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Impact of recession 2008 0 Impact of recession 2008 Emergence of Labour flexibility model

Impact of recession 2008 1 EXECUTIVE SUMMARY The article reflects the impact of recession 2008 and the response of the employer towards recession. It provides the in depth study of the auto parts manufactures the response of the firm towards recession. This study highlights the alterations made in the labour flexibility strategy to pilot recession and thus deploying the combination of functional, numerical and working time flexibility to protect the core workers of the organization and thus reducing the cost to meet the fluctuating demands of the market. The firm focuses on applying more of numerical flexibility to create the stable agency employment and provides rationalisation of products.

Impact of recession 2008 2 Contents EXECUTIVE SUMMARY .............................................................................................. 1 INTRODUCTION .......................................................................................................... 3 The response of British employees in the direction of the recession: ...................... 3 CORE FINDINGS ......................................................................................................... 4 Strengths of the study ................................................................................................... 6 Limitations of the study ................................................................................................. 7 RESEARCH METHODOLOGY .................................................................................... 8 Numerical Flexibility .................................................................................................. 9 Functional flexibility ................................................................................................. 10 Working time flexibility ............................................................................................. 10 Relevance of labour flexibility beyond UK .................................................................. 11 CONCLUSION ............................................................................................................ 11 RECOMMENDATIONS ............................................................................................... 12 REFERENCES ........................................................................................................... 13

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Impact of recession 2008 3 INTRODUCTION The great recession of 2008 was considered as the most major economic shock. It begins in US and stretches rapidly to the Europe. Emergence of such recession forces the business to reconsider their business operations to ensure the survival and preserve its competitive edge over others. It leads the business to seize action by downsizing the employees or by altering the employment practices. It can be achieved by adjusting the size of the labour force or firms can alleviate the job losses by adopting the alternative strategies to guard the employment by doing accountable restructuring or employment stabilisation. The firm can also adopt the process of securing the core workers by maintaining the bulk of temporary workforce who can be removed at the time of economic crises. Firms can also transform the employment practices which include deteriorating the opportunity of promotion, freezing the bonus and wages, dropping overtime and decreasing the expenditure incurred on providing training to the employee (Datta, and Basuil, 2015). Recession leads to dissemination of high declaration approaches and investments in long term for the development of human resource and employee commitment. It may lead to the transmission of a new employment agreement by rising the use of reliant labour, which creates turn down in job security, and development of unstable employment (Ahlstrand, 2015). The response of British employees in the direction of the recession: Prior to recession the employees offer lower interest rates and a grip on the real pay, which helps the employers in thrashing recession, employers deliberately avoids

Impact of recession 2008 4 downsizing and hoarding labour and through improved balance sheet employers were able to maintain the workforce rather than fetching in short period cost cutting. The employers adopted the alternative flexible actions for responding towards the economic crisis. The firms have used the labour flexibility model to steer recession. It has been divided into three forms i.e. functional, numerical and working time flexibility. Which helps the firm to face the turbulence occurs during the recession in the best possible manner (Goyer, Clark, and Bhankaraully,2016). CORE FINDINGS In this case study the flexibility model is underlined which proposes that labour flexibility can be attained by dividing the workforce under two categories i.e. ‘core’ and ‘peripheral’ workforce. Central employees are the one which comprises of definite skills and are viewed as possessions to the company these workers are multi-skilled and supple in completing out the task. The firm make efforts to retain such workforce. On the other hand the peripheral workers are those having the general skills and have limited job security. In cases of crises these employees can be rearranged according to the demand. In this article the response of employer is critically evaluated through a case study of auto parts manufacturers. Prior to recession the auto parts manufacturers business has expanded well and able to maintain its competitive edge in the market. It deals in two businesses firstly; they make new build components which are supplied to the original manufacturers of equipment. And secondly they produce aftermarket components which are replacements components replaced during the life of the product. The demand of the aftermarket products in perceived to be steady and less sensitive. It was scrutinized that during summer 2008, moderation in demand was reported and by autumn the

