Employment practices, labour flexibility and the Great Recession: An automotive case study

Abstract

Most British firms adjusted employment practices in some way in response to the 2008 recession, though compared with previous recessions there were fewer redundancies than might have been anticipated given the severity of the downturn. While it has been suggested that employers may have utilised alternative flexibility strategies which ameliorated the need for downsizing, there are few studies of how employers responded as they did at the company level. This article presents an in-depth case study of an automotive parts manufacturer deeply affected by recession but which did not make large-scale redundancies. The study reveals how existing labour flexibility strategies, and especially numerical flexibility, helped the firm navigate recession. However, the study also reveals how staffing practices have been modified since the recession as part of an organisational attempt to improve efficiency. This is achieved by segmenting the workforce into three groups with different levels of certainty and security.

Victims, survivors and the emergence of ‘endurers’ as a reflection of shifting goals in the management of redeployment

“…For example, Johnstone (2019) shows that avoiding compulsory redundancies are typically viewed by HR as a more responsible way of managing restructuring, ameliorating potentially negative impacts on job insecurity, status and tenure. The outcomes of internal redeployment can hence shape the nature of psychological contracts post-restructuring.…”

“…The prevalence of internal redeployment is illustrated in the UK Workplace Employment Relations Study data where 14% of employers developed strategies for internal redeployment as a means of managing restructuring (WERS, 2011). Case study research also demonstrates that internal redeployment has been a feature of the UK steel and automobile sectors (Johnstone, 2019; McLachlan, MacKenzie, & Greenwood, 2019), along with examples of its use as part of restructuring exercises in organisations such as the National Grid and BT (MacKenzie, 2000; Tarren, Potter, & Moore, 2009) and across Europe more generally (Stuart, Forde, MacKenzie, & Wallis, 2007). Redeployees have, however, specific needs distinct from victims and survivors.…”

“…The implementation of demonstrably ‘just’ and ‘fair’ processes has been considered strategically important for the maintenance of a positive psychological contract post‐restructuring (Teague & Roche, 2014, p. 179). For example, Johnstone (2019) shows that avoiding compulsory redundancies are typically viewed by HR as a more responsible way of managing restructuring, ameliorating potentially negative impacts on job insecurity, status and tenure. The outcomes of internal redeployment can hence shape the nature of psychological contracts post‐restructuring.…”

Developing a framework for responsible downsizing through best fit: the importance of regulatory, procedural, communication and employment responsibilities

“…Research into responsible downsizing has spread across business and management literature, and a variety of terminology has described the topic: socially responsible restructuring (Forde et al, 2009); responsible restructuring (Cascio, 2002;Johnstone, 2019;Teague & Roche, 2014); socially responsible workforce reduction (Bergström, 2007); social responsibility in downsizing (Bergström & Diedrich, 2011;Van Buren, 2000); social responsibility in business closures (Ahlstrand, 2010); CSR in restructuring (Bonvin, 2007); ethical downsizing (Hopkins & Hopkins, 1999;Long, 2012); corporate responsibility in lay-offs (Kieselbach & Mader, 2002); CSR in closedowns (Rydell & Wigblad, 2011;Snell & Gekara, 2020); and responsible downsizing strategy (Tsai & Shih, 2013a, 2013bTsai & Yen, 2020).…”

“…Regulation varies across and within nations, relating to length of employee consultation and trade union influence along with the degree of stakeholder engagement. Research into downsizing has indicated how national and institutional regulatory contexts may enable or constrain the management of the process (Bergström, 2007;De Witte et al, 2005;Garaudel et al, 2008;Johnstone, 2019;Kirov & Thill, 2018;Mäkelä & Näsi, 2010;Pulignano, 2011;Snell & Gekara, 2020). For instance, research points to the role of negotiations with unions over downsizing in terms of regulatory norms or values.…”