The A to Z of Flexible Resourcing Strategies
A
agency workers: Staff employed by a third party, in this case an employment agency, to perform specified tasks for which the customer pays the agency rather than the individual worker.
alternating days/nights: A shift pattern that involves day and night two-shift working which has been fairly common across UK industry for many years. Generally, daywork consists of the normal eight-hour shift (typically 8am to 5pm) followed by a night shift of anything up to 12 hours (typically 10pm to 6am). Alternating days/nights are common in industries such as engineering, where continuous production is not required. Employees rotate either weekly, fortnightly or over a longer period. While the night shift invariably carries a pay premium, day work does not. Where employees alternate, the premium is generally spread equally over the entire shift cycle.
annual/annualised hours: A system whereby staff are contracted to work a specific number of hours each year and within which their weekly hours vary to accommodate seasonal or other peaks and troughs in production. For example, contract hours over a year may total 1,834, giving a weekly average of 39 hours. Over the year, staff may work 44 hours a week during busy periods and 32 hours at other times (see Variable hours schemes).
atypical employment: A term that applies to various forms of non-standard working, including part-time and temporary employment. It means that the employment differs from the "norm", which is generally considered to be full-time and with fixed hours.
B
back office: a term applied to support services, such as administration and secretarial work. These are often carried out in remote locations to reduce the costs of renting/leasing city centre offices and the time and cost of commuting to city centre locations.
benchmarking: A comparative performance exercise, usually against primary competitors and involving similar processes, although it is becoming common to benchmark against organisations in different industries and sectors that may be more willing to share information. Large organisations may also apply the process to internal functions and departments that are successful in a particular field or activity.
C
career/employment breaks: A break from employment that allows the individual to devote time to other interests, such as study and domestic responsibilities, after which they are able to return to work at the same level as before. Career/employment breaks are frequently associated with caring for and raising children.
casual staff: Staff hired on a temporary basis to perform specified tasks and functions. They may or may not be employed directly by the organisation for which they are working. See agency workers and temporary staff.
compressed working week: Working patterns that reallocate the normal weekly hours of work into fewer and longer blocks of time. Examples include nine-day fortnights, four-day weeks and 12-hour shift cycles (seven-day two-shifts).
co-sourcing: A variant of outsourcing that involves the service customer and supplier entering into a partnership that may involve, among other things, both parties sharing information and accepting pendulum arbitration to resolve contract disputes. Co-sourcing agreements attempt to prevent uncertainty and to accommodate change by setting out the parameters of any alterations to the contract.
complementary staff: A term used to describe temporary employees who are employed either directly or through a third party, such as an agency. The term was coined by the 1996 Manpower-sponsored report Flexible working means business.
compulsory competitive tendering (CCT): A UK government initiative (first introduced in 1980 by the Local Government Planning and Land Act) that requires all local government services, such as cleaning, housing, grounds maintenance and information technology, and NHS services such as catering and cleaning, to be put out to competitive tender, thus allowing private suppliers to compete with directly employed staff. The Labour Government has stated its intention of replacing CCT in local government by 1999 with its "best value" initiative. It is proposed that this will require local authorities to review 20%-25% each year of their less effective services, in terms of quality and cost, among other measures, by benchmarking them against similar services provided by other councils and private sector operators. It is envisaged that local authorities will be able to bid to provide services for other councils whose services fail to improve. See transfer of undertakings.
contract working: The employment of an individual on a short-term or temporary contract basis.
contractor: An individual or organisation that is contracted - under an outsourcing or sub-contract agreement, for example - to provide specific services or products.
core: a term applied to activities central to an organisation's operation and to employees who are normally employed full-time and provide skills that are difficult to replace with temporary staff. See flexible firm model.
core and periphery model: See flexible firm model.
core competence: A concept developed by James Quinn, and C K Prahalad and Gary Hamel1 and others, that argues that organisations have "core" competencies that can be undermined if the business is split into autonomous business units. This view has been interpreted by some as supporting the outsourcing of non-core activities so that an organisation is able concentrate on nurturing its core.
cross-pollination: A the term applied to the transfer of skills possessed by staff in one function or department or by employees of a third party to others during a teamworking exercise or cross-functional activities, such as project work.
