the changing nature of work




Now that you have watched the mini lecture, you can learn more in the Essential reading for this topic.


the changing nature of workPilbeam, S. and M. Corbridge People resourcing and talent planning: HRM in practice. (Harlow: Pearson, 2010) 4th edition. Chapter 1 People resourcing: the changing world of work and contemporary human resource management.

You’ll notice that you read Chapter 1 of Pilbeam and Corbridge back in Topic 1, but it’s worth revisiting the section on changes in the world of work again as we look at this in more depth in this topic.

Remember that all the Essential reading for this programme is provided for you. Click ‘next’ to go to the next page and start reading.

Stephen Pilbeam and Marjorie Corbridge, People resourcing and talent planning: HRM in practice (Pearson, 2010; 4th edition)


The competitive environment is a major driver of change in the world of work:

The pressures on organisations to add value, achieve sustained competitive advantage, and respond and adapt quickly and flexibly to new challenges and opportunities are relentless. The responses to these pressures have taken many forms, including new types of organisation, lean, delayered, flexible, process- or project-based, increasing reliance on information technology, and an emphasis on continuous improvement in terms of performance, quality and customer service. The quality of the human or intellectual capital possessed by organisations is seen generally as the key factor in differentiating them from their rivals and achieving superior results. The focus is on the development of business strategies to achieve longer-term goals, and the part played by human resource strategies in general, and reward strategies in particular, in supporting their achievement is now well recognised.

Clearly some organisations can survive on fairly traditional hierarchical structures to deliver standardised ranges of products and service, but increasingly customer orientation, product differentiation and service support require new forms of organisation. This is requiring no more than ‘horses for courses’ but it does draw attention to the fact that there is no guarantee that today’s organisations will exist indefinitely in their present form, or indeed exist at all. Therefore, there is a case for organisational strategists to recognise drivers for change and for managers to diagnose and be able to act upon the implications of these drivers, because organisational survival may depend on it. This impacts on approaches to managing people and the demands made on people managers, whether they are line managers or HR professionals. It is the context within which people are managed that is changing and HR managers have had to reposition themselves ‘in the ever-changing environment of global competition, new technology, and new methods of working and organising work’ (Armstrong, 2000). Private sector mantras are sustainable competitive advantage, added value, core competencies and strategic capability, while in the public sector the driving force has been ‘best value’ and from 2010 cuts in public spending.

Organisational fluidity and transience, the ‘here today gone tomorrow’ perspective, has impacted on employees’ feelings of job security. While it may still be statistically possible to demonstrate that in many cases jobs are relatively secure, the expression of organisational and environmental uncertainty, together with the managerially projected imperative of adaptation and change, together with the global recession of 2009, have impacted upon employee perceptions of job permanence. It has also impacted upon the mutuality of obligation between employer and employee with regard to traditional career patterns. The end of the job for life may have been subject to hyperbole, but career patterns are different and twenty-first-century workers may need to engage in continuous development and the refurbishing of skills in order to maintain employability. This tends to promote a loyalty to self rather than intensifying loyalty to the organisation. Worker loyalty may therefore have to be purchased by the employer through the currency of self-development opportunities. Promoting self-development is not just about offering training courses but encompasses lateral career moves, development appraisal and employer responsiveness to worker employability needs. These ideas have links to the concept of the ‘war for talent’ where employers compete with each other to recruit and retain valuable employees. This competition involves offering not only appropriate financial rewards but also non-financial rewards. Armstrong and Brown (2001) contend that managers should not underestimate the significance of pay as a means of attracting, retaining and providing tangible rewards to people, because it is essential to get this right since much damage can be done if it is wrong. But as a means of generating long-term commitment and motivation they argue that pay has to be regarded as only part of a whole and that ‘it is the non-financial rewards that will ultimately make the difference’. For Armstrong and Brown non-financial rewards include ‘recognition, scope to achieve and exercise responsibility, opportunities for growth and development, the intrinsic motivation provided by the work itself and the quality of working life provided by the organisation’. These ideas are explored further in the reward chapters.

This refocusing of the employeremployee relationship can create the transactional psychological contract, replacing a relational psychological contract, whereby both parties sustain the employment relationship all the time there is ‘something in it for them’; it is self-centred rather than familial.

