Do Recessions Transform Work and Employment? Evidence from Ireland

Publication Date01 Jun 2014
AuthorPaul Teague,William K. Roche
Do Recessions Transform Work and
Employment? Evidence from Ireland
William K. Roche and Paul Teague
Two contrasting views tend to dominate the literature on the impact of reces-
sions on employment. One view is that recessions amount to a ‘critical conjunc-
ture’ for work and employment systems, a time when firms try to transform
radically existing employment models. The alternative perspective is that firms,
constrained mostly by the forces of path dependency, seek to adjust to the
immediate or short-term pressures of the recession but otherwise maintain the
established way of organizing the employment relationship. The purpose of this
article is to contribute to this literature by reporting the findings of a major
study of the effects of the recession on work and employment in firms based in
Ireland. The main finding to emerge from the study is that firms mostly have
made improvised adaptations in response to the crisis and have shied away from
far-reaching transformational strategies.
1. Introduction
Charting patterns of change and continuity is an evergreen in the study of
work and employment. But this exercise takes on greater intensity when
economic recessions arrive, largely because adverse business times are usually
considered to be ‘critical junctures’ when established organizational routines,
relationships and mentalities associated with an existing employment model
are most at risk. Assessing the impact of a recession on work and employ-
ment has proven to be complex. Frequently, studies of how a particular
recession affects work and employment reach sharply contrasting conclu-
sions. Some have argued that established employment models are disrupted
by recession, others suggest that firms remain with tried-and-tested employ-
ment practices even in the face of intense market pressures, and still others
put forward the view that a hybridization process is induced that leads to
William K. Roche is at the University College Dublin. Paul Teague is at Queen’s University,
British Journal of Industrial Relations doi: 10.1111/bjir.12006
52:2 June 2014 0007–1080 pp. 261–285
© 2012 John Wiley & Sons Ltd/London School of Economics. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
firms amalgamating old and new employment arrangements (see Thelen
2009). Thus, unravelling the impact of a recession on work and employment
has clearly been a theoretical and methodological puzzle.
Nevertheless, it is important to understand the extent to which firms stay
with or move away from established employment models when business
circumstances get tough as it provides important insights into how firms
behave. Obtaining an accurate account of the impact of recessions on work
and employment requires first a comprehensive and, in our opinion, multi-
dimensional research strategy. We endeavoured to employ this approach to
examine the effects of the current deep recession in Ireland on work and
employment, and the results of this research are reported in this article. The
findings seek to enrich our understanding of the effects of recessions on
change and continuity in employment systems, particularly the extent to
which firms have felt compelled to use the recession to upend existing
employment practices and relationships. The article begins by reviewing the
relevant literature. It then presents an overview of the Irish recession and its
effects on the labour market. The next section details the research strategy
and methods employed to examine in some detail work and employment
arrangements introduced in response to the recession. Research results are
next reported, drawing on a survey of employers, focus groups of human
resource (HR) managers to the fore in formulating firms’ responses and on
case studies of six firms widely regarded as instances of leading-edge, inno-
vative and effective responses to recessionary pressures. A final section sum-
marizes the results and considers their theoretical implications.
2. The effects of recessions on work and employment practices
A fairly large literature exists on the effects of recessions on work and
employment. A striking feature of these studies is how the same recession can
be interpreted quite differently. Consider commentary on the 1980s US reces-
sion. One view, articulated by Cappelli, argued that a new ‘market-driven’
employment model was fired in the cauldron of this business downturn. This
was seen as including the end of ‘career jobs’, an overall decline in job security
and job tenure and a move towards more precarious forms of employment
and working conditions (Cappelli 1999a,b; Cappelli et al. 1997). But this
assessment was strongly criticized by others who suggested instead that while
firms had shifted the burden of risk to their employees to a significantly
greater degree, the majority of employees continued to hold career-type jobs
that offered fringe benefits, training and good prospects (Jacoby 1997,
1999a,b). In other words, employers were by and large sticking with tried-
and-tested employment practices. A similar divergence of opinion occurred
in assessments of the effects of the UK recession of the 1980s and early 1990s
(Gallie et al. 1996; McGovern et al. 2007; Rubery and Wilkinson 1994).
Problems of interpretations have again emerged in relation to the impact of
the current recession on employment and the management of people. It is
262 British Journal of Industrial Relations
© 2012 John Wiley & Sons Ltd/London School of Economics.

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