D
delayering: The process of reducing the number of hierarchical layers in an organisation. It may lead to the formation of so-called "self-directed teams", because it requires lower-level employees to assume some, or all, of the responsibilities previously exercised by line and middle managers.
demarcation: The assignment of jobs/tasks on the basis of membership of a skilled trade group or trade union. It was common in unionised workplaces for workers to be allocated tasks that were within their skill or work group domain, whether or not other employees were capable of doing the job.
direct staff: Employees engaged in the actual production of a product or service. See indirect staff.
double-dayshift: A two-crew shift pattern that generally consists of two successive shifts of eight hours. This gives weekly cover of 78 hours (eg, 2 x 39 hours), the 16 hours a day usually running from 6am to 10pm. Employees typically alternate either weekly or fortnightly between the two shift patterns: 6am to 2pm and 2pm to 10pm. However, there are a number of variations to this common pattern. Where basic weekly hours are less than 39, then starting and finishing times may vary one day a week, with, for example, a 6.30am start or 9.30pm finish. Also, the second shift may only work four days a week - for example, from 2pm to 12 midnight on Monday to Wednesday, and 2 pm to 11 pm or earlier on Thursday. The second shift may be known as the afternoon or late shift, while the first shift is sometimes termed the early or morning shift. See also twilight shifts.
E
economy of scale: The situation where, as output grows, unit costs diminish. This is because total production costs will tend to increase less rapidly than output, and thus the longer-term average costs of production will decline. In terms of flexible resourcing, outsourcing is based on the belief that specialist service providers can provide economies of scale that are impossible for in-house providers to match.
enterprise webs: The name given by Robert Reich2 to the network of organisations that will develop as businesses outsource their administrative and support functions, and manufacturing. According to Reich, western corporations will develop webs with companies in newly industrialising countries as the former move from being volume-based to high-value knowledge-based organisations.
F
fixed costs: Costs that do not alter in relation to the amount of work being done and which accumulate over time. Fixed costs include labour costs, such as basic wages.
fixed-term contract: An employment contract that is for a specific, fixed period. For example, a person might be hired for 12 months to perform the role of a permanent member of staff who is on maternity leave.
flexiroles: Staff who can perform a variety of functions and tasks and who are regularly called upon for this purpose.
flexitime: Working time arrangements that allow staff to vary their starting and finishing times as long as they work their contractual hours in a given period. Generally, all staff are required to be present during "core" hours - for example, 10am to 4.30pm.
flexible firm model: A concept developed in the 1980s by John Atkinson and his colleagues at the Institute of Manpower Studies (now the Institute for Employment Studies) to describe an organisational structure that consists of a core group of staff and an increasingly peripheral group of workers. Typically, core staff are functionally flexible and provide skills that cannot readily be replaced by temporary employees, while peripheral employees are numerically flexible and consist of part-timers, temporary employees and sub-contractors, whose employment and hours of work can be altered to meet fluctuating demand.
freelancers: People with specialist skills who are employed to perform particular tasks and functions. For example, freelance journalists are often employed to write a specific news report or article and freelance information technology specialists are commonly hired to install and establish a software system. Freelancers are usually self-employed or employed via a third party.
functional flexibility: A term that denotes the ability of individual employees to perform range of tasks. Greater levels of functional flexibility are achieved where staff are multiskilled and can move between different job boundaries. Functional flexibility contrasts with the rigid job demarcations that were previously found in many sectors of the UK economy.
H
homeworking: Work that takes place in a person's own home. Homeworking is typically performed by women with childcare responsibilities and is associated with certain industries such as garment manufacture. Homeworking differs from teleworking in that the latter is associated with white-collar occupations and generally involves the use of information technology, such as electronic-mail, to enable the individual to retain on-line contact with his or her workplace. The autumn 1996 Labour Force Survey found that 625,000 employees and self-employed people were working in their own homes in their main occupation.
hotdesking: The practice of desk sharing that enables an organisation to maximise its resources in terms of office equipment and permits staff to be more flexible in their working arrangements. Working practices that are often referred to as hotdesking3 include "desk pooling", "free address", "just-in-time-office", "non-territorial office", "hotelling", "shared work stations" and "space sharing".
human resource planning (or manpower planning): A process to ensure that the requisite number of skilled staff are available when required.
