Network Enterprise for Health

Flexible work practices: current and future trends in working life and the impact on corporate performance TNO Work and Employment

Anneke Goudswaard, Ph.D 24th May 2004, Schaan/Liechtenstein

Content • Trends • •

Flexibility needs Flexibility measures in use

• Impacts: opportunities and risks • Towards sustainable flexibility • Flexibility scan participants ‘Enterprise for Health’ • • • • • • • • • •

Bertelsmann AG Hilti AG HÅG asa Kostal CR, spol. s r.o. Endress 1 Hauser Consult AG Ford Werke AG Stora Enso ALCOA-KÖFÉM LTD. Shell - Engineering of maintenance department Shell - Control laboratory May 24th 2004

2

Company’s need for flexibility Changing market conditions

Changing labour market

Fluctuations and unpredictable markets More variety in products and services

Supply of qualified personnel

Labour flexibility

Higher speed

Demands and needs of employees Legislation

Higher quality demands

Changing work processes

Higher complexity Network organizations Just in time delivery

May 24th 2004

3

Flexibility need: market Mean score

Market issues

Fluctuations in volume

small

great

Product range

small

great

Short delivery time

unimportant

important

Reliability of delivery time

small

great

Predictability

great

small

May 24th 2004

4

Flexibility need: production concept Mean score

Production concept Focus on throughput time

weak

strong

Importance of chains and networks

little

great

Significance of pull production

little

great

Process complexity

little

great

Modularity of the range of products

little

great

May 24th 2004

5

Flexibility need: labour market Mean score

Labour market issues shortage of competent staff

none

serious

qualifications of current staff

low

high

demands regarding quality of working life

little

great

impact of increasing individuality

little

great

restricting influence of rules and regulations

small

large

level of absenteeism

low

high

turnover

low

high

May 24th 2004

6

Company strategies of flexibility •

Ad hoc flexibility: Short-term strategy to fill in sudden peeks or absenteeism through working overtime and hiring temporary agency workers

• Quantitative (numerical) flexibility: Optimal adaptation of the quantity of the personnel to changes in the amount of work, through the implementation of flexible working time arrangements, flexible employment contracts, parttime work and on-call contracts and the hiring of seasonal personnel •

Qualitative (functional) flexibility: Optimal use of the employee’s capacity to perform different tasks when needed due to fluctuations in the demand, through job rotation, job enlargement and job enrichment May 24th 2004

7

Flexibility measures in Dutch companies Quantitative flexibility

Qualitative flexibility

18,6%

14,8%

17,5%

3,1% 4,9% 2% 5,3% Ad hoc flexibility

May 24th 2004

No flexible labour: 33,8%

8

May 24th 2004

company opening hours

status quo

percentage of flexible contracts

expand

part time work

working time flexibility

functional flexibility

Future strategy on flexibility reduce

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

9

Flexibility measures in use (Enterprise for Health) work in teams work different locations work different department job enrichment job rotation leaves flexitime annual hours staggered hours shift: discontinuous shift: semi continuous shifts: continuous compressed week part time lend or borrow labour pools on call work struct. temp agency work seasonal contracts fixed term contracts colleagues taking over use of short term temp working overtime

Functional

Working Hours

Total Contracts

Ad hoc

0 May 24th 2004

1

2

3

4

5

6

7

8

9

10 10

Strategies of

Costs and benefits for the

Costs and benefits for

flexibility

company

the employees

Ad hoc flexibility: - colleagues taking

- quick solution for peak and - overtime: additional

over tasks

absenteeism, no planning

income (short term)

- working overtime

systems needed

- risk for health (longer

- use of short term

- risk of loss of product

term)

temporary agency

quality

- risk for stress (own

contracts

- short term temp work only

tasks not done,

possible in case of low task

instruction of temp

complexity

workers)

May 24th 2004

11

Strategies of

Costs and benefits for the

Costs and benefits for

flexibility

company

the employees

Flexible contracts:

- fill in strong fluctuations in

- job insecurity

- fixed term contracts

the demand of work

- risk for employability,

- seasonal contracts

- avoid overcapacity, low

skill development

investment in labour

- possibility to combine

work (structural use)

- selection of new personnel

work with family life

- on call work

- risk on loss of quality

- work experience

- training needs

-pressure on core (?)

