Alex De Ruyter, Ian Kirkpatrick, Kim Hoque and Chris Lonsdale

Introduction Analysis of labour flexibility has formed significant

stream of HRM research over past 25 years.

Changes in the way we think about labour flexibility

Atkinson’s (1984) Flexible Firm model

Criticisms

Other evidence for strategic approaches to labour flexibility?

We contribute to this argument, using NHS and LAs as case studies

Developments in agency work for nursing and social care

Labour flexibility: ad-hoc or strategic?

Demand-side explanations (sic. “externalization theory – Purcell et al., 2004)

The Flexible Firm (Atkinson, 1984)

Core (permanent – functional flexibility) and periphery (casual/part-time etc – numericla flexibility)

Employers exercise deliberate intent in terms of utilising each category

Human Resources Architectures (Lepak and Snell, 1999)

Links TCE and Human Capital approaches

Only offer permanent jobs to those who have high value and “uniqueness” of human capital

Labour flexibility: ad-hoc or strategic?

Criticisms of externalization theory

Highly transactional approach to the use of agency workers

“laissez faire management” (Koene and van Riemsdijk, 2005)

Conflates employment status with job content

Overstates strategic intent of employers

Potential for ad-hoc measures, muddling through or fire-fighting (Peel and Boxall, 2005)

Ignores supply-side (e.g. bargaining power of workers)

Free agents (Kunda et al., 2002)

Labour flexibility: ad-hoc or strategic?

Evidence for a strategic approach

Research having taken a narrow focus as to how functional or numerical flexibility is pursued (Kalleberg, 2001)

Emergent strategies (Procter et al., 1994)

Organisations can demonstrate planned approaches in using agency workers as supplements or substitutes (Stanworth and Druker, 2006)

Engage with agency workers and integrate them into the organisation where needed (“special approach” – Koene and van Riemsdijk, 2005)

Technology as transformative?

Debate on flexibility largely conducted in the absence of discussion on impact of new technology to transform management of flexible staffing needs:

“[t]here has long been a significant divorce in the public management field between the practical and empirical centrality of IT and information changes on the one hand and their marginality, indeed almost complete absence, from the central texts of public management theory and the literature on public sector change on the other”

- Dunleavy et al. (2006: 468).

Technology as transformative?

Post-NPM shift to management regime of “Digital Era Governance”? (Dunleavy et al., 2006)

Transformative role of new IT systems

IT not new, but recent systems have power to transform relations with wider stakeholders......

“changes in management systems and in methods of interacting with citizens and other service-users in civil society in the underpinning and integrating of current

bureaucratic adaptations” (ibid. 468)

Technology as transformative?

Public sector developments:

More use of MIS and e-procurement

Instant information on contracting practices and rates offered by agencies

Greater coordination by purchasing organisations

Less scope for opportunism by agencies

Emergence of sophisticated Vendor Management Systems (VMS)

Agencies as “managed service providers”

Technology as transformative?

Engagement with temps = more control of recruitment, selection, training and integration into org + wider HR practices (ideal flexible staffing mix?)

Impact of new information technology on the procurement of agency workers –transformative => contributes to providing more info to management on flexible staffing needs

= MORE CONTROL; CONTROL OVER AGENCIES ANDCONTROL OVER LINE MANAGERS

– FIRST STEP TO MORE STRATEGIC APPROACH

Research questions

To what extent can the new management practices pertaining to the use of agency staff be interpreted as evidence for a more strategic approach?

How has the use of information technology facilitated a more strategic approach?

Are there any limiting factors within public sector organisations that have obstructed a shift to a more strategic approach to the management of agency (and other flexible) staff?

Employment & Agency Work in the UK NHS & LAs

NHS:

1.36 million staff in 2008; 408,000 qualified nursing staff (NHS IC, 2010)

agency nurses cover individual shifts; maternity leave /sickness and ebbs and flows in demand for services

LAs:

250,000 workers in English LA social care during 2008; 50,000 social workers

continued favourable conditions for the use of agency workers (“long term” agency workers)

Ongoing recruitment and retention difficulties

Methods and data

Mixture of primary and secondary data

Interviews with clinical, senior and operational managers, agency workers and agency/VMS managers:

3 NHS Trusts and 3 LAs in the Greater London Area, conducted between October 2007 and September 2008.

Semi-structured interviews took approximately between an hour and 90 minutes

Pragmatist epistemological position

Key characteristics of case study organisations

LA1 LA2 LA3 HT1 HT2 HT3

Total employment (LA or Trust)