I
indirect staff: Employees who support the production of a product or service, but do not provide any direct added value. See direct staff.
internal market: A system that involves one department purchasing the services or outputs of another internal section. Commonly, suppliers and customers work together to identify efficiency and quality improvements. See market testing.
invisible workers: The term given to former employees who continue to work in the same workplace but are directly employed by another business following their transfer under an outsourcing agreement.
J
job sharing: An arrangement that usually involves two people sharing one full-time job. It is therefore a form of part-time working. The job-sharers work at different times, although there may be a period of overlap to pass on work-related information.
job-splitting: The practice of splitting one full-time post into two part-time positions. Job splitting differs from job-sharing in that it makes two distinct posts with no shared responsibilities or onus on the individuals concerned to cover for each other.
L
labour pool (or bank staff): A flexible group of people with the relevant skills who can provide cover for vacancies and absence, and who can be drafted in at fairly short notice. In the NHS, many trusts operate nursing banks - pools of nurses who are on call and who are often cheaper than nurses employed through specialist agencies.
linkage principle: A term associated with outsourcing that relates to the creation of a "cluster" of businesses so that suppliers and customers are located together, enabling supplies to be transferred on a just-in-time basis. Nissan's Sunderland car factory complex, for example, includes a business park consisting of suppliers such as Ikeda Hoover, Bundy and Nissan Yamato Engineering, while Johnson Controls and Arvin, the exhaust manufacturer, has developed production facilities next to Ford UK's Dagenham plant in East London.
locational flexibility: Any working arrangement that provides a degree of flexibility over where the work is done. This can range from sharing common office facilities to working from a remote location. Such arrangements mean that people have no individual designated workspace at his or her employer's main work site. See hotdesking and remote working/telecommuting.
M
marginal cost: The amount of change in the overall cost of providing a service or producing a product (the extra cost) when one additional unit is produced or supplied. Short-run marginal costs refer to changes when one input, such as labour, is increased, whereas long-run marginal costs involve changes that occur when all inputs, especially capital, are increased. The marginal costs associated with providing a service or function need to be calculated when assessing whether or not it can be outsourced.
market testing: A benchmarking exercise that compares the cost of providing a service in-house with the cost of its provision by an outside supplier. In 1991, the then UK Government introduced a market testing programme to ensure that civil service departments, among others, were giving the best value for money. The programme required them to compete with private companies for the work they were doing. As a result, large swathes of public services have been outsourced, along with many of the staff who had previously been doing the work internally. For example, the Inland Revenue has passed its tax collection service to Electronic Data Systems (EDS) in Europe's largest outsourcing agreement.
multiskilling: The concept of employees acquiring a range of skills, rather than knowledge and competence in just one skill area, so that they are more functionally flexible. Multiskilling is accompanied by a reduction in the number of job titles and classifications.
N
network organisation: A concept developed by R Miles and C Snow4 to describe a business that plays a controlling role (its core discipline) in organising the activities of a number of different enterprises, so that the design, production, supply and distribution of a product or service are carried out to order.
niche expertise: Tasks and functions that organisations are able to perform better, and frequently, more cheaply than others. Outsourcing is based on the premise that the outside supplier is able to perform a specific function, such as catering, information technology and security, more efficiently because of its particular expertise.
nine-day fortnight: A work pattern that enables the individual to organise his or her fortnightly working hours over nine days rather than 10. This entails working longer than is the norm on all or several days.
non-standard working: Any work arrangement that is outside the "norm", which is generally considered to be a permanent, full-time, "nine-to-five" working pattern. Non-standard employment includes part-time, casual/temporary and variable hours working. See also atypical employment.
numerical flexibility: A term that describes an organisation's ability to alter its employee numbers fairly quickly to meet peaks and troughs in demand for its products or services. Organisations that require a high degree of numerical flexibility tend to make wide use of casual and temporary staff and workers on variable hours contracts.
