redundancy and the great recession john sutherlandemail: [email protected] abstract...

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REDUNDANCY AND THE GREAT RECESSION

John Sutherland

Scottish Centre for Employment Research (SCER)

Department of Human Resource Management

University of Strathclyde, Glasgow

Email: [email protected]

ABSTRACT

Labour hoarding by organisations during the great recession is forwarded as one possible

explanation of the UK’s ‘productivity puzzle’. Productivity growth tends to be pro-cyclical, reflecting

lower factor utilisation during periods when aggregate demand is decreasing. At this point in the

economic cycle, organisations are unable to dispose easily of potentially redundant capital. Instead,

their focus is often upon making labour, the so-called ‘flexible’ factor of production, redundant. That

many organisations chose not make labour redundant during the years of the recession, opting

instead for alternative adjustment strategies, is argued to be one reason why productivity in recent

years has not returned to its pre-downturn trend.

This paper contributes to the discussion on labour hoarding by examining its obverse viz.

redundancy. It analyses responses made to two questions in the management questionnaire of the

2011 Workplace Employment Relations Study. These questions are:

“ …… can you tell me to what extent your workplace has been adversely affected by the

recent recession?” and

“ …. I would now like to focus on the impact (of the recent recession) on your workforce.

Which, if any, of these actions were taken by your workplace in response to the recent

recession?”

The principal focus of the paper is upon the relationships between whether a workplace was

affected ‘a lot’ by the recession and three policy actions denoting redundancy viz. whether

redundancy was compulsory; whether it was voluntary; or whether redundancy was an action taken,

irrespective of its type. Bivariate probits of the relationships between whether a workplace was

affected ‘a lot’ by the recession and each of the other policy actions identified are also estimated.

Predicted probabilities are calculated from these estimations and these are used to illustrate how

redundancy as a policy action increases in relative importance when a workplace is affected ‘a lot’ by

the recession. Finally, in a seemingly unrelated bivariate probit model, the ‘non-redundancy’ policy

action options are incorporated as additional explanatory variables into the estimation of whether

redundancy is adopted as a policy action to examine the nature of their inter-relationships with

redundancy. The results of this estimation suggest that the adoption of non-redundancy policy

actions are complements to the use of redundancy rather than alternatives to its use.

JEL Classification: M51 M54

Keywords: Redundancy: Workforce adjustment strategies: Labour hoarding: UK productivity puzzle

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REDUNDANCY AND THE GREAT RECESSION

INTRODUCTION

What has come to be referred to as the ‘great recession’ had its origins in 2007 in the subprime

mortgage crisis in the USA. Soon, that initial financial crisis was to spread throughout the

international financial system. In time, it reached the real economy. Across the member nations of

the OECD, the great recession was characterised by a decrease in GDP unprecedented in recent

history (van Ours, 2015). In the UK, the recession of 2008-9 was the worst experienced in the post

World War 11 period. Over six quarters, GDP fell six per cent. The recession proved to be both

longer and deeper that the recessions of the 1980s and 1990s (Gregg and Wadsworth, 2011). In

terms of the traditional labour market effects, and as direct and indirect consequences of

organisations’ workforce adjustment strategies, there was the expected reduction in the number of

hours worked. Nonetheless, the loss of employment was “rather benign” (Gregg and Wadsworth,

2011, p. 11). There was a re-structuring within the labour force in that the share of part time

working and self-employment both increased. Accordingly, and contrary to experiences in previous

recessions, the employment rate remained higher than expected and the unemployment rate lower

than expected if at the expense of a decrease in the rate of growth of labour productivity.

Productivity performance in Great Britain has been particularly weak after the 2008

recession, in contrast to the productivity experience of other countries, notably the USA (Ohanian,

2010). Prior to 2008, value added per worker hour grew at an estimated 2.64 per cent per annum.

Since 2008, productivity growth has been minimal. In the third quarter of 2016, productivity

measured in terms of output per worker hour was 15.5 percent below its pre-downturn trend.

Expressed otherwise, productivity would have been 18.4 percent higher had it followed its pre-

downturn trend (ONS, 2017).