Although phrases like ‘the customer is king’ and ‘delighting our customers’ can be accused of being trite, there is little doubt that, among other things, organisations have had to become more customer-focused in order to survive and prosper in competitive environments. Excellence in customer service has always been a differentiating factor, but perhaps what is different now is that customers have had their expectations fuelled and are encouraged to feel empowered to demand quality products and good service. Customers are also more inclined to exercise their power through either the withdrawal of custom or the pursuit of compensation or restitution. Philpott (2001) sums up this customer power: ‘intense competition in global and domestic markets forces businesses to keep labour costs in check and/or raise their game in terms of product quality, because empowered consumers want ever-better goods at ever-lower prices.’ This rise in customer aspirations is not only a private sector phenomenon, because citizen consumers of public services have also been encouraged, principally through public policy, to perceive themselves as fully fledged customers. It is not for this section to debate the legitimacy of the customer-driven organisation, nor to say how it should be achieved, but merely to draw attention to an issue which has implications for the world of work. Customer aspirations and power are influencing the way organisations are structured and managed and have significant implications for workers who have to contend with the increased emphasis on satisfying customer needs through being more responsive and more flexible, and providing emotional labour ‘the management of emotions and provision of behavioural displays associated with feelings in interactions with customers/clients’ (Legge, 2005). Managers need to be aware that emotional labour can lead either to worker alienation, caused by perceived employee inequality in


Relation to the customer and the managerial imposition of rules on how employees are allowed to feel (Korczynski, 2002), or it can be a major source of job satisfaction where employees have some autonomy in the expression of emotional labour and have socially embedded relationships with customers, for example in the caring services.

The war for talent and the new paternalism

Where shortage labour markets exist they confer power to workers, as sellers of their labour, and enable a greater degree of choice to be exercised over whom to work for and on what terms. This is one element of the war for talent employers having to compete with each other to secure their human resource needs. The war for talent goes beyond this, as the name suggests, and it is argued that in order to survive in competitive product and service markets employers need to attract and retain the most talented workers, even in difficult macroeconomic conditions. It is through securing the expertise, creativity and innovation of talented people that the organisation will prosper. In service-based and knowledge economies employees are not only the major operating cost but also the source of competitive advantage. Studies by Goleman in the USA, reported by Brown (2001), found that in low-skill work the highest-performing workers contributed twice to three times as much as average workers, while in professional jobs top performers were capable of adding ten times as much value as their co-workers. Kets de Vries, in summing up the competition for talent (Williams, 2000), created an interesting metaphor: ‘Today’s high performers are like frogs in a wheelbarrow, they can jump out at any time.’ The implication is that organisations need to prevent talented employees from escaping. To extend the metaphor, this does not mean putting a lid on the wheelbarrow, it means making the wheelbarrow a sufficiently attractive place to stay. This attractiveness cannot be defined in any generic way because this rather depends on what the frogs want. Williams argues that the answer resides in talent management processes which go beyond ensuring that financial rewards are market competitive and encompasses the whole range of non-financial and environmental rewards. The work environment, depending on the type of work, might include opportunities to exercise discretion, to engage in innovative work, to have opportunities for self-development, to work with interesting people and to be able to share in success in the broadest sense.  The role of managers in talent management is to exercise empowering leadership and deploy competencies related to coaching, mentoring and feedback.

In the war for talent the aim of the organisation is to become the employer of choice and seek to project the employer brand to the labour market. Employer branding aims to differentiate the organisation’s characteristics as an employer from its competitors in the labour market through highlighting and marketing the unique aspects of the employment package, known as ‘the value proposition’ the value/total rewards offered to employees in return for joining and staying with the organisation, and producing high work performance. Some employers seem to be going to extraordinary lengths to retain people and this can be termed the ‘new paternalism’. Examples of this include schemes for accumulating supermarket-style reward points, leisure zones at the office, ‘duvet days’ and concierge services. Concierge services might involve collecting dry cleaning, renewing road tax and buying birthday cards and presents (Cooper, 2000b). Chaudhuri (2000) quotes a new economy organisation as saying:

However, the underlying principle in shortage labour markets is that employers need to offer an attractive financial and non-financial rewards package, which incorporates personal choice and flexibility, if they are to compete effectively in the labour market and secure and retain the services of talented people.If you want to keep staff then you have to look after them. That is why we try and create a campus atmosphere at our office. We have top quality gourmet food available and in the evenings we run cookery classes. You also get Waitrose Direct, a grocery shopping service who wants to waste their spare time by pushing a supermarket trolley?

Economic recession a war on talent management strategies?

This resulted in both negative and positive effects on talent management activity. So, was it a war on talent management strategies? Changes made to reward strategies included restricted pay increases, or in some cases pay reductions, an increased focus on rewarding top performers only and further interest in individual performance-related pay. The economic conditions also placed pressure on employer branding initiatives, as return on investment in talent management strategies came under closer scrutiny. However, some organisations continued to see talent management as a key survival strategy to differentiate them from competitors and to position the organisation to benefit from an economic upturn. In these cases the economic circumstances sharpened the priorities in relation to:

  • developing in-house talent through using the internal labour market;
  • focusing on essential development related to business needs;
  • seizing opportunities provided by the labour market to recruit key talent; and
  • increasing the focus on employee retention,

whilst subjecting cost-effectiveness to greater scrutiny. There is no escape from contingency in talent planning, even in a recession. Surplus labour markets confer power on employers, and whilst the war for talent may pause during a recession, at some stage it is likely that ‘employers will be faced with skill shortages, an ageing UK population and limits on immigration’ (Taylor, 2009) and the power balance may change again.

