Flexible Labor in Organizations - Essay Example

 Flexible Labor in Organizations Introduction “Flexibility” is commonly used as a general term to describe a desirable quality in a labor market, without specifying exactly which kind of flexibility is referred to, or which groups in the labor market are supposed to be flexible.” (Bredgaard et al, p.8) Flexibility in work is a distant dream; many of the workers are aspiring for. The modern work culture and fast life prevent the parents from even spending little time with their children or other family members. As per the current work culture even 24 hours seems to be not enough to fulfill the commitments of the organizations and hence most of the organizations forcing the employees to do overtime in order to finish off their pending work. The increase in work load forces the employees to search for alternate options like flexible jobs. ‘48% of UK organisations offer flexitime to their employees compared to 90% in Germany, 94% in Sweden and 92% in Finland, and just 20% offer tele-working compared to 44% in Germany and Sweden, 40% in Norway and 39% in Denmark.” (The UK’s flexible labour market may no longer be a source of competitive advantage) Flexible work is the option mostly the people are looking for because of the tight working schedules of regular work. Flexible labor has its own merits and demerits both for the organizations and the employees. Most people believe that flexible labor is going to be the future trend in organizations because of the immense benefits attached with it. Flexible labor in organizations “In the early 1970s, one in five American workers was employed by a Fortune 500 company; by the early 1990s, the ratio had dropped to one in ten” (Laubacher & Malone) Big organizations are no longer attractive to many employees because of the tight work schedule and lack of flexibility in work. Nowadays people are more conscious about the working environment rather than the salary alone. People are already living in a stressful world. Problems from family and society along with that from the work place have made the life of an average person miserable. They wanted to reduce the stress level at any cost and flexible work is one option for reducing the job stress considerably. “Many observers believe that highly flexible organizational forms--often called networked organizations or virtual corporations--will become increasingly common in the future. Temporary networks of very small companies and independent contractors could undertake much of the work that is performed by large organizations today” (Laubacher & Malone) Outsourcing of jobs is one of the best examples of flexible work. As per the old traditions, most of the works related to an organization has been executed in the organization itself. Only the marketing or purchasing functions were conducted outside the organization as per the traditional model of organization. But nowadays organizations are trying to outsource maximum jobs in order to exploit the cheap labour markets in overseas countries. In India like countries, many cities have small firms which were established recently to utilize the outsourcing job opportunities they are getting from United States like developed countries. “In the face of ever increasing pressure from international competition, outsourcing - of jobs, products, services or suppliers - presents a way for enterprises to reduce costs.” (Bredgaard et al, p.27) Globalization has created the doors widely open for the business community. It is possible for an Indian to work for an American company staying in India itself because of the technological development. Globalization has revolutionized the whole business concepts. Outsourcing of works and offshoring of business are common in business world. ‘Outsourcing contributes towards the dynamic development of the labor market, in which jobs disappear and new ones are created all the time. Outsourcing can also be a way for enterprises to survive and improve their competitiveness in times of fierce international competition.’ (Bredgaard et al, p.28) Competition is immense everywhere and hence new strategies are developed by organizations to survive in the market. Skilled work force is comparatively less in many countries and hence organizations in such countries forced to man power of other countries. Outsourcing jobs provides flexibility in the job market. The employer no longer needs to employ more workers in order to finish off their commitments. On the other hand the employee no longer needs to work in a tight competitive working environment. Outsourcing has provided freedom in the working environment, both for the employer and the employee. I have a friend who is working as a freelance writer. Previously he was employed as a journalist in a news paper firm. He was forced to work even on holidays and even in night based on the requirements of the firm he was working for. He has developed high blood pressure (BP) because of the tension associated with his profession. The tight work schedule and the risk involved in his profession forced him to resign from the journalist’s profession. He has started freelance writing since he had better writing skills. He has prepared many articles with high degree of peace of mind under stress free environment and got more appreciations from the readers and the firms for which he has prepared the articles. He told me that he is enjoying his profession immensely now. He is getting enough leisure times and has flexible working hours and hence his blood pressure also come down to the normal value now. “Two other areas where free-lance workers are prevalent are film production and construction” (Laubacher & Malone) “Knowledge and skill development is rewarded and flexibility and innovation are encouraged.” (What shaped organisations?) Most of the organizations are searching for skilled, knowledgeable and flexible workers. A better skilled person doesn’t need to be panic even in the current global economic crisis scenario. His demand will never be in jeopardy since most of the organizations are experiencing lack of skilled professionals. For example, America is experiencing skilled workers in almost every field and hence most of the workers working in America are from India, Pakistan, Philippines and China like countries. Even then their requirements are not adequately met and hence most of the organizations are ready to outsource their jobs in overseas markets like India and China. The consequences of working-time flexibility as experienced by employees have been investigated in a comprehensive analysis, which shows that 7% of all employees felt stressed at work almost all the time, and 48% sometimes. Furthermore, it shows that women are more likely to experience stress than men. On the other hand, another result of the analysis is that there is widespread satisfaction with the working hours on the Danish labor market. Two thirds of employees thus reply that they work the number of hours they wish to work. For the remaining one third, more want shorter than longer working hours, and the net hour-change wanted can be calculated to just below minus 3 hours a week on average. (Bredgaard et al, P.15) Generally speaking, the combination of a flexible labor market and an extensive social security system must be said to be to the advantage of highly-skilled, mobile and flexible workers who are able to switch jobs and job functions easily (Bredgaard et al, p.26) Different types of flexible works Numerical flexibility, working time flexibility, functional flexibility and wage flexibility are examples of different types of flexible works. “Numerical