Labour flexibility in Greek SMEs
| Pages | 549-560 |
| DOI | https://doi.org/10.1108/00483480410550152 |
| Date | 01 October 2004 |
| Published date | 01 October 2004 |
| Author | Dimitrios M. Mihail |
| Subject Matter | HR & organizational behaviour |
Labour flexibility in Greek SMEs
Dimitrios M. Mihail
Department of Business Administration, University of Macedonia,
Thessaloniki, Greece
Keywords Flexibility, Human resource management, Greece, Industrial relations
Abstract The issue of labour flexibility has sparked controversy in Greece. This empirical study
sheds light on workplace flexibility in small and medium-sized enterprises (SMEs) that employ the
vast majority of workers in Greece. The study tries to assess the extent to which Greek SMEs resort
to external and internal labour flexibility arrangements to cope with increasing competition and the
way they react to recent flexibility-oriented legislation. The survey is based on case studies and
draws heavily on face-to-face interviews with 16 small proprietors. It is found that SMEs make little
use of external flexibility. Rather they rely on internal flexibility, which stems from extensive Webs
of informal employee relations. However, the nature of “informality” varies in small enterprises
leading them to adopt different modes of absorbing institutional change.
Over the course of the last decade, the European workplace has undergone substantial
transformation spurred on from the need to adopt new technologies an d focus on
product quality and market responsiveness. Hence, labour market adjustment and
employment issues are at the top of the European social policy agenda. Employment is
now written into the Amsterdam Treaty, in the employment and social policy chapter.
It commits the Member States to take coordinated action on promoting policies for the
creation of employment. The resulted European employment strategy is based on a
four-pillar structure: employability, entrepreneurship, adaptability, and equal
opportunities to provide consistency and continuity of policy.
Especially through entrepreneurship and adaptability an emphasis is placed on
individual motivation, new ideas and risk taking, which render small flexible
enterprises crucial to employment and sustainable growth. In fact, European
Commission adopting 1999 Employment Guidelines invites the social partners to
achieve new flexible working arrangements by striking a balance between workplace
flexibility and security. At the same time Commission proposes to the Member States
to reduce and simplify the administrative and other burdens on small and
medium-sized enterprises (SMEs) and incorporate in their law more flexible types of
employment contract (European Commission, 1998, pp. 4-6). In the same vein, the
Union of Industrial and Employers’ Confederation of Europe (UNICE) calls national
policy regimes in the EU members to shift to the entrepreneurial economy and support
its core, namely small businesses, by relaxing labour market regulations and
reinstating incentives (Council of the European Union, 2000, pp. 10-15).
Facing this adjustment challenge, Greek government took legislative initiatives.
Both Law 2639, passed in 1998, and Law 2874, passed in 2000, are recent institutional
reforms aiming at promoting workplace flexibility. This new legislation, completing
and updating cornerstone Law 1892 of 1990 (Daskalakis, 1995, pp. 41-46), provides a
comprehensive statutory framework regulating contractual and temporal flexibility.
Policy makers’ main intention is to boost new hirings by enhancing contractual
flexibility at the expense of some aspects of internal flexibility such as costly new
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Labour
flexibility in
Greek SMEs
549
Received August 2003
Accepted September 2003
Personnel Review
Vol. 33 No. 5, 2004
pp. 549-560
qEmerald Group Publishing Limited
0048-3486
DOI 10.1108/00483480410550152
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