Investments in a Sustainable Workforce in Europe

Tanja van der Lippe, Zoltán Lippényi

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9781138477261
• eBook ISBN: 9781351105309
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

A sustainable European workforce has become increasingly relevant in our present day and age. Flexibility and job insecurity are omnipresent; organizational workforces are displaying growing diversity with respect to age, gender, ethnicity and family status; and Europe's welfare states are delegating more and more responsibility for the well-being of workers to employers. Now more so than ever, organizations need to consider investing in workers to improve their performance and level of satisfaction. These investments can take many forms, including flexible work arrangements, training plans, child-related policies and health programs. The crucial question is how to make this happen. Why do some organizations invest more and others less in their employees? Why do some employees make use of these investments and while others do not? Why do such investments sometimes improve employee performance and satisfaction and sometimes not? This book addresses precisely these questions. The book contributes a new, large-scale survey of 259 organizations, 869 work units, and 11, 011 employees in six diverse economic sectors in the Bulgaria, Finland, Germany, Hungary, the Netherlands, Portugal, Spain, Sweden and UK to study the causes and consequences of organizational investments.

This book appeals to undergraduate and postgraduate students, researchers and lecturers in the fields of Sociology, Business and Management, and Organizational Studies. It will also be useful for practitioners of Human Resource Management and others interested in workforce sustainability.

Part I

Organizations and their employees in a sustainable workforce

1 A sustainable workforce in Europe

Bringing the organization back in

Tanja van der Lippe

In need of a sustainable workforce

Globalization, economic fluctuations, the aging population, technological advances, and rapidly changing social structures pose new challenges to creating a sustainable workforce in Europe. The term ‘sustainability’ comes from the environmental domain and refers to using resources in a way that retains them for future generations. As a concept, sustainability can also be applied to employment relations. The European Commission’s Europe 2020 strategy identifies efforts to ensure quality of work and employment conditions as a core tool for promoting a sustainable workforce (European Commission, 2010a, 2016b). Achieving this aim is critical, especially at a time when people are less secure in their jobs, governments are reining in social welfare spending, and the social, economic, and ecological environments are challenging. Generally speaking, a workforce is sustainable when: (1) employees are productive and satisfied (micro level); (2) organizations are profitable and workplaces are cohesive (meso level); and (3) countries have a high labor participation rate and a flourishing economy (macro level) (Appelbaum, Bailey, Berg, & Kalleberg, 2000; Bäck-Wiklund, Van der Lippe, Den Dulk, & Van Doorne-Huiskes, 2011; DiFabio, 2017).

Work organizations play a key role in building a sustainable workforce. It is organizations that invest money, time, and effort in developing human capital, that put work–life policies in place, that establish flexible work and health arrangements for employees, and that address the long-term employability of older workers. These investments may not always have direct payoffs for the organization itself, although managements most definitely count on such benefits. At the societal level, organizational engagement in a sustainable workforce is crucial for retaining talent and tapping into the unused potential of women, migrants, and older workers (Gallie, 2009; Taylor, Loretto, Marshall, Earl, & Phillipson, 2016; Van der Lippe, 2007).

While few would question the centrality of organizations in nurturing a productive and flourishing workforce, sociologists of work have long refrained from engaging with their role. The research agenda typically centers around labor markets and how they value workers’ attributes. Analyses focus on formal education and labor market experience, or prioritize the role of occupations and how labor markets ‘select’ workers for more or less advantaged jobs. Work organizations are often missing from such analyses. Others study organizations’ human resources as a system, and its implications for organizational performance. The question of how human resource investments impact individual workers has been left unanswered. At the opposite end of the micro–macro spectrum, we find studies of psychological mechanisms contributing to individual productivity and well-being. By focusing on individual-level mechanisms, however, this body of scholarly work does not problematize the contribution of the organization.