O
on-call staff: The term given to people that an organisation employs as and when circumstances demand additional human resources. Usually, the employing organisation will operate a register of such individuals, who act as a labour "reserve". See zero-hours contract.
outsourcing: The practice of employing a third party to perform a specific task or function. It enables organisations to concentrate on their core activities and, possibly, reduce the costs associated with supplying the outsourced functions in terms of staff, machinery and other resources. Outsourcing transfers the risks and costs of employing staff for a specific purpose to a third party. See contracting and subcontracting.
outworkers: See homeworking.
overtime: A form of temporal flexibility to meet an increase in demand that involves staff working additional hours over and above their contractually agreed total in return, usually, for enhanced remuneration. For example, it is common for all Monday to Saturday overtime hours to attract a premium of time-and-a-half (the basic hourly rate plus 50%), while Sunday overtime is usually paid at double time (twice the basic hourly rate).
P
part-time: Staff whose contracted hours are less than the basic number worked by full-time employees, which are generally 37 to 39 hours a week. The number of hours worked by part-timers can range from one or two hours a week upwards. The New Earnings Survey defines part-timers as "people normally working for not more than 30 hours a week except where otherwise stated". A survey for IRS5 found that employers regarded any employee working less than full time as part time.
periphery: See flexible firm model.
portfolio working: The practice of working, usually part-time or casually, in a number of jobs at different times of the day, week or month. Portfolio working can reflect an individual's desire for freedom and flexibility in his or her working arrangements, but it could also be that they are unable to find a full-time job.
profit centre: The practice of establishing separate departmental or functional business units, such as manufacturing and marketing, that are responsible for their own budgeting, expenditure and planning. This enables the organisation to ascertain and monitor departmental profit levels.
R
re-engineering: A process that breaks down an organisation into its critical processes in order to identify best practice and facilitate greater efficiency and effectiveness. Michael Hammer and James Champy in their book, Re-engineering in the corporation, claimed that "it is not products but the processes that create products that bring companies long-term success".6 Conventional re-engineering exercises generally involve extensive cost cutting because they focus on ensuring that all processes add value and, as a result, cause functions that are not considered critical or that fail to add value to be eliminated. Re-engineering has been criticised for largely ignoring the human impact of such change.
redeployment: Assigning staff to other tasks or functions. Its aim is often to retain a member of staff when his or her current role is no longer required.
relocation: A move to another office or place of work within the same organisation.
remote working: Any working arrangement that allows an individual or group of employees to work in a location that is a significant distance from the main place of work - sometimes in another country. See hotdesking, locational flexibility, office hotelling and telecommuting/ teleworking.
reservist: See on-call staff and zero-hours contract.
resourcing: The practice of ensuring that the necessary resources (the factors of production) - natural, capital and human - are available as and when required for the production and distribution of an output (product or service).
risk management: The process of assessing and providing for the risk, in financial terms, that is involved in following a certain course of action, such as diversification. Successful risk management is an important financial goal, along with growth and increasing profitability and cash flow.
S
sabbatical: A period of extended leave, usually unpaid, that allows an employee to pursue a course of study.
self-employed: the status of people who are not directly employed by an employer, but who work for themselves, possibly on a freelance basis, and sell their labour directly to the customer. Department for Education and Employment statistics define the self-employed as "those who in their main employment work on their own account, whether or not they have any employees". The number of self-employed people in the UK rose sharply during the 1980s: by summer 1997, 3,330,000 people were self-employed, compared with 2,861,000 a decade previously.
seven-day two-shifts: A shift system that involves two 12-hour shifts, typically from 7am to 7pm and 7pm to 7am. It has become more common as basic weekly hours have been reduced and is typically associated with continuous shiftworking that is based on a four-crew rota over a four-week cycle. For example:
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Crew A |
M |
T |
W |
Th |
F |
S |
Sun |
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Week 1 |
Rest |
Rest |
Day |
Day |
Rest |
Rest |
Rest |
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Week 2 |
Night |
Night |
Rest |
Rest |
Day |
Day |
Day |
|
Week 3 |
Rest |
Rest |
Night |
Night |
Rest |
Rest |
Rest |
|
Week 4 |
Day |
Day |
Rest |
Rest |
Night |
Night |
Night |
Shamrock organisations: The name given by Charles Handy7 to organisations that, as a result of rapid change, competitive pressures and technological advances, will in due course acquire a clover shape - one leaf representing the core of the business, one representing flexible contract labour, and one the organisation's outsourced functions and services.
