ways in which firms can attempt to increase the level of workforce flexibility: Functional flexibility - workers become multi-skilled through job rotation (horizontal promotion)
     • Benefits Increased productivity. Reduction in disruption to production caused by staff absences. Greater employee motivation
     • Drawbacks Potential loss of production as workers switch between different tasks. Greater training requirements.
   • Numerical flexibility - using alternative to traditional approach to employing permanent full-time contracts, such as subcontracting, outsourcing, agency staff.
   • Time flexibility – moving away from traditional 9-5 working day and 38-hour working week, such as part-time, job sharing
     • Benefits Flexibility for employees who may have family and commitments during normal working hours. Help improve recruitment, increase motivation and reduce labour turnover. Reduced costs and a boost to productivity.

6. A model of the flexible firm

   • Firms need to identify a ‘core’ which forms the basis of all its operations, and a ‘periphery’, which consists of all other tasks needed to run the firm, but not central to the business. Hardy’s Shamrock Organisation – split the periphery into an internal periphery (the flexible labour force) and an external periphery (the contractual fringe) Benefits of flexible firm – Periphery can be increased quickly when needed to meet particular change in the market place.

7. Flexible operations and ‘hard’ HRM

   • ‘Hard HR’ managers may see a scope of increasing their control over staff. Full-time, permanent staff may find themselves threatened with being ‘outsourced’. Outsourcing is when a firm uses sources outside the business to undertake functions that used to be done internally. Benefit – turns what used to be a fixed cost (staff salary) into variable cost (can be adjusted depending in demand) Drawback – contractors have no loyalty to the business

8. Insecurity

   • The increasing desire for firms to increase their flexibility has generated a number of concerns – loss of job security for workers. An increasing number of workers have had to overcome an instinctive resistance to change by having to repeatedly re-train in order to carry out new job roles. Some would argue that demands for increasing flexibility within the workplace have created new opportunities and challenges.