Flexible Employment Contracts Research Articles

INVESTIGATING THE ECONOMIC IMPLICATIONS OF LABOUR MARKET TRENDS ON BUSINESS HIRING PRACTICES

Labour is a unique and vital resource for a business. Every countrys regulations, or the institutional mechanisms that make up its labour market, establish the framework for all labour contracts. The main focus of our research is the criticism of the increasing gap between the requirements of businesses and the actual implementation of employment contracts under present regulations. Whether the labour market and the firms regulatory institutional mechanism design are appropriate for the needs of the particular firm and the nations economy is the main economic matter at hand. The flexibility of contract between employers and employees was diminished during the 20th century as a result of the majority of employment regulations being tightened under the pretext of increased worker protection. The exact opposite was what businesses required and demanded: more flexible employment contracts. Because it controls employment relationships and establishes the parameters of contract flexibility, employment regulation is a crucial component of the legal business framework. These factors affect a firms ability to compete internationally as well as the overall health of the economy. We hypothesised that because regulations cause businesses to put off hiring, an employment climate that is less flexible will be less beneficial. We look into the labour markets challenges and the regulatory practises in a few areas of Vellore District. Flexibility in the labour market is a composite measure of a few chosen variables that are thought to eventually affect a countrys economic performance. Finding the variables that affect labour market flexibility and the chosen output variables like employment and productivity, among others is our goal. KEY WORDS: Labour, Economic conditions, Market, Chi-square, Employment

Employment Flexibility and Capital Structure: Evidence from a Natural Experiment

Using a unique panel data set of manufacturing firms in Spain in 1994–2006, I show that the use of flexible (shorter and cheaper-to-fire) employment contracts promotes debt financing. I build the identification strategy on the intertemporal, cross-regional, and cross-gender variation in government subsidies that differentially encouraged firms to hire workers on the less flexible contracts. A thought experiment of prohibiting an average firm from hiring workers on flexible contracts suggests that such a firm should reduce its debt-to-capital ratio by 7%. These findings suggest that flexible employment contracts reduce operating leverage and the fixity of firms’ costs, increasing financial leverage. The unique institutional environment allows me to isolate this mechanism from collective bargaining and total labor cost channels. I further show that employment flexibility increases firm performance for firms that benefit most from operating leverage reductions and depend more on external financing. The results demonstrate how management can use heterogenous labor contracts to improve firm outcomes. This paper was accepted by Gustavo Manso, finance. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4560 .

How Firms Transfer Financial Risks to Employees: Stock Price Volatility and CEO Power

Purpose - We investigate how firms transfer financial risks to employees in a form of flexible employment contracts and layoffs. Design/methodology/approach - Based on the literature on the prevalence of shareholder value ideology and the associated ‘risk shift’, we examined how stock price volatility is associated with a firm’s use and hiring of nonstandard employees, and the number of employees lay-offed. We test our hypotheses using a longitudinal, multi-source, dataset of Korean firms from 2003 to 2011. Findings - We found support for the relationship between stock price volatility and flexible employment contracts and layoffs after controlling for actual risks such as increased debt or decreased sales. However, we found that the relationship is moderated by the power of professional CEOs relative to that of shareholders, in that powerful CEOs are more likely to transfer the external risks, i.e. stock price volatility, to employees. Research implications or Originality - This study contributes the emerging stream of literature that explore the effect of stock market pressures and governance structures on human resource management.

Employers’ views on flexible employment contracts for younger workers: Benefits, downsides and societal outlook

Employers are instrumental in the growth of non-standard employment, which exposes predominantly younger workers to higher levels of insecurity. Using an interdisciplinary theoretical lens, this article identifies which considerations, both positive and negative, underlie employers’ decision making with regard to the use of flexible contracts for younger workers and discusses how employers perceive future implications of an increasingly flexible labour market. Findings are based on interviews with 26 managers, HR professionals and directors working in different sectors of industry in the Netherlands: local government, education, health care, retail, corporate services and transport and logistics. While acknowledging benefits to the use of flexible contracts, interviewed employers also reported downsides to this practice. Using flexible contracts complicates retention of young talent, deters investment in training, negatively affects social morale on the work floor and puts pressure on younger workers. Interviewees did not deem employers primarily responsible for monitoring societal consequences of an increasingly flexible labour market and often did not see the bigger picture of how increased flexibility could have negative societal consequences. The findings suggest that corrective actions will not come from the side of employers.

Robots and Labor in the Service Sector: Evidence from Nursing Homes

In one of the first studies of service sector robotics using establishment-level data, we study the impact of robots on staffing in Japanese nursing homes, using geographic variation in robot subsidies as an instrumental variable. We find that robot adoption increases employment by augmenting the number of care workers and nurses on flexible employment contracts, and decreases difficulty in staff retention. Robot adoption also reduces the monthly wages of regular nurses, consistent with reduced burden of care. Our findings suggest that the impact of robots may not be detrimental to labor and may remedy challenges posed by rapidly aging populations. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

'It's mostly about the job' - putting the lens on specialist rural retention.