7,987 8,600 10,500 9,000 2,500 6,000

Annual Gross Expenditure (£ millions)

528 999 983 676 260 402

Total employment of nurses (inc midwives) or social workers

195 258 345 3,150 900 1,928

No. of FTE posts filled by agency nurses or social workers in given month, 2008

47 (June) 101 (Feb) 207 (Jan) 109 (Jan) 29 (Feb) 60 (est. of annual

average)

Findings Variations between the NHS and LAs in the practices

pertaining to the management of agency staff

More coordinated and instrumental practices evident in NHS Trusts

The Situation Prior to Change

Catalysts for Change

After the Change: emerging strategic capability

The Situation prior to Change

Generally ad-hoc approach to managing flexible staffing needs

Line managers using agency staff for

“traditional” reasons such as short-term cover

covering for unfilled vacancies was a more widespread problem in social care),

without the permission (or indeed the knowledge) of senior managers

High degree of asymmetric information and coordination failure on the part of Trusts and LAs.

“…what happened in the past was there were hard-to-fill posts and because there is a service need, managers… rather than thinking about a recruitment strategy, have gone straight to an agency, got somebody in and then thought ‘well I’ve solved that problem for the moment, so I’ll go and solve some other problem’ and just let it tick over.

Rather than then going back and trying to address the recruitment issues, they just let it carry on….” (Recruitment and Contracts Manager, HT).

Catalysts for Change

Absence of any strategic oversight of agency use, or any clear HR strategies for flexibility requirements

created conditions ideal for an expansion of agency provision

Growing awareness of the costs of using agency workers

Pressure from central government to manage and reduce agency spend

Concerns over quality and commitment of agency staff

After the Change: emerging strategic capability

HTs:

Coordinated attempt to regulate and reduce agency use

Framework Agreements and e-procurement

Increased use of bank nursing and centralisation of banks

LAs

Widespread use of VMS

More attempts to engage agency workers and increase appeal of permanent work

Growing centralisation and controls over decision making and tighter restrictions on spending

Reduction in line manager autonomy:

HTs:

Centralised banks and declining agency use; increased role for procurement and bank managers

Proactive bank strategies

LAs:

Control and coordination through VMS

neutral vendor to oversee and administer all aspects of the agency worker procurement and placement

“the wards are not supposed to go direct [to the agency to make a booking]. And one of the things that I’ve done to actually make sure that that doesn’t happen is I’ve warned the agencies if the booking doesn’t come through us in the staff bank or the bedside manager, I won’t pay their invoice….

occasionally one or two might slip through the net but if I find out about them you know, then I do have to speak to that person and just remind them” (Nurse Bank Manager, HT).

More evidence of workforce planning – improved Management Information Systems

Emergence of new IT systems, an integral component of VMS

More systematic approach to the management of flexible staffing

Increased ability to plan shifts and rosters

Emergent capabilities in workforce planning

LAs increasingly pool and exchange data on pay rates and agency commission rates via VMS

Identify agency staff to offer permanent jobs

An IT system in practice:

“So it will say to run that ward at that level … it is retrospective, so it is a useful planning tool for staffing….

So the dependency acuity tool is key to how we work out staffing establishments in the Trust and it allows them then to calculate how many staff they need. It allows them to look at … you know, it tells them, is it really fluctuating? ” (Director of Nurse Education and Workforce Development, HT)

Discussion

Tentative shift towards a more coordinated, centralised approach

New systems do not represent a panacea to the problems that existed previously:

Compliance issues (e.g., going “off Agreement”)

Ability and willingness of line managers to use and engage with new systems

New systems were still in an early stage of development

e.g, on-line systems co-existing with paper systems

However, clear positive impact in enhancing the ability to calculate flexibility needs

Conclusions

Manifest desire by senior managers to exert greater control

much tighter contractual relationships with agencies, as espoused through Framework Agreements and Vendor Management Systems

Increased centralisation and coordination of the management of flexible staffing needs

New IT systems point to increased ability to predict demand levels and consequently plan staffing numbers

Conclusions

These developments suggest at least a partial move towards a more strategic approach in the management of agency/flexible workers.

Hence, this paper calls for a revision of existing accounts of how organisations approach labour flexibility:

New mechanisms and institutions around a more coordinated approach to flexibility – a process which in turn has had radical consequences for the management of HR.