Impact of the Changed Trend of Employment from Permanent One to Non-Permanent One - Coursework Example

In the last 20 years, many employers have turned away from the traditional model of the employment contract characterized by full-time, continuing (open-ended) employment. Abstract This paper examines the impact of the changed trend of employment from permanent one to non-permanent one as contract or temporary employment. This trend is highly marked in developed countries where employers have to be competitive in the wake of globalization. Globalization also brings with it innumerable employment opportunities so that it is not really an issue for the employees whether the jobs are permanent. as long as they get jobs at better bargains and with assured income security policies of the Governments. Introduction The employment trends have changed over the last 20 years in developed countries from permanent employment to other forms of employment such as contract employment, temporary employment due to variety of reasons from economic to social in the wake of information technology explosion and the resultant globalization. This paper seeks to enquire into the changed trends in detail and to find out whether or not employees have benefited as a result. Fading culture of permanent employment After the advent of industrial revolution and unionization and Governments’ commitment to job security, employers were compelled to assure permanent employment to workers through legislation during the 19th and 20th centuries marked also by the ill effects of Great depression and two World Wars. It was only by the end of 20th century, trend has changed through the notions of globalization towards contract and temporary employment. The reasons are not far to seek. Both employers as well as workers have been responsible for this change because employers are driven by economic compulsions to depart from permanent status to contract or temporary status while workers are motivated by wide spectrum of opportunities presented by globalization thus resulting in high attrition rate that workers even came to be called as job hoppers. While this may be true of information technology industry, expansion of job market through globalization and technology explosion in developed countries have contributed to this trend. Employers divide employees as core and non-core categories and accord core categories permanent employment status with a view to retain talent and non-core categories temporary status treating them as disposable workers. But those under core categories by virtue of their talents maintain contract employment status without controls and restrictions that come with permanent status. But the contract status remains permanent without controls and gives value addition and competitive advantages to the employers. And the so-called disposable workers remain permanent practically without being termed as such. The state of affairs regarding permanent or non-permanent are not always the same in all situations and hence temporary and permanent status are characterized by both favorable and adverse outcomes. Hence, the aim of this paper is not the permanency or otherwise but whether such a trend is for the benefit of working class. It is imperative therefore to examine various aspects of employment in broader perspective before coming to the conclusion expected of this paper. Decline of union membership The arbitration system encouraged formation of workers’ unions and employers’ association resulting in unionization of almost 50% of the Australian labor forces by 1921. While it dropped to 40% during depression, it increased to 65% by 1953. While Britain had the unions formed on craft basis, Australia’s unions were regions-based having all trades under one roof. Although workplace committees saw rapid development both in blue and white collar segments, trade unions were weak at the work place level because of arbitration system introduced rather than through collective bargaining. The Australian Workplace Industrial relations Survey (AWIRS) of 1990 indicated that in 80 percent of organizations with 20 or more workers, there was at least one union member. There was no union representative in 30 percent of the workplaces. With this, it was concluded by the survey that only 26 percent of the organizations had full-fledged unions. Next AWIRS survey in 1995 revealed there was sharp fall in union membership at workplaces. Thus during the last two decades, union membership have declined from 49 percent in 1990 to 23 percent in 2002. The reasons adduced to this decline are changes in economy structure that led to reduction in manufacturing activities and shift to services sectors where unions are generally weaker, and the resultant decline in full time employment and advent of non-standard employment in services sectors, though not all other industrialized countries have had the same changes. Other factors cited are general hatred towards unions by the employers and artificially increased membership due to compulsory unionism under centralized arbitration system in Australia. However, the Australian Council of Salaried and Professional Associations (ACSPA) and the Council of Australian Government Employee Organizations (CAGEO) and Australian Council of Trade Unions (ACTU) have been working to reverse this decline. The decentralization of unions that started in 1990 however does not guarantee protection to the