About Mia Dragostin
Topic: Trends in employment, demography, and the labour market indicate more “older” people are continuing in employment and some organisations are actively seeking “older” workers; there are more women than men in part-time work; and there is a drive to more flexible working. With reference to theory and an appropriate range of literature, consider the ways in which those responsible for the management of training and development might best respond to those trends.
Abstract
The reduced labor pool due to aging population and declining birth rates, determines employers to focus their attention on other groups of potential workers or on alternative work arrangements. Therefore, the traditionally excluded groups of elderly workers and women/men with family responsibilities prove to be real solutions to labor force decrease. Employers increased the usage of the existing labor force by reducing the pressure of full-time work and by orientating towards what is called flexible work arrangements (FWAs). I consider that FWAs could represent important adjustment policies undertaken by HR departments in their planning activities, and represent a new challenge for training and development function.
The present paper analyzes the above trends from a HRM perspective, by assessing the trends and forces (socio-cultural, economic, technological and political) which influence the interaction between employers and employees. This holistic view of the interactions helps us to easier identify their impact and implications for HRM’s activity.
In the first part of the paper are discussed the demographic influences and their implications for HRM. In the second part are analyzed the part-time and other FWAs and their influence on HRM. In the third part are identified the implications of previously analyzed factors on HRM strategy and specifically for training and development. The last part of the paper represents the conclusions.
1. Environmental pressures on HRM planning strategies
The human society is committed to democratic principles of equality (Agarwal, 1998). In HRM’s practice this commitment is demonstrated when the employment decisions are related to an individual’s work performance, and not to his/her personal and demographic characteristics. Retirement based on age criterion, and not on productivity and/or competence, contradicts the principle of equality, thinks Agarwal (1998). Similarly, we can conclude that any working decision made on any other criterion that individual’s productivity and competence defy the democratic value of equality.
Champy (1997) suggest that companies’ growth depends on their ability to apply new technology and to quickly respond to changes in environment. But to simply adapt to technological advancements is not enough, a company depending as well of its adaptability to the democratic values of the society. Therefore, any company pursuing competitive advantage needs to manage innovatively the human resource (progressively a scarce resource - especially in developed countries). Consequently, I argue that HRM has to find innovative policies, able to attract, motivate and retain the qualified workforce. In order to attain this goal, training and development activities represent an important HRM tool.
1.2. Demographic influences on workforce supply
1.2.1. Longer life expectancy
Population in Canada is getting older and living longer (Agarwal, 1998): the life expectancy forecast for 2011 being of up to 77 years for men and 84 years for women by 2011 (Agarwal, 1998). In UK life expectancy increased as well (Anonymous, 2005), the forecast for 2051, suggesting that men aged 65 could hope for 22 years more, and women for 24.
According to law, people are considered old persons, with retirement rights, around 60- 65 years. The age differs from one state to another, and the current general trend is to call them senior citizens. However, people consider themselves as being old only when they are not able to take care of themselves, and when become dependent. This view is important for HRM approach to elderly workers.
1.2.2. Increase of the percentage of elderly workers
Age distribution of labor force in Canada: proportion of those over 25 is of 83,6% in 1995 (Agarwal, 1998). National Statistics UK (2005b), indicates that if in 2003 the 35-39 aged people were preponderant, by 2051 the preponderant group of age will consist of 60-64 aged people.
Still, there is a large part of unused older workforce, as older people participate less actively in the labor market, even if their percentage in population gets higher (Agarwal, 1998). The same trend that shows the number of people aged 65 and over is three or four times more than the number of the active ones, is found in UK as well (annex 1).
1.3. Implications
These data prove that aging is indeed a global phenomenon, and is no longer just a trend, but a present reality, mainly in the developed countries. Still, for the developing countries we need to undertake a separate research to identify correctly the trends in human resource demography.
In the first instance aging population could be seen as a problem reserved for public policies and governments, who have to deal with increasing costs of benefits and of health system.
But when the low birth rate is related with the age distribution of labor force, we understand the impact exerted by aging on every business: it affects the pool from where the skilled labor force is hired. When we take into consideration, for instance, the legal incentives for migration that some states promote (Canada, New Zeeland, Australia) – proving a national policy for forestalling workforce, it is easier understood how important the matter of labor market’s size and quality is.
