The workforce adjustment strategies used by workplaces in Britain during the Great Recession

Pages114-126
DOIhttps://doi.org/10.1108/EBHRM-06-2018-0038
Date05 August 2019
Published date05 August 2019
AuthorJohn Sutherland
Subject MatterHR & organizational behaviour,Global HRM
The workforce adjustment
strategies used by workplaces
in Britain during the
Great Recession
John Sutherland
Department of Work, Employment and Organisation,
University of Strathclyde, Glasgow, UK
Abstract
Purpose The purpose of this paper is to provide a human resource management perspective of the
workforce adjustment strategies implemented at workplaces in Britain in response to the Great Recession.
Design/methodology/approach The analysis uses an ordered probit and a series of binomial probits to
examine a micro data set from the 2011 Workplace Employment Relations Study.
Findings Not all workplaces were affected equally by the recession. Not all workplaces chose to implement
workforce adjustment strategies consequential of the recession, although the probability of a workplace
taking no action decreased the greater the adverse effect of the recession on the workplace. Most workplaces
used a combination of workforce adjustment strategies. Workplaces implemented strategies more compatible
with labour hoarding than labour shedding, i.e., cutting/freezing wages and halting recruitment to fill vacant
posts rather than making employees redundant.
Research limitations/implications What was examined was the incidence of the workforce adjustment
strategies, not the number of employees affected by the implementation of a strategy. Further, what was
examined were outcomes. What is not known are the processes by which these outcomes were arrived at.
Originality/value This paper concurs with the findings of previous economic studies that workplaces
hoarded labour, cut hours and lowered pay. In so doing, however, it provides a more detailed and more
informed human resource management perspective of these adjustment strategies.
Keywords Labour hoarding, Work-sharing, Labour-shedding, Workplace Employee Relations Survey
Paper type Research paper
1. Introduction
What has come to be referred to as the Great Recessionhad its origins in 2007 in the
subprime mortgage crisis in the USA. Soon, that financial crisis was to spread throughout
the international financial system. In time, its consequences affected the real economy.
Across the member nations of the OECD, the recession was characterised by a decrease in
GDP unprecedented in recent history (van Ours, 2015). In the UK, it caused the most
substantial shock to the economy since the Great Depression. Over six quarters, GDP fell
six per cent. In the context of the traditional indicators of labour market performance,
there was a decrease in the employment rate and an increase in the unemployment rate.
There was also an increase in the level of economic inactivity. Further, the recession
proved to be longer and deeper than the recessions of the 1980s and 1990s. Nonetheless,
over the period of the recession, the loss of employment proved to be rather benign
(Gregg and Wadsworth, 2011, p. 11). If at the expense of labour productivity (Office for
National Statistics, 2017), in response to the recession, firms hoarded labour, cut hours
and lowered pay(Bell and Blanchflower, 2010, p. R3).
Evidence of these three strategies of labour hoarding, cutting hours and reducing pay
was deduced by Bell and Blanchflower from macro data, from published economic statistics.
The principal contribution made by this paper is a direct investigation of these workforce
adjustment strategies and others using micro data that have their origins in the
Evidence-based HRM: a Global
Forum for Empirical Scholarship
Vol. 7 No. 2, 2019
pp. 114-126
© Emerald PublishingLimited
2049-3983
DOI 10.1108/EBHRM-06-2018-0038
Received 18 June 2018
Revised 29 July 2018
Accepted 2 August 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2049-3983.htm
114
EBHRM
7,2

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