- use of labour pools

- experienced workers

- in comparison to other

- lend or borrow

- planning system needed

forms of flexible

personnel from other

(with other organisations,

contracts: more job

companies

intermediaries)

security and ability for

- temporary agency

- competition among

skill development

companies May 24th 2004

12

Strategies of flexibility

Costs and benefits for

Costs and benefits for

the company

the employees

Flexible working hours:

- longer opening hours

- combination of work

- part time contracts

- optimal use of

and family life, depending

- compressed working

resources

on predictability, and

week

- shorter cycle times

- shift work

- answer to (short and

- staggered hours

midterm) fluctuations

- annual hours and

- answer to individual

averaging schemes

needs of employees:

- flexitime - different types of leaves

attractive employer - in fysically demanding tasks (part time) - planning systems needed (capacity management)

May 24th 2004

control over working hours - health risks depending on work schedule, work cycle (recuperation time) - health also depending on balance job demands/job control - loss of involvement and employability (part time work)

13

Strategies of flexibility

Costs and benefits for

Costs and benefits for

the company

the employees

Functional flexibility

- meet daily variety in

- job rotation

work

- employability, skill

- job enlargement, job

- meet mid- en long term

development

enrichment

changes in work

- possible decrease in

- work in different

- potentially good for

fysical load (job rotation)

departments

employee involvement

- possible risk of

and innovation

emotional exhaustion

- requires continuous

(attention to balance job

investment in HRM

demands – job control,

- competence

information)

- work at different locations - work in teams

management - training needs

May 24th 2004

14

Towards sustainable flexibility •

Integral approach, aiming at: • The adaptability of the organisation (flexibility) to the demands of the market, changes in work processes and personnel needs • In combination with healthy, motivated and employable employees (sustainability)

•

Balance between organisation and individual

•

Participative approach

•

Structural flexibility strategies instead of ad hoc strategies

May 24th 2004

15

TNO Approach on Flexibility (1)

Organization’s goals

Flexibility demand

Flexibility

Impact on organization

May 24th 2004

Employees goals

Flexibility capacity

Impact on employees

16

TNO Approach on Flexibility (2)

Step 1 & 2:

Step 3 & 4:

Step 5 & 6:

• What flexibility is needed facing the demands? (1)

• What is the future strategy (the goals and preferences)? (3)

• What are the conditions for implementation? (5)

• What are the consequences of this strategy? (4)

• Evaluation (6)

• How does the organization respond to these needs? (2)

• Problems and solutions

May 24th 2004

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Company case • Example: • highly innovative company in the semi conductor industry

• Question: • How do we achieve more flexibility with our personnel strategies ? • in particular with our working hours system • cost effective and socially accepted

May 24th 2004

18

Flexibility need in practice 5

5. Higher output in upturn

1. Short term flexibility (unpredictability in daily work)

3c

3b 2

1

2. Mid term flexibility (fluctuations in work)

3. Long term flexibility (response to upturn and downturn) 3a

Horizon

4 May 24th 2004

4. Continuous process of cycle time reduction 19

Different flexibility measures Higher output: • more personnel • longer opening hours

5

3c Flex Mix 1: • flexible working hours (structural) • overtime (incidental) • multi-skilling and job rotation within teams • colleagues taking over

Flex mix 3c Flex•…………….. mix 3b 3b Flex mix 3a •…………….. • use of •…………….. short term

2

1

Flex Mix 2: • flexible working hours (structural) • overtime (incidental) • temporary agency personnel, other short term contracts • multi-skilling and job rotation between teams

4 May 24th 2004

contracts, temporary •…………….. •…………….. agencies, lend and 3a borrow personnel, •…………….. labour pools • job rotation between departments

Horizon

Cycle time reduction 20

Different flexibility measures Higher output: • more personnel • longer opening hours

5

3c Flex Mix 1: • flexible working hours (structural) • overtime (incidental) • multi-skilling and job rotation within teams • colleagues taking over