Finding and retaining talent is tough and is going to get tougher. While a global economic slowdown, with its attendant lay-off, may provide temporary respite in some industries, falling birth-rates, an increasingly demanding workforce and greater competition for talent from emerging-market firms will continue to pile.


Able to analyse changes in the world of work and anticipate the implications for organisations, for managers and for workers.

Pilbeam and Corbridge. Original materials from People resourcing and talent planning: HRM in practice © copyright 2010 Pearson. All rights reserved.


The second Essential reading for this topic is:

Pilbeam, S. and M. Corbridge People resourcing and talent planning: HRM in practice. (Harlow: Pearson, 2010) 4th edition. Chapter 4 Human resource planning, talent planning and worker flexibility.

Remember that all the Essential reading for this programme is provided for you. Click ‘next’ to go to the next page and start reading.



Stephen Pilbeam and Marjorie Corbridge, People resourcing and talent planning: HRM in practice (Pearson, 2010; 4th edition)


The changing political, economic, social and global contexts of organisations have become catalysts for stimulating changes in the way in which work is organised. The argument for continuous and broad human resource planning, in contrast to numerically focused workforce planning, is also a response to more turbulent organisational contexts. Traditional approaches to work organisation based on hierarchy, formalised structures, job definition, demarcation of activities and bureaucratic control may be less suitable for uncertain and unpredictable environments.

Stimulants to the development of wider organisational flexibility also include:

  • The pursuit of competitive advantage through organisational differentiation on people performance, hence the concept of the lean organisation.
  • A shift from Fordist mass production techniques to flexible specialisation in production processes (Horton, 2000).
  • Demographic and social changes, such as a changing age profile in UK employment, increasing female participation in the labour market, concern with worklife balance and lifestyle changes including an increased expectation of a 24/7 society.
  • Globalisation and its impact on how organisations define their market and source their workforce.
  • The deregulation of labour markets and the reassertion of the right to manage by managers to include managing employee flexibility.
  • Changes in technology, particularly e-based and m-based technologies.
  • The search for economic efficiency and the satisfaction of shareholder financial demands.
  • Increasing number of service sector jobs and escalating customer aspirations and power.

The two perspectives are, first, the pursuit of employee flexibility at work by employers in order to maximise productivity and to secure economic efficiency and, second, the enhancement of flexible working opportunities to promote employee worklife balance. The first is principally an employer perspective and the second is principally an employee perspective, although clearly there are potential benefits to the employer in terms of the recruitment and retention of talented employees who are able to have their worklife balance .

Various forms of flexibility exist and common categories include functional, numerical and financial (Leopold and Harris, 2009; Beardwell and Claydon, 2007; Redman and Wilkinson, 2006; Atkinson, 1996; Bramham, 1994). Categorisation should not suggest that the forms of flexibility are mutually exclusive and many forms of overlapping flexibility exist (Figure 4.4). Managers need to distinguish between these forms of flexibility in order to be able to seize opportunities for increasing organisational flexibility, but they should also be aware of the problems


This relates to the employer’s ability to deploy people in response to work priorities and demands. It can be either horizontal or vertical. Horizontal implies a reduction in demarcation between activities and tasks at the same level while vertical functional flexibility involves the acceptance and performance of tasks and activities by employees at either a lower or a higher job level. Working practices which incorporate elements of functional flexibility include teamworking, empowerment, multi-skilling, re-skilling and project working.

This is the scope to expand or contract labour supply through altering the number of people employed in proportion to product or service demand. It relies on the quick and easy engagement and release of people through rapid recruitment responses and the use of fixed, short-term or temporary contracts. Numerical flexibility also involves the increased use of agency staff and the subcontracting of work. It requires an acceptance by management that using employee redundancy is a legitimate human resource practice.

This is concerned with restructuring working hours to increase organisational responsiveness to work demands. It has the aim of maximising productive time and minimising unproductive time and may be formal or informal. Informal temporal flexibility includes employee discretion to adapt working hours to work demands and also the growing expectation that employees should work ‘beyond contract’ when necessary (the concept of elastic working hours).

This increases the ability of the organisation to control employment expenditure. First, through the use of local market rates to determine the commercial worth and the reward package of employees to ensure value for money in employing staff. Second, through the use of individual pay arrangements instead of collectively regulated and uniform pay levels. For example, performance-related pay and profit-related pay. Third, through shifting from national or central bargaining to local bargaining arrangements to intensify the linkage between employment costs and local affordability. Fourth, through the use of non-consolidated bonus pay and non-pensionable payments to avoid those payments which relentlessly and permanently increase the pay bill.

