Changing Employment Practices [30 out of 30, 2001]

3.) In evaluating how employment practices have changed in recent years, one must consider the type of employment available and the level of employment enjoyed by the workforce.

With reference to the case study, “swaths of manufacturing industry… confronting the most difficult of trading conditions”, and “the number of part-time workers has grown by 30,000 over the past three months”, highlight the employment changes.

In analysis, a movement away from manufacturing has seen a rise in such practices as ‘call centres’. Owing to the relatively low investment needed to set up a call centre, employers can shut down as easily as they open. This will impact negatively on staff, as job security will be decreased – employers haven’t had to invest so much of their own money, so they won’t work so hard. The number of temporary workers has increased; for businesses, this means more costs are incurred through training and high turnover of staff.

In evaluation, the ease with which employers can start up/shut down new businesses such as ‘call centres’ has had a negative effect on the economy. This is because staff feel less secure in their jobs, increasing the likelihood of them saving money, rather than spending. Therefore, less money is in the economy, increasing the chances of the business world entering a recession. In turn, this leads to a drop in interest rates, as the Bank Of England responds to the situation. These changing business practices have led to decreased job security, which impacts negatively on productivity. This decreases the chances of meeting consumer demand, thus compromising profits, as they become dissatisfied. The survival of the business has become compromised by the ease with which new ones can be started up – management are less likely to stay and fight.[^]

4.) The action that the government could take to prevent 50,000 jobs going in the automotive industry supply chain would be to abolish vehicle taxation. A measure that could be taken to soften the blow would be to create new jobs for those laid off.

With reference to the case study, car industry executives “emphasized the damage to their business… of… vehicle taxation”, while “the number of permanent full-time jobs is increasing”.

In analysis, the abolition of vehicle taxation would increase the likelihood of cars being sold, because the £180 per vehicle would not be in place (roughly). The second-hand car market would also improve, as people wouldn’t be thinking, “I’ve got to pay as much for the tax as I do for the car”.

Creating new jobs would lessen the blow, as people would still be in some form of employment – thus, they wouldn’t be living off state benefits. Keeping them busy would also decrease the chance of problematic social behaviours (crime, violence etc) breaking out.

In evaluation, the abolition of taxation for vehicles would improve demand from the consumer, thus increasing the competitiveness of the company and market. Through improved cash flow, liquidity problems are less likely to be encountered, thereby improving the market survival chances. Increased sales revenue maximizes profits, and frees up cash for reinvestment in the individual companies. This potential for fixed asset purchase will not only improve the competitiveness of the company through more efficient working practices, it will offer the opportunity for expansion – maximizing the growth of the company. The economy will benefit from the creation of new jobs, as people will be more inclined to spend if they have job security. This would virtually offset job losses in the automotive market.[^]