Important Methods of Systematising Unusual Employment Relations - Essay Example

European governments have recently passed legislation making it easier for firms to introduce short-term employment contracts. Evaluate the implications for firms and employees, using evidence from at least two countries. Introduction In the recent times, unusual employment relations like part-time employment, temporary work, short-term work as well as independent contract work have more and more become important methods of systematising work. (Kalleberg 347) Several European employment firms have preferred to deviate from the conventional model in which several employers were associated with their employees on a permanent, almost enduring basis. This old convention, symbolised by an interchange of job security for work done and faithfulness, is being replaced by a new convention wherein employers guarantee to teach workers and enable them to be employed in several firms, but give no assurance of permanent job. The use of short-term contract workers is not restricted to clerical work, but also clinches high-skill profession like engineering, research, computer programming, drafting etc. (Kalleberg; Knoke; Marsden 4) The method of employing provisional short-term contract employees is not a new or an innovative one. IT firms started this method in the mid part of the 1990s and they have been effectively employing contractors since the last decade. But in the last few years, there has been an increasing dependence on contract workers in the fields like medical writing, communications, sales and marketing of the products of pharmaceutical companies. Several huge pharmaceutical as well as biotech firms have understood that it is more lucrative to employ temporary workers on a required basis when compared with keeping costly permanent employees having significantly lesser work. (Contract Employment: A New Paradigm for Pharma and Biotech) Reducing cost has an effect on the size as well as structure of jobs. Companies are able to stimulate a switch of permanent jobs with that of short-term contracts. (Nunziata, L; Stafolani 73) Advantages of Short-term employment contracts for employees In recent times, there have been labour changes across Europe. It has been argued that the small employment boom that has been witnessed of late in Europe has mainly been due to short-term employment. (Alesina; Giavazzi 9) In France, the law forming the First Employment Contract known as the Contrat Premiere Embauche or CPE was being passed by parliament with regard to an expansive bill relating to equal opportunities. According to the CPE, short-term work contract was to be provided with a 2-year testing time to those below the age of 26 years. For below-26s, the CPE has to repose to a standard full time contract after the 2-year trial time period. (Q&A: French labour law row) In France, the government contends that the system of short-term contract will enhance prospects for young employees, some of whom could only get short-term work at the maximum. Around 20% of France’s population from 18 years to 25 years of age are jobless – an estimate which doubles that of the national average of about 9.6%. Out of the nation’s deprived communities, joblessness among the youth stays at 40%. As per the legislation in France, after the two-year testing period, the short-term contract would convert to a permanent contract. (French protest at youth job plan) In Germany, where joblessness is at 11%, a coalition government led by conservative leadership of Angela Merkel assured to minimise joblessness by launching comparable measures to those hotly discussed in France. In Germany the new method of short-term job contract was being aimed at under-privileged youths, which means people between 18-25 years of age who are school drop-outs without any training and who are without a job. Denmark’s efforts to relax employing and sacking have enabled the nation to reduce its joblessness level to just half from the 10% mark in the early part of the 1990s to that of just 5%. Spain, also, has brought in short-term job contracts, which have enabled to reduce its joblessness level by over half from 20% which was about 10 years back. Italy has made modifications to its labour regulations in the year 2004, by bringing in an expansion of short-term job contracts that were being introduced in the year 1997 and had helped the country in reducing the general joblessness level to about 7.1% from that of 12% at the time of the start of the contracts. (Labour Market Flexibility Increases Employment and Prosperity) With respect to short-term contract advantages for the workers, some group of workers like the clerical, managerial and those employments which need fewer talents or experience had more reward in making use of the short-term job contracts. Further experience in various firms has the power to widen talents and skills. A Swedish case study analysis in the EWCO report ‘Temporary agency workers in the European union’ for instance shows that on a short-term level, the degree of learning and skill development is very high for the employees, and switching jobs can widen their work related experience. (Impact of training on people’s employability) Disadvantages of Short-term employment contracts for employees The short-term employment contracts are mainly considered as a ‘plan’ by firms trying to sack employees as per their need. (Alesina; Giavazzi 9) The short-term job contract is having a deep pessimistic effect on particular employee’s lives, on employment firms, and on European nations highlighting the short-term employment contracts. (Kalleberg; Knoke; Marsden 14) The greater part of employees in temporary job is not enthusiastically in such a job category. The EWCO Report Temporary agency work in the European Union 2004 states that the major cause for workers to remain in temporary short-term employment is to find long-term jobs in future. But the chance of shifting to long-term job rises from 31% in a one-year changeover to 55% after a period of six years. But about 37% are still in insecure job, or changing in and out of job after this time period. Their probability of moving into steady job decreases over a period of time. (Impact of training on people’s employability) Due to low security of job and low salary given by contract may be turning good talented individuals away from highly skilled profession. (Langenberg 3850) There is no effective union to fight for the privileges of short-term workers. If there were successful unions to fight for the well being of short-term employees, it