Impact of recession 2008 5 uncertainty increased and there was credit crunch in the financial market which upsurges the threat of the downturn. It was witnessed that by October 2008 the request for the new build mechanisms disappeared unexpectedly and the claim for the aftermarket portions become extra buoyant and provided certain level of softening during the recession as these products are patented and are installed at the time of service of the trucks. By the end of 2008, it was evaluated that manufacture output had dropped by 50% and the request for new build goods has vanished while demand for aftermarket product does not come to complete pause. After the recession of 2008 the firm declares to eliminate the agency workforce because one third of the staff was hired by outside staff agency. It was alleged that managing such workforce would help to meet the demand in peak seasons and can be removed during recession. It also lessens the amount of shifts from three to one so as the workforce work for a average week and eradicates the overtime opportunities provided to employees to reduce the cost. The new build employees were reorganized to assist in aftermarket production. The firm also announces to cut pay and employs short time period working for the high-ranking leaders. Following enormously harsh interchange circumstances during autumn and winter 2008/09, by spring 2009 some primary symbols of repossession were stated in new build. It is observed by an unexpected flow for portions in aftermarket business. The effect of recession at auto parts was labelled as shallow and fast through a substantial drop in the demand during 2008 and 2009. Aftermarket was demonstrated extra strong and suppressed the setback at the height of the recession, while retrieval in new build was steadier. By 2011 circumstances in both

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Impact of recession 2008 6 the business streams has enhanced. Therefore it was perceived that flexibility strategy is considered successful as it permitted the business to enlarge and diminish moderately easy in proportion to the fluctuating market situations and to safeguard the employment of the core staff (Ahlstrand, 2015). After economic crisis, several changes were made in context to staffing guidelines, workforce configuration and labour operation. It was observe that proceeding to recession recruiting the employees was merely a prime concern for the line manager to choose locally based upon the requirement of manufacturer but after recession procurement of the extra staff is a more difficult process demanding new paperwork and approval of various administration. It was observed a noticeable change in the structure of the creation of workforce. Preceding to recession the staff was categorised as permanent staff and the bulk of temporary workforce but after recession there was an surge in the employment of agency labours across the production floor. Prior to recession there was a dominant model in which the agency staffs generally had a steady and consistent employment and after recession the emergence of flexible model leads to switching of the labour with nominal notice. It provides employees on daily basis or even on hourly basis according to the requirements to the firm. Strengths of the study This article provides the unusual visions about how the organization deeply affected from economic crisis piloted the recession. The case study delivered in this article helps to scrutinise why and how the labour flexibility gets pragmatic and how they are pooled and observed by actors. It allows the exploration of how the crisis extended in the following years throughout both recovery and crisis. It delivers

Impact of recession 2008 7 valued insights into the legacy of the recession. It comprises the perception of the workers, which is considerably required in HRM investigation. The study emphasizes on the employment practices in challenging times and a broader view on employment flexibility and the influence on economic sets. The flexible strategy permits the firm to streamline production, decrease slack and accomplish highest and trough in the demand. This framework allows segmenting the workforce into diverse groups with dissimilar employee arrangements based upon intensification and prospective of employees (Datta, and Basuil ,2015). This qualitative case study design was believed to be the most suitable in understanding the changing aspects of flexible strategies at the initiative level and it assist a more rounded reflection of the adopted practices and policies that can be attained by trusting upon authority declarations ( Datta and Basuil ,2015). Limitations of the study The author highlights that this article does not provide deep vision of the consequences and legacy of the recession on employment performance and working of the firm. As the authentication of the case study was restricted it suggests the harsher certainty of reformation, job cutting and obligation of new harder HRM techniques. The understanding of impact of recession on short and long term remains limited. This case study focuses on discovering the labour flexibility prototype supported by the company and was considered as to be essential to manage the difficult times. It does not focus broadly on impact of recession on employee relations strategies (Gall, 2017). The flexible firm model is criticised because the general nature of the prototype does not reflects key circumstantial factors such as work of organization, policy of

Impact of recession 2008 8 management and the techniques of production. This article reveals that there are various developments in case of manufacturing processes such as alteration towards lean manufacture which targets to reduce inventory, stock. This method leaves the industrialists very unprotected to the variations in request and it needs flexible labour to meet such demand. The technique of the research of measureable labour market offers limited and initial understandings into the full aftermath of the recession. The lack of business ethics was observed in the case as the organization was reducing the agency staff within the minimal notice leading to dissatisfaction among the temporary staff and thus cutting pay offs and extra benefits provided to the employees is not ethically correct. It hampers the growth of the organization because of the creation of dissatisfaction among the workers. RESEARCH METHODOLOGY The study involves both the qualitative and quantitative data with a broader focus on the primary data. In this article focused sampling was employed with realistic focus on Auto parts as the effect of recession on manufacturers of auto parts was impulsive and deep. The study comprises several site calls, conferences and formal discussions were piloted with an emphasis on shop floor production provisions. The study delivers vision from 18 in-depth interviews to acquire the viewpoints of diverse performers and applicants, which includes senior and line managers, worker representatives and front line manufacture employees, supervisors, production operators and the followers of in house staff council. The duration of interview ranges

