World economies have experienced rapid changes over the last three decades. Increased competition among organizations coupled with enlightened consumers has made businesses and even governments rethink their methods of service delivery. Globalization has motivated people benchmark life elements with what is considered best by the ‘global village’ irrespective of their location. Globalization caused sectors such as governance, employment, technology, fashion, hospitality among others deliberately tailor their policies to match the changing trends. The current essay seeks to discuss some of the key changes in the employment context and their effect on the way organizations utilizes labor. The essay will also evaluate the implications of the changes for the workers. In the attempt to reduce the cost base of organizations' human resource, a raft of strategies has been incorporated in the employment policies in the last three decades. The strategies have been adopted with the aim to reduce and rationalize human resources and include creation of flexible workforce, downsizing, outsourcing of support activities, project-based employment and team working, a growth of female workers, etc. The strategies are geared towards aligning the interests of employers and employees, thus creating competitive and profitable organizations. To actualize the approaches, organizations have undergone massive structural changes aimed at making them lean, agile, and less hierarchical.
The Key Changes in Employment Context
Creation of Flexible Workforce
The phenomenon entails employment arrangement that enables organizations to develop flexible working patterns for their employees. Over the last three decades, the trends of reduced full-time employment and growth of part-time jobs coupled with shift work has taken root in the business environment. Organizations are also using agencies, contractors, and consultants for a wide range of tasks.
Outsourcing is an allocation of specific business processes to a specialist or service provider outside of organization (Flatworld Solutions n.d.). In the last three decades, there has been a growth of firms that offers specialized services. The process has changed the employment patterns as many organizations are resorting to outsourced services to avoid bloating their employee base.
The idea is an employment arrangement, where employees are hired to implement a particular project over a specified period. Project-based employment may last for days, weeks, months or a few years. Employment ends with the completion of the project. Midyear projects that emerge in organizations and are considered peripheral are usually implemented on this basis.
Temporary employment entails an agreement that a job will be terminated either on the specific date after completion of the task or upon the return of an employee who has been temporarily replaced. It has become a norm in many organizations to have temporary employees substituting the full-time workers.
Corporate downsizing is the process of reorganizing a company structure in a manner that results in layoffs of a portion of company's workforce. Downsizing stems from organizations' attempt to keep them profitable in times of decreased demand for their product or services. Mergers and elimination of outmoded divisions in organizations in the last three decades has also led to downsizing. The elimination of unproductive or outdated departments has led to a significant change in employment patterns of organizations.
Impacts of the HR Changes on Labor Utilization
The creation of flexible workforce in organizations has seen most of them increase the utilization of part-time workers, temporary and external contractors to substitute their full-time teams on a need basis. The approach has enabled organizations to respond to the demand in HR on the regular basis. Both employers and employees have reaped from the changes of employment patterns. The ability of workers to work from home, select comfortable working hours and days has made many people prefer part-time jobs. The change of attitude towards the work-life balance and growth in communication technology has greatly boosted the alternation of employment patterns. Firms have benefitted from part-time labor as it is cheaper due to little or no additional benefits and allowances usually accorded to full-time workers. However, organizations have suffered the unwillingness of part-time workers to allocate additional time in situations of unforeseen demand patterns. The challenge stems from less motivation and loyalty to the organization due to lack of deliberate career development programs for the part-time workers. Unexpected leave of job among part-time workers can also de-motivate the organizations to venture into new employment patterns.
Furthermore, the last three decades has seen organizations put in place downsizing measures to cut their employee base. In downsizing incidences, most businesses have been making efforts to fund job retraining programs for their employees and absorb them in productive departments. Others companies actively engaged in seeking other employers interested in hiring some of the laid-off workforces. Also, redundancy pay has been allocated to laid-off workers to aid their transition. A hefty package becomes a conduit for self-employment among laid-off workers. Self-employed individuals find themselves back to organizations as portfolio workers to offer specialized services when needed. Though older and unskilled workers may permanently leave the job market, the growing need for services from experts has been boosted by the adoption of outsourcing patterns by firms. The change offers opportunities for skilled workers to get back to the job market as self-employed.
Organizations resorts to outsourcing in situations where they do not intend to hire full-time professionals to deliver on temporary tasks. Also, availability of cheaper labor makes organizations outsource in attempts to remain profitable in a competitive market. Over the last three decades, outsourcing has accelerated as it is deemed as a cost effective response to the changing working patterns. It offers an opportunity for an organization to concentrate on its core activities rather than the supporting ones. The reduction of operational and recruitment costs for organizations plays a significant role. It eliminates the need to hire individuals permanently enabling organizations to minimize employee base. However, outsourcing has had its cons and is a risky venture. Exposure to organizations' confidential information to a third party is detrimental to its existence and competitiveness strategies. Also, with an increased demand for outsourced services, a vendor may be servicing multiple organizations at a time, which limits complete devotion to tasks of a particular company.
Further, adoption of project-based employment patterns in the last three decades has taken root in many organizations. The phenomenon stems from company’s need to implement specialized projects on the temporary basis in the most cost-effective and time-efficient manner. Skills, abilities, and experience of workers are the assets for the organization in achieving set goals. In Sri Lanka for example, organizations are fond of project-based employment framework due to lower supervision cost, higher productivity, labor shortage, market uncertainty among other cost reducing benefits (Nawaratne 2013). Employees have also approved the new employment pattern due to flexibility. Project-based employment is mostly practiced in service-based industries, i.e. consultancy, construction, and software companies. For example, a financial consultant is working for Google Company. The worker provides services to different departments implementing varied financial projects. The cost of payment is calculated based on the time spent on each project. The consultant is not restricted to the one company and may be performing similar tasks in another organization at the same time (Oracle Application). The framework has provided opportunities for retired individuals with specialized skills to get reemployed on the irregular basis by different firms. Adoption of the approach in the Sri Lankan market saw an increase of project-based workers in 2006 with the trend expected to take a rise both in skilled and unskilled labor categories. Similar to the discussed changes above, organizations expects cost-benefit advantage and timely completion of plans by hiring project-based workers.