1.4. Why would older people work after retirement age?
Older workers might want to remain employed in order to improve their economic standards. With an increase of contingency employment contracts (Agarwal, 1998), lower income and lower retirement benefits are expected. This issue relates to the poverty reduction policies sustained by governments.
Retired senior citizens are associated in developing countries with living conditions close to poverty line. This situation could generate government’s interest to encourage by laws and regulations the older workers activity. This could ensure better living conditions, as long they are able to do this. But here is another problem: in developing countries the low living conditions is generally related with a low health level. Hiring old people with damaged health could cost companies much than they could afford, therefore HRM should be cautious.
On the other hand, in a developed country as Japan, the risk of hiring older people decreases, in this respect: the healthy people over 60 represent 85,9%. With such a large percentage of healthy elderly people, 90% of them declare they want to continue working after retirement age, using as main motivation economic reasons, the desire to maintain the present living standard (JMHLW, 2005d). This situation proves that the national policy towards improving health level may result into self-sustained older people work-force. For HRM this example proves that the concern for employees’ health might prove to be a long-term investment in people.
Another reason for older people to work after retirement age is related to health and lifestyle. Agarwal (1998) suggest that the bad effect on people’s health and well-being related to mandatory retirement could be diminished by encouraging old people to work. Similarly, National Audit Office Report (2004) claims that people working beyond retirement age are in better health and happier compared with those not working. Still, in everything should be kept a balance, too much optimism could generate inaccurate forecasts, because “old age – even now when old age isn’t quite what it used to be – is a time of decline and loss” (original emphasize, Rubin, 2007, p. 2). Longer life does not necessarily imply healthy life for everyone, in equal “quantities”. Regardless the desire of companies to make arrangements for using elderly workers, these arrangements could be feasible only if people are healthy and willing to further contribute.
And finally, flexible retirement is a form of promoting gender equity. Women, during their working life, need to interrupt working, generally to undertake their family responsibilities, at age of mandatory retirement, they could not benefit of complete pension benefits. Thus, mandatory retirement could affect women’s rights (Agarwal, 1998). Governments amended laws in order to prevent this. In US the mandatory retirement is virtually eliminated through Age Discrimination in Employment Act. In Japan the personnel strategies already make use of older workers by extending the retirement age and reemployment of elderly (JMHLW, 2005b). Lowe (1991, cited in Agarwal, 1998) indicates as well Canadian law complies with Canadians’ preference for flexible retirement.
In conclusion, legal stipulations have a globally trend to satisfy older people’s desire or need for flexible retirement, and HRM strategies have to comply with these new laws.
2. Part time working
2.1. Increase in part-time labor
In Canada the percentage of part-time workers in labor force increased from 10,6% in 1976 to 18,6% in 1995 (Statistics Canada 1996 cited in Agarwal, 1998). Legislative stipulations (as the right to request work flexibility) in UK emphasize the need to regulate the labor market according to existing social trends (Holt & Grainger, 2005).
2.2. Who prefers part-time work?
Part-time work is required first of all by women (JMHLW, 2005c), especially women with family responsibilities (Kropf, 1999).
Women represent an important work resource to be attracted by companies, and Allen & Corselli-Nordblad (2007) reveal that in EU inside the band of age 25-54, the inactive women account for 23,6%. The main justification for their inactivity is family responsibility. But it seems that even if there is a large need of workforce, and women could satisfy the demands, there is still a great reluctance in seriously engaging women in work). Reports indicate “some companies are still cautious about active utilization of female workers” (JMHLW, 2005c, p. 43).
Secondly, men are as well interested in part-time work, and Kropf (1999) cites the case of a man in a two incomes family, who took the “liberty” for himself of choosing a flexible arrangement for his job.
2.3. Why do people look for part-time work
In traditional, rigid work systems, people had to choose between work and family. None of these options is any longer desired by employees. People look for a fair and healthy balance between personal life and work. Employees need larger flexibility in matching work schedules to personal lives, especially needed by one parent households or by persons who are family caretaker.