flexibility refers to the scope for adjusting the number of employees at the individual workplace through hiring and firing.” (Bredgaard et al, P.8) Organizations have the advantage of numerical flexibility since they are able to fire non productive employees and can hire new productive employees from the job market. For example, suppose a firm has employed a software professional and after a few months, if they found him not skilled as expected in software development, they can fire him out and can go for a better skilled person. On the other they can also employs skilled professionals on temporary basis for the completion of a project and thereafter they can settle him out. “Working time flexibility (temporary flexibility) is achieved through adjusting the number of working hours (e.g. working overtime or part-time) and their placing (working shifts or weekends)” (Bredgaard et al, P.8)In this type of flexible work the employee has the option of working overtime and then compensate for it by taking break. For example, if an employee wants to spend 3 day holiday tour with his family, he can take the advantage of working time flexibility. He can work an additional shift for three consecutive days and then compensate for this overtime by taking three days break to enjoy the holiday with his family. Most of the part time workers have the advantage of work time flexibility. They are selecting their temporary assignments based on their convenience and hence they don’t want to sacrifice any of their personal needs for the sake of his profession. Functional flexibility is about the scope for transferring employees between job functions (Horizontally or vertically) and is closely related to organizational flexibility, which is concerned with changes in the organization of operations and management (Bredgaard et al, P.8) In some organizations, the management will try to train all of their employees in all the different departments of the company in order to utilize them when an emergency occurs. For example, the accounting staffs will give training for front office matters, sales and other core functions of the organization if emergency situations occur. Wage flexibility refers to the rate at which nominal and real wages respond to changes in supply and demand for labor (Bredgaard et al, P.8) when the demand increase wages also increases while when the demand decreases the wages also decreases. For example, nursing profession was no a well paid profession around two decades before. But now the number of patients increased drastically all over the world and the supply of the nurses are not enough to meet the demand and hence the wages of nurses are sky high now in many countries. Advantages and disadvantages of flexible work Flexible workers are profitable to organizations because of two reasons; Flexible workers are hired and paid only if there is work, typically during temporary production peaks; Flexible workers earn lower hourly wages (Kleinknecht et al. 1997). Organizations can avoid salary expenses when there is no work. Regular workers need to pay every month irrespective of whether there is work available or not. On the other hand flexible workers or part timers can be utilized only if enough works are available. Moreover flexible workers have low hourly wages compared to the regular employees. Also the company does not want to pay additional increments such as gratuity, DA, TA, bonus etc to the flexible workers and hence the company will be immensely benefited from employing flexible workers. Workers in traditional jobs are protected against the ups and downs of the economic cycle in two ways; the firm assumes some of the risk of uneven demand by paying a fixed wage to its employees and Unemployment insurance protection, (Laubacher & Malone) Flexible work has certain disadvantages also. A permanently high rate of people joining and leaving a firm is likely to diminishing social cohesion and trust which will increase the negative effects of moral hazard. (Kleinknecht, et al p. 2) The image of an organization in which workers coming and going may not be good compared to another firm which employs permanent employees. The society will look suspiciously at such organizations. The commitment of part time workers towards the firm compared to the regular workers will be less. The relationships between the employer and the part time employee also may not be as good as the one between the employer and the regular employee. Part time workers will consider the organizations as their temporary shelter and hence they will never express deep responsibility towards the organization. Since they are able to work anywhere anytime organizational control over the part time workers will be much less compared that up on regular workers. “Flexibility will diminish ‘social capital’, forcing firms to invest more money in various types of internal control. One can also argue that employers will become more reluctant to invest in their employees’ human capital.” (Kleinknecht, et al p. 2) When part time employees are working in a firm, the firm may not spend much to improve the skills of the employees by providing training since they were not permanent. Experienced, well trained regular workers always have better understanding about the requirements of the firm better than the part time workers. The organizations cannot enforce strict rules upon the pat time workers to improve their productivity or skills levels. Dissatisfied part time workers can give up their assignment anytime they like and hence the organizations which employ them on part time basis may experience problems. Conclusions Flexible work seems to be the future work most of the employees and the employers are looking for. Numerical, wage, working time and functional flexibilities are the most commonly observed trends in flexible labour market. Flexible work has immense benefit to both for the employers and the employees. The flexible work helps the employees to reduce their work tensions and they will get ample time for leisure activities. Moreover the employers will be benefitted from the flexible part time workers by providing them low wages compared to the regular workers. The employers can utilize the flexible workers only when they have excess jobs. Employers don’t want to pay for the flexible workers any extra perks such as bonuses, allowances, gratuity or other increments. On the other hand flexible work has its disadvantages also. The employees may not get any job protection, other allowances or insurance coverage for health. The organization where part time workers are more frequently used may lose its reputation among the public. Works Cited 1. Laubacher Robert J. and Malone Thomas W. Flexible Work Arrangements and 21st Century Worker's Guilds, Retrieved on April 29, 2009 from http://ccs.mit.edu/21C/21CWP004.html 2. Bredgaard Thomas, Larsen Flemming, & Madsen Per Kongshøj , The Flexible Danish Labor Market – a Review, Retrieved on April 29, 2009 from http://www.epa.aau.dk/fileadmin/user_upload/conniek/Dansk/Research_papers/1-the_flexibble_Danish.pdf 3. The UK’s flexible labour market may no longer be a source of competitive advantage, Retrieved on April 29, 2009 from http://www.onrec.com/newsstories/12468.asp 4. What shaped organisations? Retrieved on April 29, 2009 from http://www.go-jamaica.com/jobsmart/view_article_details.php?id=151 5. Kleinknecht Alfred, Oostendorp Remco M. & Pradhan Menno P., Patterns of Flexible Labor and Firm Performance in the Netherlands- Exploring the OSA Labor Supply and Demand Panels Retrieved on April 29, 2009 from http://www.memo-europe.uni-bremen.de/downloads/Kleinknecht_05_2000.PDF Read More