Flex mix 3c Flex•…………….. mix 3b 3b Flex mix 3a •…………….. • use of •…………….. short term

2

1

Flex Mix 2: • flexible working hours (structural) • overtime (incidental) • temporary agency personnel, other short term contracts • multi-skilling and job rotation between teams

4 May 24th 2004

contracts, temporary •…………….. •…………….. agencies, lend and 3a borrow personnel, •…………….. labour pools • job rotation between departments

Horizon

Cycle time reduction 21

Costs and benefits of work schedules short term flex 10 m anageability

8 hours work day 7 x 24 hrs opening

m id term flex

8

2 shifts (5 x 16 hrs) 6 nr of staff

long term flex

4 2 0

quality of w ork and life

cycle tim e

innovation

output

product quality

May 24th 2004

WIP (rev)

22

Costs and benefits of work schedules Functional flexibility Flexibility in work schedules

short term flex 10

HR rules and coaching, capacity and competence management

m anageability

8 hours work day 7 x 24 hrs opening

m id term flex

8

2 shifts (5 x 16 hrs) 6 nr of staff

long term flex

4

Temporary agency work

2 0 quality of w ork and life

cycle tim e

Flexible work proces Largest capacity in day

Ergonomic improvement of factury innovation

Functional flexibility

output

product quality

support May 24th 2004

WIP (rev)

Work on saturday

23

Conclusion • Balance between organisation and individual • Conditions for sustainable flexibility • • • •

Take care of high job demands Adequate job information in case of functional flexibility Control over working time Access to skill development for employees with flexible contract and part time employees

• Involvement of employees in implementation • Integrated approach • Mix of flexibility measures • Impacts

May 24th 2004

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Discussion

May 24th 2004

25

Annex 1: Employment status in the EU • Results of Working Conditions Survey of European Foundation for the Improvement of Working and Living Conditions (2000) • Results of Case study research European Foundation (2000)

May 24th 2004

26

Three scenario’s • Transfer of unfavorable conditions of work to non permanent employees: • unfavorable ergonomic conditions for non permanent contracts (due to sector)

• Segmentation in conditions of employment: • lack of control over working time • low job control, and • low skill development, for non permanent employees and part time employees

• Intensification of work for ‘core’ workers: • No differences in job demands between permanent and non permanent employees • more active jobs among permanent employees

May 24th 2004

27

Employment status: conditions of work (EU 2000) 100 90 80 70 60 50 40 30 20

26,8

24,9

24,9

13,4

12,7 8,1

10

30,1

7,8

0 unfavourable ambiant conditions

permanent full time non permanent full time May 24th 2004

unfavourable ergonomic conditions

permanent part time non permanent part time 28

Employment status: conditions of employment - 1 (EU 2000) 100 90 80 70 62,1

60

59,8

53,5 49,4

50 40 30 21,3

21,4

24,8

20

26,2 17,9

20,6 16

15,6

10 0 weekends

irregular hours

permanent full time non permanent full time May 24th 2004

lack of control over working time

permanent part time non permanent part time 29

Employment status: conditions of employment - 2 (EU 2000) 100 90 80

73,4

70

66,3

68,9

61,9

60 50 39,5

40 32

30

31,6

26,4

20 10 0 lack of skills

permanent full time non permanent full time May 24th 2004

no training

permanent part time non permanent part time 30

Employment status and job demands & control (EU 2000) 100 90 80 70 60 50 40 30 20 10 0 low strain

passive work

full time permament full time non permanent May 24th 2004

active work

high strain

part time permanent part time non permanent 31

Annex 2: Labour Flexibility in the Netherlands • Results of Dutch Ministry of Social Affairs Employers Survey (1998)

May 24th 2004

32

Impact of having a flexible contract on employees Employees with a temporary contract have: •

approx. 3 times more often experienced downwards mobility (temporary agency workers 4 – 5 times more)

•

2 - 3x less chance of additional training (temporary agency workers 4 – 5 x)

In comparison with employees with a permanent contract •

Taking into account all other variables, there is no difference in commitment to the work (only specific groups)

May 24th 2004

33

Impacts of having a (small) part time contract Employees with a small part time contract (