Work Allocation Forms: Substitution between Full-time, Part-time and Contracted Labour in the Creative Industries Ralitza Dobreva and Gregory John Lee

Work Allocation Forms: Substitution between Full-time, Part-time and Contracted Labour in the Creative

Industries

Ralitza Dobreva and Gregory John Lee

African Microeconomic Research Umbrella (AMERU) School of Economic and Business Sciences

University of the Witwatersrand

TIPS Annual Forum 2008


Introduction and Background

• Increasing importance of part-time and temporary work

arrangements:

• Internationally

(Kalleberg, 2000; Booth et al, 2002;

Peck and Theodore, 2007)

• Locally

About 20.3% of those employed in SA are in non-

permanent work arrangements

(estimated on the basis of 1999 OHS by Bhorat et al,

2002).



• Fast facts for developed economies in 2005:

(permanent and temporary part-time work)• the lowest proportions of part-time labour (below 5%) are found

in the Czech Republic, Hungary and Slovakia.

• Australia, Japan, the Netherlands and Switzerland have the

highest shares of part-time employment: above 25%.

• The Netherlands has by far the highest rate of part-time

employment – above 35% (ILO, 2007).

• Most research explores macro-level effects (e.g.

productivity) or labour supply side (profiles / careers) • But little research on firms’ demand for different forms of

alternative work arrangements • Permanent part-time vs. temporary (contract) employment


Introduction and Background• Paper arises out of a broad study on the creative industries in

Gauteng, commissioned by the Gauteng Department of Sports, Arts,

Culture and Recreation, in collaboration with the British Council

(GDSACR, 2008).

• Creative Industries?

• Firms, whose activities “have their roots in individual creativity,

skill and talent and which have a potential for job creation through

the generation and exploitation of intellectual property”

(DCMS, 2001)

• In GDSACR study, these include visual arts, performing arts,

cultural tourism, multimedia, music, craft, audiovisual, cultural

heritage, publishing, design, fashion and other.



• Purpose of the paper:

• to explore the drivers of demand for non-standard forms of

employment,

• specifically differentiating between permanent part-time and

temporary (contract) workers

• in the context of the creative industries in Gauteng.


Theoretical Perspectives on Alternative Employment Arrangements

• The firm’s approach to decision about the type of contracts

offered to workers has to do with the assumption that that the

termination of permanent employment contracts is costly

• Hence, temporary employment contracts are used as “buffer

stock” to complement permanent employment:

• expand temporary employment during good times

• terminate temporary employment during bad times

• retain core of permanent employees

• Garibaldi, 2006


Theoretical Perspectives on Alternative Employment Arrangements

“Buffer stock” theory does not explain firm’s demand for part-time vs. temporary (contract) workers

Other theories to complement “buffer stock” model

– transaction cost economics - aspects of the transaction such as frequency, specificity, opportunism and uncertainty will dictate the extent of externalisation

– resource-based theory - focuses on the extent to which the resource drives competitive advantage.

Propositions

Proposition 1: A large degree of financial change will generally lead to greater use of full-time or contract workers but fewer part-time workers

Proposition 2: The effect in Proposition 1 will be less prevalent for older firms

Proposition 3: Employment changes in times of financial growth will tend the firm towards a) more full-time employment, and b) more use of part-time work than contract labour as a complement to permanent employment

Proposition 4: Employment changes in times of financial decline will tend the firm towards a) more full-time employment, and b) more use of part-time work than contract labour as a complement to permanent


Results

Across the entire sample:

the average share of full-time/permanent workers is 76%

(SD = 34%),

average part-time usage is 12%

(SD = 25%),

contract labour comprises some 11%

(SD = 26%)


Figure 1: Alternative employment across varied financial and employment conditions


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Shrinking Same Growing

Shrinking Lot

Shrinking Bit

Same

Growing bit

Growing lot

Average of %NonFT

TOChg

ChangeEml

Table 1: Disaggregated employment usage across changes in turnover and employment


Change in TurnoverChange in Employment

Grand TotalShrinking Lot Shrinking Bit Same Growing bit Growing lot

Shrinking

%Permanent 60% 14% 59% 60% 80% 57%

% Part-time 0% 26% 17% 13% 20% 16%

%Contract 40% 60% 24% 27% 0% 27%

Same

%Permanent 68% 83% 83% 89% 82% 84%

% Part-time 16% 11% 10% 7% 13% 10%

%Contract 16% 6% 7% 5% 5% 6%

Growing

%Permanent 20% 73% 61% 65% 58% 61%

% Part-time 60% 16% 21% 7% 15% 18%

%Contract 20% 11% 17% 28% 27% 20%

Total %Permanent 64% 76% 76% 83% 73% 76%

Total %Part-time 17% 14% 13% 7% 14% 12%

Total %Contract 19% 11% 11% 10% 13% 11%

Figure 2: Disaggregated employment usage over varied financial and employment conditions