Temporary employment has also been incorporated in international organizations. Temporary employment entails an agreement that a job will be terminated either on the specific date, after completion of the task, or upon the return of an employee who has been replaced. By 2009, countries such as Portugal and Spain had over a quarter of their workforce in temporary employment (Triple A Learning 2009). The employment pattern has cushioned individuals who could have suffered due to lack of full-time employment to a great extent. Organizations have also used temporary employment to augment their full-time workforce in sectors such as tourism and hospitality, where market fluctuations pose opportunities and threats requiring swift, responsive actions. The emergence of non-governmental organizations that implement numerous short-term projects has intensified temporary recruitments. For example, an NGO may want to implement a three months water and sanitation project. Instead of recruiting full-time workers, the organization opts for a specialist to complete the project. In addition to temporary work, shift work has become popular over the last three decades. In addition to being a temporary or part-time worker, an individual can decide to work on the shift basis. Shifts approach, for example, during nights, evenings, morning or weekends has been largely adopted in manufacturing firms. A significant increase in numbers of young people and women engaging in shift work has been experienced. The job market is changed with more women and students searching for employment. They need to finance some portion of post-secondary education, thus scheduling work responsibilities to course work.
Implications for Workers
It is evident that economic liberalization has brought a shift in employment practices. The gradual change from traditional contractual arrangements to non-standard employment practices has been witnessed in the job market in the past three decades. The careful strategy in labor utilization is the order of the day. For example, companies in Australia incorporated part-time employment in the 1980s that saw an increase in employment from two million to over six million by 2013, where three in every ten Australians were part-time workers (Gupta 2013). In the United Kingdom, women have taken part-time employment to balance home and work responsibilities. Bardasi and Gornick (2000) attribute the uptake of paid work for women to the presence of dependent children and adults as well as the need for stable livelihood. The absence of permanent contractual agreements that binds employers to additional expenses for employees, for example allowances and health insurance, minimize expenses for organizations. Practices like portfolio employment have enabled firms to elude unnecessary purchase of equipment for temporary projects. By contracting specialized agencies to deliver on specific tasks, organizations reduce operational costs. The ability to respond quickly and effectively to variations in customers’ demand has been a significant step in ensuring profitability. Also, changes in employment patterns have provided opportunities for recruiting and maintaining experienced staffs that may be unwilling to work traditional hours. However, organizations in some instances have lamented about the lack of effective communication due to employment of different people over the short period. The issue also makes it difficult to make a consistent team that may be relied upon by the management.
On the other hand, changes in employment patterns have impacted workers both positively and negatively almost in equal measure. Workers, who are victims of downsizing, have received opportunities to get reemployed as specialists or through agencies to implement short-term projects. The change has been a conduit for self-employment. Secondly, the improvement of work-life balance among workers is a great benefit. The flexibility that employment changes have brought enables individuals to spend reasonable time with family. For example, an individual working for three days in a week can manage to schedule family activities around work commitments. It is crucial to note the reduction of commuting expenses that employees cover, as they can work from home creating opportunities for savings and investment. However, changes in employment patterns have raised myriads of problems ranging from lack of job security to lower social security. Non-standard employment arrangements have exposed workers to poor working conditions. Workers enjoy fewer facilities and are not covered by welfare programs provided for full-time employees. The change has also eliminated retirement benefits for workers because retention is minimal. The end of a project or task marks the termination of employment. Further, most organizations do not provide the binding framework and clear working conditions leaving work tenure at peril. With a high number of employees engaging in precarious and dispensable employment, chances of subscribing to labor unions are almost zero. The decline in union membership has led to inequality in earning between non-traditional workers and their counterparts in full-time jobs. Income for nonstandard workers is determined by individual negotiating power and the goodwill of the employer. The situation has caused disparity of wages among workers who offers similar services to the different organization.
Work is crucial to human existence, and paid job translates to a source of livelihood. Over the last three decades, the world has witnessed liberalized economies. With emergence and spread of multinational organizations competition for the market has rapidly increased. Firms are striving to remain profitable. The growth of information technology has enabled organizations to fast-track their structural changes. As discussed in the current paper, lean and agile organizations have replaced the traditional hierarchical firms that had closely related departments leading to unnecessary staffs. When organizations craving for profits, employment patterns have changed in attempts to minimize operational costs and maximize profits. Companies have closed down unnecessary departments through downsizing. Though workers have lost jobs through the strategy, most have been retrained and absorbed in other productive departments or got employed in organizations through the recommendation from the former employer. Specialized and experienced workers have returned to the job market either through temporary employment or project-based employment where their skills are needed. The growths of new sectors that are prone to market fluctuation, including tourism, hospitality, and information technology among others have made organizations adopt flexible procedures of employment. The factor enables them to hire on the need basis. Arrangements like shift and part-time work make it possible for organizations to augment full-time staffs with demand rise and dispense excess workers with a decline of demand. Employees have also benefited from the changes as most of them can easily schedule non-work activities around work responsibilities. Life-work balance has been ameliorated. Groups that could not secure full-time jobs can easily enroll on part-time or shift work. For example, the students can fund their post-secondary education with ease. Also, the ability to work from home has eliminated commuting expenses leaving enough cash for savings and investment. However, firms and workers have listed issues of the employment changes. Organizations cite less loyalty, while workers are worried about job security. Governments and businesses, therefore, need to institutionalize the changes to protect both the workers and employers from exploitative engagements.