This book proposes to respond to a growing chorus in research that we must ‘bring the organization back in’ (Barley & Kunda, 2001; Baron & Bielby, 1980; Kalleberg, 2009; Scott & Davis, 2015). Major transformations in the organization of work and employment relations, occurring primarily within organizations, necessitate an organization-focused analysis of a sustainable workforce. The increasing diversity of the workforce and its varied preferences regarding fulfilling work require more knowledge of organizational investments in employees’ human capital and their payoffs (Rousseau, Ho, & Greenberg, 2006). New work forms call for in-depth knowledge of the effect of organizations’ flexibility policies (Ramsdal & Skorstad, 2016). The growing female employment participation rate makes the study of work–life policies all the more relevant (Acker, 2006). An aging population requires an examination of the employability of older employees in organizations (Kooij, Jansen, Dikkers, & de Lange, 2014). The increase in migrant employees in European countries makes it important to understand to what extent programs for training and development can help to improve their careers (D’Netto & Sohal, 1999). Finally, insecure and dynamic labor markets demand more knowledge of which kinds of employment contracts will help promote a sustainable workforce (Kalleberg, 2012; Rodriquez, Johnstone, & Procter, 2017).

The idea of investing in the workforce has been voiced in many EU directives and national policy initiatives, as well as in the research community (Cappelli, 2008; Den Dulk, Peper, Kanjuo Mrčela, & Ignjatović, 2016; European Commission, 2010a; European Commission’s European Political Strategy Centre (EPCS) 2016; Kossek & Michel, 2010; Schalk & Van Veldhoven, 2010). Nonetheless, a comprehensive account of the contribution of work organizations to a sustainable workforce and the impact of this contribution for workers and organizations is missing from the research agenda. This book proposes to fill this void and has the following aims:

1 To provide insight from an international comparative perspective into the availability of organizational policies for a sustainable workforce and their use by employees in different sectors across Europe.

2 To analyze the consequences of the availability and use of investments in productive and satisfied employees and cohesive and profitable workplaces in different sectors across Europe.

3 To introduce and integrate the meso (organizational) level into research on the micro and macro levels of employment.

Organizational policies

This book will address organizational investments that are thought to make important contributions to a sustainable workforce (see Grossmeier et al., 2016; Kelly et al., 2008; Kossek & Michel, 2010; Tsui, Pearce, Porter, & Tripoli, 1997). These investments are training, work–life policies, employability of older workers, flexibility and security, and health arrangements. Often, but not always, these investments are contingent on national laws and regulations regarding labor and employment. Sweden and Finland, for example, have generous family leave policies that organizations are required by law to implement. It remains to be seen, however, whether mandatory policies are also efficient for organizations. The provision of training may also hinge on labor policies that require regular training, for example about health and safety, in certain sectors and jobs (e.g., nurses). In some cases, for instance in Germany, sector or industry-level collective bargaining agreements stipulate the amount of job-related training that must be provided. Although the country or sector does not provide the training, it mandates organizations to do so. Another example is part-time work. Some countries, including Germany and the Netherlands, have statutory regulations that make it easier for individual employees to change their work hours. Finally, with pension rules and retirement ages varying between countries (Organisation for Economic Co-operation and Development, 2017a), national differences have emerged in how organizations deal with the employability of older employees.

Beyond institutional control as a homogenizing force, there are multiple reasons why organizations invest differently in employees. On the organization’s part, it can be intentional (e.g., provisions for employees with children), but it may also be the unintended consequence of discrimination (e.g., underinvestment in female employees and minorities). Investments therefore can be, and are, directed toward different groups of employees, and in this book we will focus on groups such as men and women, migrant and non-migrant employees, younger and older workers, and lower- and higher-educated employees. The consequences of investments for employees and for the organization as a whole depend on how much is invested and in whom. In this book, we will address both the availability and use of policies and their consequences for the workplace.

Training. Long-term relationships used to provide a favorable setting for deriving mutual benefits from investments in human capital, such as employee training. These days, however, employment relationships are less secure and the workforce more diverse: employees are more open to job change, and employers readily lay off workers when the market deteriorates. This can discourage the organization from making relationship-specific investments and employees from utilizing them. But who still receives training and why? This is a relevant question, since investments in training programs are found to be related to organizational performance (Hansson, 2007).

Work–life policies. Organizations differ significantly in terms of work–family responsiveness and the extent to which they supplement public work–life policies. That organizations are highly committed to work–life policies might be due to certain economic drivers, but also to institutional pressure. To what extent are statutory arrangements relevant for the way organizations invest in employees with children?