Rural health services throughout the world face considerable challenges in the recruitment and retention of medical specialists. This research set out to describe the factors that contribute to specialist workforce retention and attrition in a health service in rural Tasmania, Australia. This qualitative study utilised in-depth interviews with 22 medical specialists: 12 currently employed by the service and 10 who had left or intended to leave. Interview transcripts were thematically analysed to identify professional, social and location factors influencing retention decision-making. Professional and workplace factors were more important than social or location factors in retention decision-making. Tipping points were excessive workloads, particularly on-call work, difficult collegial relationships, conflict with management, offers of more appealing positions elsewhere, family pressure to live in a metropolitan area, educational opportunities for children and a lack of contract flexibility. Inequitable workload distribution and the absence of senior registrars contributed to burnout. Financial remuneration was not a primary factor in retention decision-making, however, there was acknowledgement of the need to ensure equitable pay scales, flexible employment contracts including statewide positions and increased CPD payments/leave. Specialists who had autonomy in determining their preferred work balance tended to stay, as did those who had family or developed social connections within the area, rural backgrounds and a preference for rural living. To improve specialist workforce retention, rural health services should ensure a professionally rewarding, harmonious work environment, without onerous out-of-hours demands and where specialists feel valued. Specialists should have autonomy over workloads, flexible contracts, appropriate financial remuneration and enhanced access to CPD. New specialists and their families should have additional support to assist with social integration.

Three Perspectives on the Dutch Growth of Flexible Employment

The growth in flexible work arrangements has been more pronounced in the Netherlands than in most other western economies. Own account work, fixed-term contracts and contracts with variable hours all have become more prevalent since the early 2000’s. This paper describes the growth of flexible work arrangements from three perspectives. The institutional perspective reveals that the Dutch institutions provide incentives and possibilities for employers to circumvent institution-based risks and costs, and for workers to avoid taxes and social security contributions. The individual perspective shows that most workers nevertheless prefer an open-ended employment contract, which some groups manage to obtain more often than others. Over the life cycle the share of flexible employment contracts decreases among all cohorts and all social groups, but more so among the higher educated and men. Own account work, which is mostly a positive choice, increases over the life cycle. The job perspective shows that flexible work arrangements have grown in all sectors of the economy. In some sectors the increase is predominantly in own account work, in other sectors predominantly in flexible employment contracts, without a clear relation to sector characteristics.

From formal to informal: executives who migrated to flexible work

Purpose: Given the changes occurred in the organization and work, flexible employment contracts are generally associated with a search for more productive employees. The purpose of this research is to understand the behavioural changes needed by executives to face up to the reality of these new flexible models of work. Design/methodology/approach: This paper presents the study that was undertaken in the city of Sao Paulo (SP - Brazil ) with 30 executives who migrated from formal employment contracts – job positions - to more flexible formats. Findings: The results showed that the interviewees use various terms for describing themselves: consultant, independent, franchised, businessperson, councillor, among others, and suggested that they have to change their self-perceptions to be adapted to flexible work. Research implications: This research concerns a topical subject at a time when more people are changing to self-employed status and Brazil is an interesting context for the study. This discussion helps us to understand new dimensions of the global work market. Originality/value: This study shows that t he narratives that these executives use to illustrate their professional trajectories are related to how they deal with time, with their network and how they should change their mentality and behaviour in order to achieve success. Lastly these professionals must display competence, even they are sometimes betrayed by their listless gestures, voice and look.

L’Italia negli occhi dei giovani. La condizione lavorativa italiana degli ultimi venti anni raccontata attraverso la letteratura.

ITALY IN THE EYES OF THE YOUNG. THE ITALIAN WORKING CONDITIONS OF THE LAST TWENTY YEARS AS RENDERED IN LITERATURE This paper examines how the working conditions in Italy are represented in the literature of the last 20 years written by young authors, from the 1990s and the beginnings of Postmodernism’s influence on young people, up to the new century and its relative propensity for risk-taking. this article examines the changes that have occurred to society and its needs; emphasis is placed on the evolution of legal regulations and on the creation of the new literary topos, such as the call centre—a contemporary non-place of the precariat. In this article, much attention is paid to the necessity of writing as a method of capturing the reality, or simply as a way of making a living. the aforementioned issue, which is highly topical, became the subject of numerous novels written by the young and often unemployed. especially in recent years, this literary protest emerged to condemn flexible employment contracts. It is worthwhile to mention the following recent works related to these issues: Il Mondo Deve Sapere (Murgia) and Generazione Mille Euro (Incorvaia, Rimassa), as well as the classic Tutti Giù per Terra (Culicchia). the literary aspects of this essay are enriched by the theories of zygmunt Bauman, Richard Sennett, Ulrich Beck and Anthony Giddens to give an overall picture of the contemporary work conditions of the young, combining theory with real experiences.