shiftwork: Work that is performed outside the normal nine-to-five work pattern in order to maximise the use of fixed assets, such as plant and machinery, and/or to meet product or service requirements. In the financial sector, for example, the proliferation of call centres that are open 24 hours a day means that staff are required to work evenings and nights. There are numerous shift patterns, including alternating days/nights, double-dayshift, seven-day two-shifts and three-shift systems.
short-term contract: An employment contract for a limited, specified period. Traditionally, such contracts have been used to cover for someone on maternity leave or other extended leave period. Nowadays, it is common for staff in some sectors, notably publishing and further education, to be employed on a series of short-term contracts rather than on a permanent full-time basis.
short-time working: A reduction in normal hours of work over a week or month to accommodate a fall in demand for, or over-production of, a product or service. Companies in the motor industry occasionally lay off workers for a short period, usually on a agreed rate of pay, when output outstrips demand.
subcontracting: The practice of employing a third party to perform a specific function or task. ACAS, the conciliation and arbitration service, defines subcontracting as involving "workers who carry out work in an establishment who are either self-employed or employed by an outside organisation". Subcontracting transfers the risks and costs of employing staff for a specific purpose to a third party. Subcontracting differs from outsourcing in that it is typically associated with functions and tasks that have almost always been performed by a third party, whereas outsourcing is a relatively new phenomenon and is the practice of getting another business to do work that was previously done in-house. See outsourcing.
supplier measures: Measurements of, for example, quality that are applied to suppliers of parts and services. These are often a mix of process and output metrics. Supplier measures are becoming increasingly important as more parts and services are bought in rather than produced in-house. Automobile components, for example, account for around 60% of the cost of a new car. Thus, car manufacturers apply stringent supplier measures and establish close relationships with suppliers in terms of quality requirements and product development. The introduction of just-in-time (JIT) inventory systems has added impetus to the rigid measure of supplier performance.
T
telecommuting/teleworking: The terms given to an arrangement that allows an employee to work from home (using a computer, fax/modem etc). Employees working in this way no longer physically have to travel to work and are usually in jobs that do not require regular face-to-face contact. Teleworking differs slightly from telecommuting in that the employee who works some or all of his or her time away from the main place of work could be based in a teleworking centre rather than at home.
temporal flexibility: Flexible working arrangements that allow employers to vary the hours of work to ensure a better fit between output requirements and employee input. Temporal flexibility includes annual/annualised hours, flexitime, overtime, part-time working, shiftwork, term-time working and zero-hours contract.
temporary staff: Workers employed on a temporary basis to meet peaks in demand that cannot be resourced by the permanent workforce. The Labour Force Survey (LFS) includes casual, seasonal and fixed-contract staff in its temporary working category. The spring 1996 LFS found that 1.6 million people, or 7.1% of the UK's employed workforce, were temporarily employed.
term-time working: A working arrangement whereby staff work only during school or college terms. This enables people to care for children during school and college holidays. They may take unpaid leave or, as under Scunthorpe & Goole Hospitals NHS Trust's annual hours system (see case study three), received pay equalised over 12 months.
three-shift systems: A shift system with three periods of work that can be either continuous or discontinuous. It provides 24-hour cover over five, six or seven days. The common three-shift arrangements are:
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M |
T |
W |
Th |
F |
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6am-2pm |
Crew |
A |
A |
A |
A |
A |
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2pm-10pm |
Crew |
B |
B |
B |
B |
B |
|
10pm-6am |
Crew |
C |
C |
C |
C |
C |
Where basic hours are less than 39 a week, any shortfall to accommodate the shift pattern is made up by overtime or time off in lieu.
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Crew A |
M |
T |
W |
Th |
F |
S |
Sun |
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Week 1 |
Early |
Early |
Early |
Early |
Early |
Early |
Early |
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Week 2 |
Rest |
Rest |
Late |
Late |
Late |
Late |
Late |
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Week 3 |
Late |
Late |
Rest |
Rest |
Night |
Night |
Night |
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Week 4 |
Night |
Night |
Night |
Night |
Rest |
Rest |
Rest |
Some companies use five, six or more crews to offset the need for substantial overtime working. Five-team rotas normally operate on an annual hours basis.