Employability of older employees. Many countries are facing an unprecedented aging of their populations, with consequences for the composition of the workforce. Companies are relying increasingly on the knowledge and skills of older workers; meanwhile, the pool of available workers is shrinking. Some organizations invest more than others in older employees by offering job expansion and other employability plans (Van der Heijde & Van der Heijden, 2006), but under what conditions do older employees make use of these arrangements?

Flexible employment contracts. Despite the new flexible worker paradigm, the implications of flexible contracts for productivity are unclear (Kossek & Thompson, 2016). Increasingly, organizations rely on flexible contracts to safeguard their profits, but they might still need to invest in temporary workers. Employees are expected to make use of flexible contracts, depending on the type of work, their work–life requirements, and the community infrastructure and country culture. Individual employees respond differently to these policies, but in what ways?

Health arrangements A combination of business norms of responsibility toward the workforce and the expected positive impact of health on employees and their performance (Carmichael, Fenton, Pinilla Roncancio, Sadhra, & Sing, 2016; Goetzel & Ozminkowski, 2008) has led many organizations to offer worksite health promotion (e.g., sports facilities, health checks, healthy nutrition programs), designed to improve employees’ lifestyle and health (Anderson et al., 2009). Worksite health promotion has the potential to do this because people spend a large part of their lives at work. It is therefore important to understand under what conditions organizations offer these programs.

Approach

To meet the aims of the book, our approach consists of three central elements, namely, (1) a multi-disciplinary theoretical approach, (2) a cross-country and cross-industry comparative perspective, and (3) a multi-level data design.

Multi-disciplinary theoretical approach

To understand why organizations invest in certain work arrangements, if and why employees actually use these arrangements, and what the consequences are, we make use of an analytical framework that allows us to study how the organization (meso level) interacts with both the employee (micro level) and the country (macro level). Because most research concentrates on either the employee or the country (or a combination of the two), their importance may be overstated (Beham, Drobnič, Präg, Baierl, & Eckner, 2018; Blossfeld & Hofmeister, 2006; Lewis, 2009; McGinnity & Whelan, 2009; Van der Lippe, De Ruijter, De Ruijter, & Raub, 2010). We therefore combine general theoretical insights from economic sociology with field-specific theories from sociology, economics, psychology, and management. In line with economic sociology (Smelser & Swedberg, 2010), we assume that investments by organizations and their use by employees depend on costs and benefits for both parties. Whether an investment benefits a company’s performance depends on its employees’ behavior, and vice versa; in other words, organizations and employees are interdependent (Buskens, Raub, & Snijders, 2003; Williamson, 1989).

Besides the interdependencies that arise during everyday ‘transactions’ in the workplace, relations between workers are also influenced by stereotypes in society about specific groups – women and minorities in particular. That can have consequences for power relations and inequality in workplaces, as expressed in relational inequality theory (Avent-Holt & Tomaskovic-Devey, 2012a). Culture and norms are therefore influential because tacit norms imposed by the social environment – whether that is the family, the organization, the industry, or the country to which one belongs – shape behavior and actions (England & Folbre, 2005; Ryan & Kossek, 2008; Tomlinson, Baird, Berg, & Cooper, 2018). If a certain group accounts for a large percentage of an organization’s employees (be it a group of women, younger employees, or older workers), not investing in relevant policies could lead to costs in terms of hasty resignations, with the organization then losing out on human capital and other skills (Kalleberg, Marsden, Reynolds, & Knoke, 2006; Lazear & Shaw, 2007). For example, if there are no work–family policies available, the costs of staying in the organization are expected to be higher for women (in terms of work–life conflict) than moving to a family-friendly organization. The specific ...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• Notes on contributors
• Preface
• PART I: Organizations and their employees in a sustainable workforce
• PART II: A comparative approach to which organizations invest in employees: differences between sectors and countries
• PART III: Returns on investments in a sustainable workforce for employers and employees
• Appendix 1: collecting cross-country comparative multilevel data in organizations (Chapter 3)
• Appendix 2: the differential influence of employee and organization characteristics on men and women’s training participation (Chapter 4)
• Appendix 3: do female managers improve women’s promotional opportunities? – Discussion of country-specific analyses (Chapter 12)
• References
• Index