Return to work in sick-listed cancer survivors with job loss: design of a randomised controlled trial.

BackgroundDespite long-term or permanent health problems, cancer survivors are often motivated to return to work. For cancer survivors who have lost their job, return to work can be more challenging compared to employed survivors, as they generally find themselves in a more vulnerable social and financial position. Cancer survivors with job loss may therefore be in need of tailored return to work support. However, there is a lack of return to work intervention programs specifically targeting these cancer survivors. The number of cancer survivors with job loss in developed countries is rising due to, amongst others, increases in the incidence and survivor rate of cancer, the retirement age and the proportion of flexible employment contracts. Hence, we consider it important to develop a tailored return to work intervention program for cancer survivors with job loss, and to evaluate its effectiveness compared to usual care.Methods/DesignThis study employs a two-armed randomised controlled trial with a follow-up period of 12 months. The study population (n = 164) will be recruited from a national sample of cancer survivors (18–60 years), who have been sick-listed for 12–36 months. Participants will be randomised by using computerized blocked randomisation (blocks of four). All participants will receive usual care as provided by the Dutch Social Security Agency. Additionally, participants in the intervention group will receive a tailored return to work intervention program, which includes vocational rehabilitation and supportive psychosocial components, as well as (therapeutic) placement at work. The primary outcome measure is duration until sustainable return to work; the secondary outcome measure is rate of return to work. Other parameters include, amongst others, fatigue, coping strategy and quality of life. We will perform Cox regression analyses to estimate hazard ratios for time to sustainable return to work.DiscussionThe hypothesis of this study is that a tailored approach for cancer survivors with job loss is more effective, regarding return to work, compared to usual care. The results of this study will provide insight into the ways in which return to work can be facilitated for cancer survivors with job loss.Trial registrationNetherlands Trial Register: NTR3562.

Modern working life: A blurring of the boundaries between secondary and primary labour markets?

Today, there is a widespread suggestion that permanent workers are increasingly subject to precarious working conditions. Due to international competition and declining union density, job qualities of permanent workers are assumed to be under strain. According to proponents of a democratization of risk rationale, low job qualities that were traditionally attached to secondary labour markets are transferred to workers in primary segments of the labour market. In this study, the authors test this theoretical rationale among workers in 11 Western European economies, using two waves of the European Working Conditions Survey. The results do not confirm a democratization of labour market risk. Lower job qualities are highly associated with flexible employment contracts and highlight a clear gap between insiders and outsiders.

Flexibel werken: van disbalans naar evenwicht

Labour market flexibility: clues for a better balance Labour market flexibility: clues for a better balance In order to strike a better balance between the advantages and the disadvantages of flexible forms of employment, the government intends to reform the existing dismissal protection and unemployment legislation, whilst at the same time taking initiatives to strengthen the position of those on flexible employment contracts. The question is, however, whether this double aim can be achieved with the measures proposed by the government. Are they capable of tackling the underlying problems effectively? In this article it will be argued that addressing the existing imbalance calls for a broader approach, focusing on fostering investments in human capital, more flexibility in the traditional employment contract and successful transitions in the labour market.

Non-standard employment and leadership research: On consequences for conceptualizing the leader–follower relationship

The article argues that non-standard employees (NSEs) perceive the employee–employer relationship and hence the leader–follower relationship differently, when compared to workers in standard employment contracts. It highlights relevant differences between employees in flexible employment contracts and standard employees. It seeks to demonstrate that the emerging NSE-follower has consequences for leadership research. Perhaps the most important ramification is that the implicit assumptions in conceptualizing the ‘typical’ leader–follower relationship may no longer be suitable, facing today's workplace reality. In this sense, in order to take the present and continuous changes in the workforce seriously the concepts and theories used in leadership research need to be rethought.

And I Will Try to Fix You: A Study of Heterogeneity in Job Satisfaction with Implications for Flexible Employment Contracts

This paper is an empirical study of slope heterogeneity in job satisfaction. It provides evidence from the generalized ordered probit models that different job characteristics tend to have different distributional impacts on the overall job satisfaction. For instance, standard models tend to significantly underestimate the effects of monthly salary and hours worked at generating the highly satisfied workers, whilst lowering the incidence of the very dissatisfied workers. Although our results should be viewed as illustrative, we provide discussions of their potential implications for employers and they could help with the design of employment contracts.

