Working Flexibility

According to Smith (1989), flexibility refers to labor market and labor process restructuring to increased versatility in design and the greater adaptability of new technology in production.There are several types of flexibility. Functional flexibility refers a firm’s ability to deploy employees between activities and tasks to match changing workloads, production methods or technology, associated with multi-skilling and polyvalency. Numerical flexibility enables firms to have the capacity to adjust labour inputs to fluctuations in output to achieve flexibility via the use of non-standard employment contracts such outsourcing and temporary contracts. Financial flexibility means a firm’s ability to adjust employment costs to reflect the supply and demand in the labour market and temporal flexibility enables firms to design flexible working time according to changes in operations. Atkinson developed a new model suggesting that types of flexibility can be brought together in a concept of the ‘flexible firm’. In addition, many UK firms wanted to introduce new organizational structure, therefore breaking up the workforce into 2 groups: Core and Periphery. Focusing on the person rather than the job, the core group conducts the organisation’s key activities and enjoys job security and possibility of career development in return for the obligation to be functional flexibility. On the other hand, periphery group is a fundamental shift towards a more strategic use of flexible labour. It can be divided into two further groups. Internal groups refer to workers such as clerical supervisory who have limited career prospects and high turnover rate because of their relatively deskilled tasks which need the firm’s specific training. The second external group includes outsourced workers with short term contract usually having non-firm specific skills required by a firm on discontinuous basis such as systems analysts. Another is self-employed or agency temporaries. Firms may employ some temporary unskilled workers to do the tasks such as cleaning and these people are paid likely to be poor. It is argued that in this group, numerical flexibility is used to protect employment security of core workers. It is because relatively core groups are associated with superior capabilities, employment involvement and future prospects, thus having competitiveness over periphery groups and avoiding involuntary turnover.

The new model involves the breakup of the traditional hierarchical structure of the firm. Different employment policies can be pursued for different groups of workers. However, the argument that numerical flexibility in periphery groups used to protect job security of core workers suffers many criticisms.

First of all, to view the concept of Atkinson’s model, Pollers (1987) pointed out that the flexible firm model confuses description, prediction and prescription is misplaced. It is difficult to tell which is being used.

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