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Crew A |
M |
T |
W |
Th |
F |
S |
Sun |
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Week 1 |
Early |
Early |
Late |
Late |
Night |
Night |
Night |
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Week 2 |
Rest |
Rest |
Early |
Early |
Late |
Late |
Late |
|
Week 3 |
Night |
Night |
Rest |
Rest |
Rest |
Early |
Early |
|
Week 4 |
Late |
Late |
Night |
Night |
Night |
Rest |
Rest |
time banking: A flexible hours system that enables employees to work extra hours, over and above their contractual weekly hours, that they store in an individual "time bank". The banked hours can be used to take time off, although overall hours must be in balance over the year. Adam Opel, the German subsidiary of General Motors, agreed a time-banking system with its works council in September 1995 in an agreement that covers 11,000 workers at the company's Rüsselheim plant. See also flexitime.
Transfer of Undertakings (TUPE) Regulations: A legal statute - the Transfer of Undertakings (Protection of Employment) Regulations 1981 - which turned the European Community's Acquired Rights Directive into UK law to protect employees' rights, such as continuous employment and their terms and conditions where their work has been transferred to another employer. There has been some confusion over the way TUPE works.
twilight/part-timer shift: A shift pattern that generally involves an afternoon/evening shift that is often worked by part-time employees, frequently women. They vary in duration, but typically run for four hours from 5pm to 9pm.
V
value analysis: A method of assessing tenders for contracts in terms of effectiveness and costs. Value analysis is also known as value engineering or value management.
value-chain analysis: A business evaluation process that assesses the link between various organisational components in order to establish whether they are strategic activities that are a source of competitive advantage or functions that can usefully be outsourced.
variable costs: Costs, including labour costs, that vary with the level of output.
variable hours: Flexible employment arrangements that involve variations in the normal or standard hours work that do not attract an overtime premium.
virtual company: A business that outsources almost every function including manufacture and support services, retaining only management of the whole process. Virtual companies are also known as the modular or minimalist organisations.
W
weekend-only shifts: A term applied to shifts that run from Friday evening to Sunday and involve employees who do not work the rest of the week. Such shifts may consist, for example, of two weekend days or three weekend nights.
weekend working: Employment that involves working part or all of the weekend. The incidence of Sunday working has grown steadily over the past few years and reflects the deregulation of Sunday trading in 1994. The spring 1995 Labour Force Survey found that more than 2.5 million employees usually worked on Sundays, up from fewer than 2.4 million two years earlier. The spring 1996 LFS found that weekend working was particularly popular among young people (16-24 years) in full-time education.
Working Time Directive: A European Community Directive that provides a statutory framework for regulating hours of work and annual holidays. The Directive was adopted by the Council of the European Union on 23 November 1993 and was to be implemented by Member States by 23 November 1996. In 1996, the then UK Government unsuccessfully challenged the Directive in the European Court of Justice.
Z
zero-hours contract: An agreement to employ a person, as and when required, to fill a role, but where there is no commitment to any minimum number of working hours. The approach may involve a flexible register of employees or on-call staff. Zero-hours arrangements provoked public controversy in 1995, when staff at the Glasgow branch of the fast-food chain Burger King were required to clock off during slack periods and were paid only for the hours actually spent serving customers.
1 Quinn J B (1992), Intelligent enterprise (Free Press, New York); Prahalad C K and Hamel G (1990), "The core competence of the corporation", Harvard Business Review, May-June, pp.80-90.
2 Reich R (1991), The work of nations (Simon & Schuster, New York).
3 Ball S (1996), "Hotdesking: revolution or evolution?", Flexible Working, November, pp.18-21.
4 R Miles and C Snow (1986), "Network organisations: new forms", Californian Management Review, vol 28 (3), spring, pp.62-73.
5 IRS (1993), "Part-time working survey", parts 1, 2 and 3, IRS Employment Trends 531, 534, 536.
6 Hammer M and Champy J (1993), Re-engineering in the corporation (HarperCollins, New York).
7 Handy C (1989), The age of unreason (Hutchinson, London).