Flexible Contract Workers in Inferior Jobs: Reappraising the Evidence

AbstractThere is concern that the increase in flexible employment contracts witnessed in many OECD economies is evidence of a growth in low‐pay, low‐quality jobs. In practice, it is difficult to evaluate the ‘quality’ of flexible jobs. Previous research has primarily investigated objective measures of job quality such as wages and training or subjective measures such as job satisfaction. We jointly evaluate these elements of flexible employment contracts using a job quality index. Analysis of this index demonstrates that flexible jobs are of a lower quality. Differences in the subjective and objective assessment of factors like pay and hours are evident.

Labour Protection and Productivity in the European Economies: 1995-2005

Research QuestionThe present study examines cross-national and sectoral differences in multifactor productivity growth in sixteen European countries from 1995 to 2005. The main aim is to ascertain the role of flexible employment contracts and collective labour relationships in explaining the ample differentials recorded in the European economy.Research Findings We use the EU KLEMS database for growth accounting and a broad set of indicators of labour regulations, covering two distinct 'areas' of labour regulation: employment laws and collective relations laws. This comprehensive approach allow us to consider arrangements that regulate allocation of labour inputs (fixed-term, part-time contracts, hours worked) and of payoff and decision rights of employees. We find that, since 1995, European countries have not followed similar patterns of growth. A large number of variations between European economies are caused by deep differentials in multifactor productivity and part of this heterogeneity is caused by sectoral diversities. We show that, in labour-intensive sectors such as services, fixed-term contracts, which imply shorter-term jobs and lower employment tenures, may discourage investment in skills and have detrimental effects on multifactor productivity increases. We also find that some forms of labour regulation and arrangements that give a 'voice' to employees mitigate these perverse effects on efficiency patterns. Policy Implications Employment protection reforms which slacken the rules of fixed-term contracts cause potential drawbacks in terms of low productivity gains. More stringent regulation of these practices, as well as a climate of collective relations, sustain long-term relationships and mitigate these negative effects.

Labor market reforms, job instability, and the flexibility of the employment relationship

We endogenize separation in a search model of the labor market and allow for bargaining over the continuation of employment relationships following productivity shocks to take place under asymmetric information. In such a setting separation may occur even if continuation of the employment relationship is privately efficient for workers and firms. We show that reductions in the cost of separation, owing for example to a reduction in firing taxes, lead to an increase in job instability and, when separation costs are initially high, may be welfare decreasing for workers and firms. We furthermore show that, in response to an exogenous reduction in firing taxes, workers and firms may switch from rigid to flexible employment contracts, which further amplifies the increase in job instability caused by policy reform.

Flexible Contract Workers in Inferior Jobs: Reappraising the Evidence

There has been concern that the increase in non-standard or flexible employment contracts witnessed in many OECD economies is evidence of a growth in low-pay, low-quality jobs. In practice, however, it is difficult to evaluate the 'quality' of flexible jobs. Previous research has either investigated objective measures of job quality such as wages and training or subjective measures such as job satisfaction. In this paper, we seek to jointly evaluate objective and subjective elements of flexible employment contracts. Specifically we develop and use an index of job quality that incorporates both subjective and objective elements. Analysis of this index demonstrates that flexible jobs are of a lower quality. However, this approach suggests that analysis of, for instance, job satisfaction alone overstates the negative impact of flexible contracts on workers.

Identifying the effects of firing restrictions through size-contingent differences in regulation

We study the effects of the more stringent employment protection legislation (EPL) that applies in Italy to firms with over 15 employees. We consider firms' propensity to grow when close to that threshold and changes in employment policies when they pass it. Using a comprehensive matched employer–employees dataset, we find that the probability of firms' growth is reduced by around 2 percentage points near the threshold. Using the stochastic transition matrix for firm size, we compute the long-run effects of EPL on the size distribution, finding that they are quantitatively modest. We also find that, contrary to the implications of more stringent firing restrictions, workers in firms just above the threshold have on average less stable employment relations than those just below it. We document that this might be because firms above the threshold make greater use of flexible employment contracts, arguably to circumvent the stricter regulation on open-end contracts.

Free or precarious? A comparison of the attitudes of workers in flexible and traditional employment contracts

This study contributes to research on the impact of different kinds of employment contract on worker attitudes in the context of debates about the changing nature of employment in the 21st century and in particular the emergence of what have been described as either free or precarious workers. Work experiences and attitudes associated with part-time, temporary and multiple contracts are compared with those of workers in single, permanent, full-time jobs. Among a sample of UK pharmacists, few significant differences are found between workers on any of these contracts, either singly or in combination, and those in traditional employment contracts. The role of contract of choice and work orientations as potential mediators was explored. Although both were associated with attitudes, they had only a very minor role as either mediators or moderators. It is concluded that among this sample of professional workers, those on atypical employment contracts report experiences and attitudes that are at least as positive as those of workers in traditional employment contracts.