would have added to effective work atmosphere and rectify the monopsony authority of employers in the less perfect labour markets. Also by expanding workers negotiating rights with regard to firms, unions could have brought about distributive social policies by gaining workers an expanded portion of firms excess. (Rockson 25) In France, the new legislation of short-term job contract has the trepidation that it would allow firms to give employment contracts to people below the age of 26, which would let employers to lapse a contract within the 2-year short period. Reviewers forewarn that larger employers could distort the new law, which is presently only applicable to small firms, and make it even more difficult for the youth to get a long-term employment. (French protest at youth job plan) They stated that the new law would weaken job security and were deliberately deceitful. Short-term contracts bring about uncertainty and randomness for most physical and low skilled employees, mainly where working models vary according to the needs of the customer or employers. (Q&A: French labour law row) Due to the change from one job to another, the short-term employment contract candidates, particularly for underpaid work, are hardly able to analyse the company and its job procedures. The minority who have the time and resources at their hand to spend on such research expenses have restricted accessibility to knowledge applicable to their future employment as well as salary possibilities. Their wrong information revolving the legal default legislations influencing the employment rapport proposes that employment aspirants can neither exactly appraise the points on which negotiation is done nor the contract areas in which compromise is required for them. The contract disparities due to information breach thus work excessively to the disadvantage of the employee, which intends that the employer would have more say. (Rockson 26) In addition, the development of short-term employees has very much lessened chances for career improvement within firms. As workers could no longer insist on spending most of their lives working for a single firm, they ought to be ready to work out with the commotion arising due to changing from one place to that of another. They must often at their own expense prepare for continuous retraining during their work life. (Kalleberg; Knoke; Marsden 18) Research projects in small portions of 2-3 years deteriorate researchers through the boundless duties of writing reports for old projects and proposals for the new projects. In the year 2000, the European Commission got 8.3 times more applications than it could sponsor, which illustrates why proposal making takes so much of the researchers time and energy. (Langenberg 3850) The short-term job contracts in Germany have been only for five year period with no opportunities for renewal. This is too small a duration to organise an elaborate research programme, as a researcher who has to start searching for an employment after a period of four years. Thus in one’s profession, one can made to go out of the job at any point of time. Short-term job contracts do add stress to do the daily duties. Due to the insecurity of their future, short-term job contracts prevent people from setting up a social life outside of their job, and are likely to make them to work at nights and even during weekends in order to attain job that could acquire them a more safe position. For family members, these interim assignments put high stresses, as they have to move out finding new schools and employment for their children and partners respectively. (Kreeger 760) Additionally, for women who try to join together a family, the compulsion of short-term job contracts pose enhanced problems. For women who like to begin a family, short-term job contracts with huge demands to generate outcomes and providing no job assurance after maternity leave is not an option unless otherwise she is ready to give second priority to her career. (Langenberg 3849) Short-term contract employees were more likely than permanent employees to have physical diseases and to face high mortality issues. Bofetta, Sali and their colleagues studied the death rate of blue-collar workers employed for less than one year and more than one year in the man-made vitreous fibre -- MMVF as well as the reinforced plastic companies, the last category having close contact with styrene. They made a study with workers employed in eight European countries consisting of 19,117 employees with one or more time period of employment, namely the long-term employees and 21,784 employees with less than one year of employment namely, the short-term employees. The study showed an enhanced death rate among workers having less than one month of job in both groups in the order of 40% more as well as in many of the countries. (Boeffeeta; Sali; Kolstad, et. al. 1123) Advantages of Short-term employment contracts for employers Short-term job contracts could have advantages for the employers like financial as well as operational advantages. Certain employers say they are hesitant to take on new workers due to the problem of sacking them if their performance is incompatible or are no longer required. But this problem is solved through short-term contract jobs. The changes formed by short-term contract jobs do have advantages. For an organisation, the benefit is that it is renovating itself almost continuously. They stop an organisation from being inoperative: change of the employees encourages creativeness. The normal age of the employees will be fairly young, which enables to make the place of work active, lively and a fun centre. By short-term job contracts, a business would be able to maintain suppleness in adjusting to programmes, promoting new thoughts, and taking expertise back by means of change. (Kreeger 761) In contrast to paid workers, short-term workers cannot claim any company advantages such as health insurance or that of the 401K plans. By not giving benefits to short-term workers, large companies can reserve their hundreds of million dollars. An important financial advantage is that short-term workers are compensated only when they turn up for work. Naturally, employees are cautiously supervised for the hours they work and ought to present timecards on a weekly basis before they are given salary. With regard to an operational point of view, short-term jobs allow employers to decide if a specific worker is suitable for a firm or not. If a worker is considered to be a good staff worth having, a firm has the choice of either giving the worker