These facts required the transition from traditional “9 to 5, Monday to Friday” work schedule to flexible work arrangement. This transition takes place into two large categories: full-time and part-time (Kropf, 1999). Full-time flexibility involves flextime and compressed work weeks, part-time flexibility is dealing with job-sharing or reduced time schedules. And more, Kropf (1999) indicates an orientation towards “flexible hours”, defined as the which was defined as “flexibility to arrive late, leave early, or work at home as needed” (Kropf, 1999, p.178)
Interest in flexibility is a general phenomenon, manifested as well in Japan, where there is registered both an increase of employees with less than 35 hours per week, as well as an increase on employees’ number who choose to work 60 hours or more per week (JMHLW, 2005b).
Similar trends towards flexible working hours are recorded by Self & Zealey (2007), with the accepted average of 48 hours a week.
2.4. What are the benefits of FWAs
It was reported that FWAs increased part-time workers’ morale, productivity and loyalty to the company (Kropf, 1999). Mattis (1990) testifies as well on productivity improvement for part time workers, especially in the context of public servants, who were not able to be productive continuously at a high level 8 hours a day, 5 days a week, due to high burnout factor.
Herman Group’s Trend Alert (2007) reports the fact that employers play games in work time (53% of interviewed ones acknowledged they play at least once a day), with a duration between 15 up to 60 minutes. Workers’ explanation for playing was the need to relax from the high-stress. High stress relief could be handled either by part time working or, as Herman Group proposed, by integrating gaming into work schedule, thus gaining control over the loss of time. This case proves that innovative solutions are required for new challenges.
So, part-time work could help employees balance their personal/work life, employers get better productivity due to reduced stress levels, and even reduced absenteeism rates.
2.5. Dark side of part-time working
Lawrence & Corwin (2003) list the benefits of part-time jobs for employees: they develop career without the full-timers’ imbalanced personal-work life. But in the same time, the authors reveal that part-timers could be perceived as less committed and less serious than their full-time colleagues.
A part-time career could be difficult to manage, notes Bailyn (1993 cited in Lawrence &Corwin (2003). Kropf (1999) indicates that part-timers need to acquire new skills (time management, communication skills) in order to develop initiative and independent work. Furthermore, Kropf (1999) reports that when the work-load is not adjusted accordingly to a part-time job, people could be paid less, but the same amount of work as in full-time arrangements was involved.
Bendapudi et al. (2003) suggest that is important to analyze more deeply the reasons for choosing part-time work, by carefully delimitating those who really want flexible, non-standard work engagements, of those who do not have alternative of full-employment available. Eurostat (2003) suggests as well that a clear difference between voluntary and non-voluntary part-time options should be made: while voluntary part-time proves that in society there are options that enable workers for a better life style, the non-voluntary part-time reveals in fact that labor market does not offer enough full-time jobs. This later understanding of part-time work, solely as an alternative of unemployment raises awareness when equaling the part-time with better life style. I consider that the part-time percentages revealed in statistics should be regarded with greater sensitivity.
2.6 Performance evaluation difficulties for part-time work
Part-time work generates a question: do employers pay for employee’s time or for their contribution to business?
Part-time work disrupts the pattern of assessing professional work. Traditionally, involvement was equaled to clock time dedicated to work inside the company. This means that part-time workers are supposed to expect lower salaries, regardless their actual performance? Are HRM policies in place to deal with these new questions?
In a historical view, Mattis (1990) supports the need to adjust the traditional assessment of working results based solely on time: the 8 hours shift belonged to industrial era, people were serving machines. But in an economy where people are expected to perform, human performance simply cannot find a real equivalent into the number of hours worked, Therefore, HRM is requested to address correctly this equity problem.
Keld (2002 cited in Bendapundi 2003) notes that for part-timers, the content of work introduces even more difficulty in performance assessment. When tasks are clearly defined (e.g. packing in a warehouse), the performance is easily determined; but when the tasks are complex (e.g. managerial tasks), it cannot be precisely evaluated if the worker could have performed better. This fact implies that new approaches for performance evaluation need to be found by HRM.
