Unique Party has witnessed many changes in the overall HR recruitment policies and business strategy. The production operation has quickly increased in size significantly. Significantly enough to represent issues recruiting adequate numbers of personnel at short notice. These contingent workers include agency workers, part-time workers, and temporary contract workers. The business has seen a shift from agency workers to in-house temporary contingent workers, primarily to reduce costs as agency workers are subject to higher premiums of pay.
The organisation must also retain this ultimate flexibility as it seeks to out-source more and more work to the Far East, where considerable cost savings can be achieved to provide more competitive margins. Workers recruited from agencies can be flexed up and down at relatively minimal notice, however the price to pay for this flexibility is the premium rate charged by the employment agency. In the UK the temporary worker is technically employed by the recruitment agency whilst working on site for the client, who pays the bills.
Anthony, W. et al (1996) state that the agency is responsible for paying the temporary worker plus paying employers national insurance to the government and setting aside holiday pay (working time directive or WTR regulations). This total cost then has a profit margin added and is charged per hour to the client. The HR policy, driven by the global business strategy is to recruit in-house temporary employed contingent workers with a 'zero hours' clause built into their contracts of employment.
This stipulates that the workers contract may be cancelled without lieu of notice, with no financial impediments. This is an entirely legal process, however a selection process similar to that used during redundancy situations must be used, i. e. it must be criteria based, not merely a 'last in, first out' scenario. The in-house temporary contingent workers are not subject to the premium rates charged by the employment agencies, and are typically based on current minimum wage rates, thus saving twenty five to thirty percent on the weekly payroll costs.
Further strategic plans will be necessary for the organisations HR role, as the Temporary and Agency Workers bill is brought into affect this year. This bill aims to provide equal treatment for temporary and agency workers, whereby they will be eligible to the same rights as long-term and directly employed staff in key areas, including basic wages, sick pay and holiday pay. Unions claim it would prevent unscrupulous employers exploiting workers and undercutting the pay and conditions of their permanent employees.
Tom Hadley, external relations manager at the Recruitment and Employment Confederation speaking in the Personneltoday. com (2008) publication, contends that in its current form, the Bill would damage the UK economy and British business, and reduce the opportunities for temporary labour. The Bill would add substantial bureaucracy and ultimately enormous additional costs to the employers and agencies. This additional cost would represent a key driver to the HR departments forward recruitment plans, as the additional costs would directly impact on the business margin.
The flexibility provided by the temporary and agency contingent workers is characteristic of the theory published by Atkinson, J. (1984), (Figure5) who contends that employers are increasingly segmenting their workers between a permanent `core' of full-time employees, and a `periphery' of part-time, temporary, subcontract and `outsourced' workers. The `core' provides `functional flexibility' through lowered job demarcations and multi-skilling, while the `periphery' provides `numerical flexibility'. i. e.
being able to flex the workforce up and down with minimal financial risks or infringements of employment law. Figure 5 Armstrong, M. (1998) suggests there are four reasons for organisations to implement such flexibility. They are: The need to achieve a competitive edge, the need to be adaptive, the impact of new technology, and the impact of new organisational structures. In the case of Unique Party, both the need to be adaptive and be competitive is paramount to the future success of the organisation. Emeraldinsight.
com (2008) defines the flexible firm as one which embodies non-standard employment contracts for the majority of its workers, or primary flexibility. ('Primary' because flexibility is built into the job contract rather than superimposed). Non-standard employment contracts have been 'lumped' together with other flexible working practices, (e. g. overtime or shift work), under the umbrella of 'flexibility' or the concept of the 'flexible firm', which may employ one or a number of labour supply adjustment mechanisms (temporary or agency workers) in response to product market demand volatility.
The peripheral workers provide a 'buffer' that protects core workers from external market pressures. When faced in a dip in demand for its product, the firm will cut peripheral jobs while retaining core workers, as contended by Beardwell et al. (2004). The flexible firm model offers a starting point for examining flexibility in the workplace and provides evidence that organisations can offer flexible working arrangements to their core employees while still meeting production strategies.