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Impact of recession 2008 9 from one to two hours. All the interviews were verified and recorded to assist the investigation and successively roundabout using categories that directed the strategy of the meeting prototype. Questions in the interview emphases on the nature of employment performance and labour flexible strategies involved during the crises and the way it has evolved recession. It also admissions the internal booklets including policy documents, presentation slides which help in contextualisation and triangulation of interview findings ( Ahlstrand, 2015).

Impact of recession 2008 10 Its main concentration was to acquire the wealthier perceptions of how practices were employed and how they grow. It comprises a grade of logical simplification. The theory used to navigate recession was the labour flexibility strategies. This strategy was adopted by the firm to secure the core workers of the organisation and meet the fluctuations in demand. This theory is best suitable for the industries which are highly volatile. Theory Used During Recession NUMERICAL FLEXIBILITY FUNCTIONAL FLEXIBILITY WORKING TIME FLEXIBIITY

Impact of recession 2008 11 Numerical Flexibility It indicates flexibility in the number of employees. Prior to recession it allows the firm to reduce the agency workers in quiet months and flex up during the peak times. Throughout recession, the agency workers were removed from the business to protect the core workers and when the recovery time started the agency, workers were added to the business, which continues until the post-recession. At that time there was increase in the use of agency labours and redevelopment of bulk of stable workers. Functional flexibility It refers to redefining the roles of the workers in the organization. Prior to recession it was observed that there was united functional flexibility and the workers work in the assigned production area. During recession some permanent workers were redeployed from the new build to the aftermarket because there was decline in the demand of new build products. After recession it again shifted to limited functional flexibility and the workers work in the same role assigned to them. Working time flexibility It was analysed that prior to recession overtime was allotted to the workers during peak season and during recession the shifts were reduced from 3 to 1 and there was standard working week to reduce the cost. Short time working was only allowed to the leadership team. After recession overtime was offered to all the workers at peak season and there was also increase in the number of shifts. Therefore the concerns of adopting such prototype was that it permitted provisional alterations to be made without the stability and pain of rationalising and it remained perceived to be most appropriate for the unstable automotive market. The

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Impact of recession 2008 12 prominence of the numerical flexibility was that when the corporate experience breakdown in demand it can lessen the agency staff without any stress and thus protecting the core employees. This theory exposes how the recession is piloted by business by arranging a combination of functional, numerical and working time flexibility ( Goyer , Clark, and Bhankaraully,2016). Relevance of labour flexibility beyond UK It was analysed that the impact of recession spread quite fast to the international organizations which forces the firm to make the relevant labour flexible strategies so that the international firms are able to maintain its competitive edge and does not get much affected by the fluctuating demands. As analysed from the above paragraphs the firms must use the functional, numerical and working time flexibility strategies to navigate recession and protect the core workers by reducing the agency staff as per the requirements of the firm. Labour flexible strategies allow the firm to reorganize the permanent workers to the other areas when the demand is low and thus saving the cost. It provides safeguard to the core workers by not reducing them at the time of crisis and thus ensuring overall satisfaction of the workers. CONCLUSION From the above discussed paragraphs it is concluded that the employers has used various alternative strategies to mitigate redundancies. This article provides an in depth case study which critically focuses on the strategies adopted by the auto parts firm to pilot the recession and thus able to balance the fluctuating demands. The organization focuses on numerical flexibility to reduce the agency staff at the time of crisis and protecting the core workers. It also adopts working time flexibility strategy