This incorporates not only skills development and acquisition, but also employee receptiveness to the updating and extension of the skills necessary to reduce job demarcation and promote employee versatility. Skills flexibility may be vertical or horizontal through a deepening or a widening of the employee’s skill base. Skills

This infers a specific focus on the encouragement of flexible employee attitudes characterised by a receptiveness to learning new skills, a willingness to engage in functional flexibility and a responsiveness to changes in working practices or management approaches.

This has links to the concept of the learning organisation, broadly defined as an organisation which continuously transforms itself through the ability of its members to learn.

As an objective, this is a response to concern that organisational hierarchy may reinforce job specialisation and restrictive working practices and consequently inhibit flexible working and organisational responsiveness. Teamworking, matrix organisations, project working, lateral job moves, delayering, empowerment and process reengineering offer opportunities for increasing flexibility through fluidity of organisation structure.

Atkinson developed the model of the flexible firm in the 1980s and, old though it is, the model is still valuable in bringing together different forms and dimensions of flexibility and in providing a framework for understanding and analysing alternative ways to achieve flexibility and of identifying some of the implications of the flexible workforce. The flexible firm concept broadly divides the workforce into a core group, a first peripheral group and a second peripheral group. Alternative labels, in the context of the labour market, are primary, secondary and tertiary.


It will normally include knowledge workers, managers and other professional and technical staff. In return, core status implies employee willingness and ability to engage in multi-forms of flexibility in order to contribute significantly to the achievement of organisational success. Core workers have careers.

These people are ascribed first peripheral status and have a skills and knowledge profile which is general rather than specific to the core business of the organisation. Secondary employees are important, but not critical, to organisational success, as their skills and knowledge will normally be readily available in the external labour market.  This tertiary group also includes labour provided through contracts for services and the subcontracting of work to other organisations or to self-employed individuals. Workers supplied through agencies can also be part of this group.  In stark contrast it is possible to recognise also in this tertiary group those elite portfolio workers who possess skills for which there is high demand, who provide work on a paid-for-results or a consultancy basis, and where the correspondingly high rewards compensate for any lack of employment security or regularity. Patterns of work tend to be non-standard, and this group contributes to numerical flexibility through being subject to release and reengagement as required. They effectively buffer the core against insecurity. Employees in the secondary group tend to have jobs rather than careers.

The flexible firm model is a conceptual model, which helps our understanding, but it is not a prescription or a blueprint for the structuring of organisations. There is no rigid definition of the types of work which constitute each segment, nor is there guidance on the relative size of the segments in relation to organisational contingency factors. The model is a visual, analytical tool and allows a probing of the different forms of flexibility, an analysis of the varying patterns of work and employment packages, and a consideration of the relative size and managerial implications of the primary, secondary and tertiary elements. Handy (1989) proposes an alternative, but parallel flexible model consisting of a professional core, a flexible labour force and a contractual fringe to form what he terms ‘a shamrock organisation’. In common with Atkinson’s model (1984), the shamrock concept is silent on the most appropriate distribution of work between the three groups, but it does provoke further critical evaluation of organisational activity and consideration of how it can most effectively be resourced.

The positive flexibility thesis is that it provides a buffer in increasingly turbulent organisational environments, increases the strategic responses available to address the issue of competitive pressure, and enables the optimum utilisation of people in the pursuit of corporate objectives. The negative flexibility thesis is that it capitalises on or exploits the labour market vulnerability of employees, is a managerial lever to intensify work demands, reintroduces disharmony in terms and conditions between different groups of workers which results in tensions and disintegration into subcultures, and inhibits the development of the committed employment relationships and healthy psychological contracts which are essential to organisational success. Legge (1998) expresses the view that ‘flexible employment largely benefits the employer at the expense of the employee’ by giving primacy to the need of the organisation to survive in competitive environments through the satisfaction of escalating customer demands and the financial demands of shareholders.

The peripheralisation of a significant element of the labour force would seem to have little in common with one of the main dictums of HRM to value and develop employees as an organisation’s key resource.

Ultimately the complexity and inherent contradictions in the flexible firm approach require active management and demand a diverse range of human resource and employment relations skills.

Forms of flexibility from the employee perspective

However, this is not the only stimulus: the last significant increase in flexible working was in the 1970s at a time of recession, and economic pressure may lead to an increase again in flexible working. Sparrow quotes Peter Thomson, of Henley Management School, who says, ‘there is no magic rule that says knowledge work must be done in an office’, and also Alex Reeve of Microsoft who contends that ‘work is a thing that you do, not a place you go to’. The environmental impact of travelling to a place to work and the rising cost of office space may also be triggers for change. He also puts forward the view that ‘conventional working rewards inefficiency. Results based working rewards productivity.’














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