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Average of%Perm

Average of%Part

Average of%Contract

Average of%Perm

Average of%Part

Average of%Contract

Average of%Perm

Average of%Part

Average of%Contract

Shrinking Same Growing

Shrinking Lot

Shrinking Bit

Same

Growing bit

Growing lot

TOChg Data

ChangeEml

Table 2: Disaggregated employment forms by turnover, employment and age of firm


Change in Turnover

Age of firmEmployment

forms

Change in Employment

Grand TotalShrinking Same Growing

Not growing

Experienced

% Permanent 81% 77% 91% 80%

%Part-time 8% 13% 6% 11%

%Contract 11% 10% 4% 8%

Inexperienced

% Permanent 66% 89% 87% 86%

% Part-time 19% 6% 8% 8%

%Contract 14% 5% 4% 6%

Growing

Experienced

% Permanent 59% 46% 58%

% Part-time 29% 46% 30%

%Contract 12% 8% 12%

Inexperienced

%Permanent 20% 73% 59% 63%

% Part-time 60% 0% 20% 13%

%Contract 20% 27% 21% 24%

Total %Permanent 69% 78% 86% 80%

Total Ave. of %Part-time 17% 13% 9% 12%

Total Average of %Contract 14% 9% 5% 8%

Figure 3: Employment forms across capital intensity and total workforce


0%

20%

40%

60%

80%

100%

120%

Average of%Perm

Average of%Part

Average of%Contract

Average of%Perm

Average of%Part

Average of%Contract

Average of%Perm

Average of%Part

Average of%Contract

Low Medium High

Low

Medium

High

Capital intensity Data

Empl size

Table 3: Effect of capital intensity and firm size


Capital intensityEmployment

forms

Total workforce size

Grand TotalLow Medium High

Low

%Permanent 80% 68% 75% 76%

%Part-time 17% 23% 11% 15%

%Contract 3% 9% 14% 9%

Medium

%Permanent 90% 71% 66% 78%

%Part-time 6% 10% 10% 8%

%Contract 3% 18% 24% 14%

High

%Permanent 96% 89% 65% 76%

%Part-time 4% 8% 15% 11%

%Contract 0% 3% 20% 12%

Total %Permanent 87% 75% 69% 76%

Total %Part-time 10% 16% 13% 12%

Total %Contract 2% 9% 18% 11%

Figure 4: Capital intensity and total firm (workforce) size


0%

20%

40%

60%

80%

100%

120%

Average of%Perm

Average of%Part

Average of%Contract

Average of%Perm

Average of%Part

Average of%Contract

Average of%Perm

Average of%Part

Average of%Contract

Low Medium High

Low

Medium

High

Capital intensity Data

Empl size

Discussion and conclusions

Generally, financial change leads to substitution into buffer stock in different ways

In addition, a reduction in the workforce is associated with greater part-time and contracting work.

Hence, uncertainty and change do indeed drive use of “buffer stock” employment.

Different patterns emerge, depending on the extent of workforce reduction, the associated financial state, and the age of the firm.


Discussion and conclusions (ctd)

There are often large differences between firms that do smaller (<10%) as opposed to larger (>10%) reductions in employment.

Smaller reductions in workforce size when associated with financial downturns tend firms towards contract labour. Large reductions in workforce but growth in financial turnover are associated with large substitutions into part-time employment, and this effect is associated with younger firms.

Large differences in employment trends (volatility) are associated with younger firms, which make more use of contract labour.


Discussion and conclusions (ctd)

High levels of full-time labour are linked to financial downturns but where firms (especially older firms) are expanding their workforces. Full-time employment is higher with greater capital intensity but smaller absolute workforce size. High levels of full-time employment

are associated with financial downturns but where firms (esp. older firms) are expanding their workforces.

Contract labour is linked especially to times of financial instability. Higher capital intensity and larger workforces are also linked to greater use of contracting.


Limitations

Cross-sectional data Lack of direct measures of environmental and transaction characteristics

Future research

Panel data Comparison of trends with other industries / broader economy

Thank you!


Documents

Work Allocation Forms: Substitution between Full-time, Part-time and Contracted Labour in the Creative Industries Ralitza Dobreva and Gregory John Lee