Impact of recession 2008 13 by reducing the shift from 3 to 1 and banning the overtime facility during recession so as to reduce the cost and thus avoiding redundancies of the core workers. The organization redeploys the role of the permanent employees from new build market to the aftermarket when the demand was low in the new build market. This study also discloses the modification done in the staffing practices after recession to advance the operational efficiency of the organization. Adoption of the labour flexibility strategies helps the organization in rationalisation of the product and thus removing slack .It is examine that after recession there was dispersion of more powerful operation of extra market directed employment agreements and a lessening the central of workers on standard employment agreements. RECOMMENDATIONS After critical evaluation of the article the major recommendations suggested are: There should be detailed description of the working of the organization, strategy of the management and the techniques used in production to get a deep insight about the contextual factors and helps in better understanding about working of the organization. The inclusion of quantitative data should me more because it shows more authenticity of the data and provides more clarity towards the response of the employer towards recession. The article must emphasize the impact of recession on employee relations it must specify the response of employees towards the action taken by the firm to reduce redundancies, So as to make the labour flexibility strategies accordingly.

Impact of recession 2008 14 There should be appropriate stating of the legacy of the recession on the employment performance to get a deep insight of the impact of recession.

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Impact of recession 2008 15 REFERENCES Ahlstrand, R. (2015) Integrative strategy, competitiveness and employment: A case study of the transition at the Swedish truck manufacturing company Scania during the economic downturn in 2008-2010. Economic and industrial democracy , 36(3),pp.457-477. Appelbaum,E.,Batt,R., and Clark,I.(2013) implications for employment relations research : Evidence from breach of trust and implicit contracts in private equity buy- outs. British journal of industrial relations, 51(3),pp.498-518. Cascio, W.F. (2010) Downsizing and redundancy.The sage handbook of human resource management. London:sage. Cook, H., Mackenzie, R., and Forde,C.(2016)HRM and performance : The vulnerability of soft HRM practices during recession and retrenchment. Human resource management journal, 26(4),pp . 557-571. Cooper,C., Quick,J., and Pandey, A.(2012) Downsizing: Is less still more?. Cambridge: Cambridge university press. Coulter, S. (2016)The UK labour market and the great recession. In:Myant M , theodopoulou S and Piasna A Unemployment, internal devaluation and labour market deregulation in Europe. Brussels: European trade union institute, pp.197-221. Datta, D.K., and Basuil, D.A(2015) Does employee downsizing really work? In: Andresen M and Nowak C Human resource management practices . Dordrecht: springer.

Impact of recession 2008 16 Dencker,J.C.(2012) Why do firms lay off and why? Industrial relations, 51(1),pp.152- 169. Gall, G. (2017) Employment relations in financial services. London: Palgrave Macmillan. Goyer,M., Clark,I.,and Bhankaraully,S.(2016) Necessary and sufficient factors in employee downsizing? A qualitative comparative analysis of lay-offs in france and the UK, 2008-2013. Human resource management journal , 26(3),pp.252-268. Gunnigle,P., Lavelle,J., and Monaghan,S.(2013) Weathering the storm? Multinational companies and human resource management through the global financial crisis. International journal of manpower, 34(3),pp.214-231. Hakansson, K., Isidorsson, T., and Kantelius,H.(2013) Stable flexibility: Long term strategic use of temporary agency workers in Sweden. International journal of action research ,9(3),pp.278-300. Holst, H., Nachtwey,O., and Dorre,K.(2010) The strategic use of temporary work. International journal of action research9(3),pp.278-300. Johnstone,S.(2018) Downsizing. In:Wilkinson A, Bacon N, Lepak D and Snell S Sage handbook of human resource management. 2 nd ed.London:Sage. Johnstone,S., and Wilkinson,A.(2017) The potential of labour management partnership: A longitudinal case analysis . British journal of management.DOI:10.1111/1467-8551.12240 Teague,P., and Roche, W.K. (2014) Recessionary bundles: HR practices in the Irish economic crisis. Human resource management journal , 24(2), pp.176-192.

Impact of recession 2008 17 Thompson, P. (2011) The trouble with HRM. Human resource management journal, 21(4), pp.355-367. Van wanrooy,B.V., Bewley,H., and Bryson,A.(2013) Employment relations in the shadow of recession. Basingstoke: Palgrave Macmillan. Yin, R.K. (2013) Case study research: Design and methods. London: Sage. Zagelmeyer,S., and Gollan, P.J. (2012) Exploring terra incognita: preliminary reflections on the impact of the global financial crisis upon human resource management. The international journal of human resource management , 23(16), pp.3287-3294.

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