a second time or employing them as a permanent staff. In contrast, if a worker is not fit enough, the firm can allow them to leave without any vacillation, as short-term workers do not have job security. (Contract Employment: A New Paradigm for Pharma and Biotech) Disadvantages of Short-term employment contracts for employees Though the short-term job contracts permit suppleness in employing, they may bounce back if they send the best workers away. The job composition of short-term job contracts is becoming unappealing to Europeans. This could transform into complexity in taking and keeping the correct people. (Kreeger 761) An important growing disparity between the long-term and short-term job contract workers is related to skills development, associated to the nature of the employment and features like resolving issues, doing difficult tasks and studying new things relating to work. Workers with stable contracts do more proficient jobs than workers having short-term job contracts. Another feature of proficiency growth by means of the work content is job suppleness, i.e. being absorbed in task revolution or working in groups. There are variations in respect to the quantity of task rotation: temporary workers are not as included as in the latter. Another feature is the agreement between personal talent and level of skill requirements. There are considerable variations between long-term and short-term job contract workers: workers working in temporary job contracts frequently work in jobs where the requirements are very less and simple. Short-term job contract workers take up jobs with less talent included in the job than long-term workers. (Impact of training on people’s employability) Short-term employees are frequently connected with higher management expenses as temporary workers have little basis for faithfulness to a firm and may not be adequately compliant to do high quality job. Companies may find out that short-term employees in fact are expensive as they are not as industrious as permanent workers. When the source of fundamental production or service employees available to an employer constricts i.e., when the professional jobless rate reduces, firms are compelled to reduce ever lower into the labour row to find employees. As the labour pool falls, the rest of the employees are also less prone to have the required talents, knowledge, and work dedication that make them precious to companies. As a result, firms are forced to spend more effort in seeking, selecting, mixing, and teaching new workers, in essential skills like numeracy, literacy as well as punctuality. (Kalleberg; Knoke; Marsden 24) As per the human capital theory, companies will not be willing to invest in human capital which is non firm-specific, as the short-term employees are free to quit and shift to another company, they cannot guarantee a profit on their investment. For long-term workers, proficiency development strategies, fixed in wider human resource development plans - are the base for aiming training methods and intercession. The supposition is that short-term employees are not, or are less, concerned in such measures, but these are certainly more essential for employability in comparison to short-term training methods which help them to complete the responsibilities of the present employment. Short-term employees often come across new work conditions and atmosphere. They do not get purposeful training methods and appealing jobs in the user firms. Training procedures are likely to be concentrated on the gaining of skills necessary for the present employment instead of building up new talents with respect to other fields. Short-term employees also have less power with regard to control over the sequence of jobs, speed of work as well as work techniques, and have low job requirement. (Impact of training on people’s employability) An EIRO comparison study in the EU15 on short-term job accounts that there is less training chances for workers on short-term job contracts. The EWCO report Temporary agency workers in the European Union has given proof on the basis of national sources, that short-term job contract employees have less approach to additional training methods and to partaking in long-term proficiency growth, when compared to employees having long-term job contracts. The condition of the short-term employees has been conversed in the final report of the German Expert Commission on Financing Lifelong Learning. Lesser involvement in additional training will have a negative effect on their employability prospects over the long run. (Impact of training on people’s employability) Based on the period of employment of the short-term job employees in the firm, it is debateable for these firms whether the project in further training will give profit. Usually, an attempt in further training only takes place if there is a flow of profits to the investor. Also, the chances for further training are limited due to repeatedly changing the places of business and time requirements. At times when the employee is not employed, the job link normally comes to an end. Storrie debates this in the same way with reference to the human capital theory in the 2002 report of Temporary agency workers in the European Union. The reality that the short-term contract employees will work for the company only for a restricted time period intends that there is less concern in giving much training. (Impact of training on people’s employability) Conclusion In conclusion it could be stated that short-term contract employment in Europe has a relatively bad implication. Though the recently passed legislation in European governments of short-term employment contracts to workers has its benefits for the firms and to a lesser extent for the employees, however the legislation proves to be ineffective and is a big failure when considered on a wider platform. (3000 words) References Alesina, Alberto; Giavazzi, Francesco. US exporting flexible labour ideas to Europe. Taipei Times, Nov 28, 2003, p. 9 Boeffeeta, P; Sali, D; Kolstad, H; et. al. Mortality of short-term workers in two international cohorts. Journal of Occupational Environmental Medicine, December, 1998; vol. 40, no. 12, pp: 1120-1126 Diamond, Art. Labour Market Flexibility Increases Employment and Prosperity. 14 April, 2006. French protest at youth job plan. 7 February, 2006. Impact of training on people’s employability. European Foundation for the Improvement of Living and Working Conditions. 20 June, 2005. Kalleberg, Arne L; Knoke, David; Marsden, Peter V. 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