most vulnerable sections of the work force. (Bamber G, Lansbury D, Walies, 2004 p119-145) Work flexibility It has been the end of an era of life-long careers that contribute to employment insecurity and polarization of opportunities mainly as a result of technological improvements characterized by fewer workers who are also highly qualified. This has resulted in employment flexibility pushing the workers whether skilled or unskilled under subcontracting and intermediaries who supply labor. Employers expect employees to think of themselves as self- employed as vendors coming to the company to sell their skill as made out by AT & T’s Vice President who is quoted to have said that jobs have now become projects and fields of works resulting in a situation of joblessness but not a situation where there is no work. As said earlier, for reasons of economy and competitive edge, and loss sustained in 1980s, IBM reduced its direct employees from 440,000 to 225,000 worldwide but still maintained a workforce of 500,000 in terms of number of jobs. This trend is not only in private sector but also in public sector as witnessed in U.K.’s educational institutions that have started employing part-time lecturers working as self employed supplied by Education Lecturing Services with the same institution where they had been directly employed. This raises an important issue of the importance of human resource management. This is reflected as inner core and outer core employees. The inner core of them, expected to have a high degree of task flexibility are limited in number while the outer core also called peripheral employees, are kept flexible numerically. The latter category need not be the employees of the organization but self-employed, sub-contract employees or from agency of temporary staff. (Purcell and Purcell, 1998). Outsourced return as Insourced Allan et al (2001) say that outsourcing of work also results in insourcing in some other form. Employers adopt flexible labor polices in that they employ directly flexible workers so that labor usage could be directly attributed to their product demands. This is met by employing casual, fixed term and temporary workers, which enable employers to exercise numerical flexibility. By employing workers through consultants, contractors through outsourcing whether at the same work place or outside, they achieve external numerical flexibility types of job functions as pointed out by Atkinsson (1987) and Patrick and Horwitz (1999) The authors Allan et al caution that this trend of causal and outsourced work pattern may be only of short term. Their study on a New Zealand sample in 1991 that that country’s employers would increase permanent full-employment has proved correct later. Similar is the case in respect of South Africa and Australia for the next five years of their study. Hence, non-standard forms of employment have not become a practice in the countries of Australia and New Zealand so far. Conclusion The brief examination of state of affairs in the developed countries does show that employers would tend to reinforce their policies of non-permanent employment in some form or other although it cannot be the case in Australia and New Zealand that encourage migration unlike other developed countries. What ever be the form, it is mainly because of the need to continue in business in the wake of increased competition due to globalization that has forced the countries to shed trade protectionist policies. The protectionist policies cannot be obviously restricted to trade alone but also in the matters of employment so that employees also make themselves efficient in a competitive job market. In the ultimate analysis, it does not really matter whether the job will be permanent or temporary as along as they are assured of job opportunities with increased remuneration from time to time. The culture of life-long career may be fading but the Governments cannot afford to remain without assuring their citizens of income security. Hence, it is only the culture that is changing and employers and employees that are mutually dependant will always have a meeting point where both their needs will be fulfilled. References Allan Cameron, Brosnan Peter, Horwitz Frank, and Walsh Pat, 2001, Casualisation and outsourcing: A comparative study New Zealand Journal of Industrial Relations; Oct 2001; 26, 3; ABI/INFORM Global pg. 253 Atkinson J. (1987) Flexibility or Fragmentation? Labour and Society, 12(1):87-105 in Allan Cameron, Brosnan Peter, Horwitz Frank, and Walsh Pat, 2001, Casualisation and outsourcing: A comparative study New Zealand Journal of Industrial Relations; Oct 2001; 26, 3; ABI/INFORM Global pg. 253 Bamber J Greg, Lansbury D. Russell, and Wailes Nick, 2004 International and Comparative Employment Relations: Globalization and the Developed Market Economies, Sage P .119-145 Patrick-Filitz, A and Horwitz, F. (1999), Owner-driver schemes and Productivity, South African Journal of Business Management, 30 (1): 6-13 in Allan Cameron, Brosnan Peter, Horwitz Frank, and Walsh Pat, 2001, Casualisation and outsourcing: A comparative study New Zealand Journal of Industrial Relations; Oct 2001; 26, 3; ABI/INFORM Global pg. 253 Purcell Kate and Purcell John, 1998, In-sourcing, Outsourcing, and the Growth of Contingent Labour as Evidence of Flexible Employment Strategies European Journal Of Work And Organizational Psychology, 1998, 7 (1), 39–59, Psychology Press Ltd Read More