3. Training and development opportunities and challenges provided by FWAs
First opportunity for HRM in training and development is to benefit of new technology when coordinating FWAs. McWilliams et al. (2001 cited in Bendapundi 2003) suggest that much of the flexibility of work in a globalized economy is due to technological developments. Consequently, HRM could promote Internet communication and internet based business operations, not just for daily operations, but as well for training and development. The development of e-learning witnesses this opportunity.
Secondly, the profits of the business when training and development function takes into consideration FWAs are important: National Audit Office Report (NAO) (2004) reveals that older people could bring stability (by lowering turnover), and experience (as a way of knowledge sharing). Both recruiting and training and development activities benefit in this case. Thus, the HRM difficulties in recruiting technical, managerial and professional employees, could be lessened, according to Towers Perrin and Hudson Institute Canada study (1991, cited in Agarwal, 1998), by using companies’ own skilled and valuable aging employees. Furthermore, Kropf (1999) claims as well that FWAs represent for companies an important tool for retaining valuable professionals.
“Is it simply natural to prefer youth and beauty to old age and decline?” (Rubin, 2007, p.4)
Despite the good reasons for promoting FWAs, employers have many negative perceptions towards FAWs, NAO (2004) report being a proof of this. Among them: elderly’s low health condition, disabilities, lack of relevant work experience or low basic skills, low trainability.
To overcome these challenges, HRM needs to act inside a greater governmental strategy, since NAO (2004) demonstrates that engaging aging population in work presumes the conjugated participation of a large number of institutions: Treasury, Inland Revenue, Cabinet Office, Office of the Deputy Prime Minister, Department of Education and Skills, Department for Woks and Pensions, Department for Trade and Industry.
To the negative perception that elders perform less well than their young counterparts, NAO (2004) report supports the real fact that the performances for the above age groups are the same in most of the types of work. More, related to the common assumption that with age, the performance deteriorates, as noted by Agarwal (1998), studies proved that chronological age and performance are generally unrelated (McEvoy and Cascio, 1989 cited in Agarwal, 1998).
When we link the performance with the sector of activity, we might find that older workers are not in disadvantage. According to Self & Zealey (2007), in the last 25 year the structure of economy changed, through a shift from production industries (extracting, constructions, manufacturing), to service industries (banking, insurance, public service jobs, education, health). There is no longer emphasis on the physical strength of the workers, but mainly on soft skills. These soft skills can be easily performed by the older worker force, even after 65.
To the assumption that older people are less/not trainable, that they cannot acquire new skills and competencies, NAO (2004) Report acknowledges the fact that older people need longer time for training, but they are as likely to be trained as younger people are. For improving the trainability of older workers HRM, needs to understand better the context of elders’ learning, especially as there are not many studies regarding this particular issue.
For example, Charness’s studies (1995, cited in Argawal 1998), show that older workers are, indeed, slower in skills acquiring, need longer time to complete the training program. But despite the longer time needed for training, the outcomes of training older people are similar with those obtained by younger workers, when the training program used “self-paced, non-competitive and experiential training methods” (Stern & Doverspike, 1989 in Agarwal 1998, p47).
In conclusion, flexible policies regarding older worker have the quality of respecting everybody’s particular interest: legal requirements of human rights, democratic principle of equity, employers’ and employees’ interests, and present as solutions that match the demands of a dynamic market with the trends manifested by labor force.
Similarly, there are many concerns regarding part-time jobs: if these arrangements can give employees the benefits of creating a portofolio career, with many work experiences, in the same time there is a “dark side”, as Bendaputi (2003) calls it, when the part-time work is associated with lower pay and benefits, underclassing workers. Even if might be seen as unethical, the reality is that part-time employees might not be eligible for leave programs, or medical/life insurance, even retirement and educational plans (Anonymous, 2008), and this means cost savings for companies.
Employers face a new challenge: without a long-term commitment, they find difficult to inspire loyalty, the main pre-requisite necessary when a company is looking for initiatives and continuous effort, according to Stewart (1997 cited in Bendapudi et al., 2003). It seems that own incapacity to inspire loyalty is transferred to employees which are perceived as not being committed to their career,
Managers need to develop new skills for managing and evaluating teams of FWAs workers (Kropf, 1999).
