Andrea Signoretti, Sandro Trento, Marco Zamarian, Enrico Zaninotto

Does Work Flexibility Help Firm Flexibility? Case-study Evidence

  • Abstract

Informations and abstract

Keywords: Labor Contracts; Public Policy; Turnover-Vacancy-Layoffs.

This exploratory study aims at understanding how different labor contractual forms are used by firms to improve their adaptability to markets. On the product markets, companies face the need to variate their output to cope with seasonal fluctuations or erratic demand or with customized requests by clients. On the labor markets, companies need to match workers' characteristics and their production needs. Since matching is characterized by uncertainty, the process can be particularly costly if choices are difficult to reverse. We claim that these issues of market adaptability can be solved by combining technological choices, organizational flexibility, external mobility of workers and production outsourcing. Most empirical studies on flexibility often rely on firm-level data that lack the level of detail needed to pinpoint the goals pursued by companies through the use of atypical labor contracts. This is a major problem given the recent Italian reforms on the regulation of labor market and the ensuing debate on their effects. This is also the main reason why we adopted a comparative, multiple case study technique to explore the solutions implemented by twelve manufacturing firms operating in North-East Italy, selected through the logic of purposive sampling. The analysis of the cases has been based on the triangulation of different data sources: balance sheets, corporate web-sites and semi-structured interviews conducted with key informants within each company. Interviews, in turn, have been analyzed iteratively by the researchers until a shared interpretation was reached. Results show a deployment of non-standard forms of employment (NSFE) when companies face seasonal demand. However, such a deployment increases when the flexibility of the internal organization is low. On the contrary, the lowest level of NSFE deployment is found among companies manufacturing custom products, since skilled workers are required. This group of companies, consequently, faces intensely the problem of matching workers skills and job requirements. The highest usage of atypical contracts feature firms coping with market uncertainty, where the NSFE are used for brief periods with the costs of flexibility unloaded on atypical workers.

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