Not dealing correctly with these problems could lead to possible marginalization of the part-time workers (Lawrence and Corwin, 2003), by their full time peers and by their direct managers. As Baruch (2001) indicates, company itself could classify its employees into core employees - the full-timers-, and contract employees, the part-timers.
In Japan the content of work is related to the type of work: regular employees are assigned core tasks, while for “non-regular” employees are reserved routine jobs (JMHLW, 2005c). There is the risk of labeling the part-time job as a second hand type job, and HRM must be aware of this.
In relation to this subject, nearly half of women’s jobs are part time, by comparison with men’s one sixths proportion (Anonymous, 2006). Could we ask ourselves if part-time jobs represent a mean of transferring discrimination from full-time to part time? We have to ask ourselves if really half of women want to work part time or they are not permitted to go to full-time? How should we understand the structure of the work, if 22% of women’s careers are related to secretarial work (a low rewarding job), compared with 5% of men? More, if women are more likely to obtain employment in sales and customer services, men are more likely to be managers and senior officials (Anonymous, 2006). If we compare the average wage of a sales job with a manager job, it seems like a feasible idea that women as part-timers belong to a marginalized work category.
Another sensitive area for HRM is represented by part-timers’ training.
Bendapundi et al. (2003) indicate a possibility that employers provide lees training for the non permanent workers. DeLong et al. (2008) even quote Freedman-Miller’s partners who ask why should they invest in people how will leave anyway. JMHLW Report (2005c) underscores the same tendency of Japan’s employers of avoiding to develop skills of non-regular workers in comparison with their regular colleagues. Bendapundi et al. (2003) consider that part-timers undertraining could lead in time to potential human resource capital stock reduction. This consequence should be analyzed by Governments public policies, as it is affecting a national resource. However, JMHLW Report (2005c), emphasizes that companies should assume the responsibility of training their young employees. The difficulty to find an answer to this controversy indicates that HRM research needs to address more this subject – is employee’s training a personal, an organizational or a national concern?
Trying to embed in their policies solutions for this sensitive problem, HRM adopted the concept of employability, as part of training and development policies..
Employability means that companies train the employees for the skills that help them to find employment. Investing in people’s employability is seen as an offer that balances for the fact that companies no longer promise long-term work contracts. Some authors see this as a convenient situation for employees, as they develop skills that could help them find jobs if the contract with the company ends. But this leads to assumption that the company ‘promises’ not to offer a long-term contract Baruch (2001), I see this, by itself, a declaration towards the desired flexibility even inside the full-time workforce.
Being aware of the above problems implied by FWAs, HRM policies, especially those dealing with training and development, should have a strategically approach. The aging workforce requires constant attention for training and development; the flexible work arrangements suppose finding managerial solutions for coordinating a more fluid workforce. The strategies should take into consideration the related public policies, which influence HRM’s approach. Therefore, strategic HRM becomes a must for any company that wants to thrive economically.
Conclusions
“Focus on creating the right environment for your people and the results will take care of themselves” (Mark Day, 1999, p.5/4)
Do FWAs complicate HRM’s activity? My paper proves: Yes, they do.
But FWAs policies are no longer just trends, or future “might be”s. FWAs are required by the changing business environment, influenced by demographic realities, as aging population, or reduced birth rate, or women/men with family responsibilities entering work-force; by new lifestyle, which asks for a fair balance between work and personal life; by legal requirements of governments, who encourage FWAs in order to have control on social costs of benefits. If FWAs promote equality at work, they enable both employers and employees with possibility to explore new possibilities for better using the available human resources. This process of exploration does not come without difficulties or step-backs. Even if FWAs have to overcome many barriers, ingrained deeply not only in employers’ culture, but as well as society’s, it seems that pursuing their integration in HRM’s strategies of planning and training and development could be a valuable asset, one which might make the difference between a company’s success or failure.
Annex 1
Table 1: Economic activity and inactivity status by sex and age, 2006 (Self & Zealey, 2007, p.43)
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