‘Labour hoarding’ has been forwarded as one of several possible explanations of this

‘productivity puzzle’ (Barnett et al, 2014). Productivity growth tends to be pro-cyclical, reflecting

lower factor utilisation during periods when aggregate demand is decreasing. At this point in the

economic cycle, many firms are unable to dispose easily of potentially redundant capital. Instead,

their focus is upon making labour redundant. That many firms did not make labour redundant during

the years of the recession, opting instead for alternative adjustment strategies, is argued to be one

reason why productivity in recent years has not returned to its pre-downturn trend.

This paper contributes to the discussion of the phenomenon of labour hoarding by

examining its obverse viz. redundancy. It analyses responses made to two questions asked in the

management questionnaire of the 2011 Workplace Employment Relations Study (WERS, 2011).

These questions are:

“ …… can you tell me to what extent your workplace has been adversely affected by the

recent recession?” and

“ …. Which, if any, of these actions were taken by your workplace in response to the recent

recession?”1

1 Fieldwork for WERS, 2011 took place between March, 2011 and June, 2012, some time after the recession itself and during which many establishments ‘died’. These questions, therefore, were put to what would be described better as a sample of the population of establishments that survived the recession.

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The structure of the paper is as follows. Section 1 provides a context by surveying some

literature that discusses the adjustment strategies of organisations during periods of economic

contraction. Section 2 introduces the data set and presents a preliminary examination of the central

motivating questions. Section 3 examines the relationship between whether or not the recession

affected the workplace ‘a lot’ and the three redundancy variables viz. whether redundancy occurred

irrespective of its type; whether redundancy was compulsory; and whether redundancy was

voluntary. This section also describes the estimation strategy applied to examine this relationship.

Section 4 presents and discusses the results of the estimations. A final section concludes.

SECTION ONE: A CONTEXT

The phenomenon of labour hoarding was first articulated fully by Okun, when seeking to explain the

pro-cyclical nature of labour productivity in the USA (Biddle, 2014). According to Okun (1963), there

were four principal reasons why labour was not variable over the cycle viz. i.) ‘contractual

commitments’ (e.g. the contractual commitments associated with terms of employment, the costs

of severance pay etc.); ii.) ‘technological factors’ (e.g. indivisibilities of production that inhibit certain

types of labour input from being varied proportionately with output variations); iii.) ‘transaction

costs’ (associated with the firing then, perhaps, subsequent hiring (or re-hiring) of labour); and iv.)

‘acquired skills’ (that would be lost were it not possible to re-hire labour subsequent to the lay-off).

Contrary to the assumptions of the neo-classical theory of the firm, therefore, labour was a ‘quasi-

fixed factor (Oi, 1962). Moreover, as a workforce adjustment strategy, redundancy had its direct and

indirect costs to the organisation.

Redundancy, however, is but one strategic adjustment option open to organisations

confronted with what may be long term economic uncertainties.2 Figure 1 uses the possible actions

presented in the WERS, 2011 management questionnaire to create a taxonomy of workforce

adjustment strategies. There are two dimensions to the figure: the vertical reflects the traditional

macro-economic adjustment options of ‘prices’ or ‘quantities’; and the horizontal reflects

adjustment via either the organisation’s internal labour market or the labour market external to the

organisation.3 To illustrate: Redundancy – voluntary and involuntary – is an adjustment strategy that

involves a quantity adjustment where the consequences – with or without displacement (Chapman

and Tooze, 1982) – are manifest in the external labour market by generating an increase in the flow

off the stock of employment and, sometimes, an increase in the inflow onto the stock of

unemployment (Davis et al, 2006: Elsby et al, 2011: Smith, 2011). In contrast, cutting (or freezing)

wages or reducing the level of non-statutory non-wage benefits (such as bonuses or fringes) are

adjustment strategies that involve price adjustments where the consequences are manifest in the

internal labour market of the organisation. In principle, therefore, organisations have a range of

strategic adjustment options from which they can choose (Haskel et al, 1997).

Each adjustment option has different properties that will influence whether or not it is

adopted by the organisation, notably their probable (pecuniary and psychic), private benefits and

2 Confronted with economic uncertainty in the short run, some organisations may be able to adjust by reducing their product prices, thereby hoping to stimulate demand, or produce and store output as inventory (Sutherland, 1998). Some may be able to adjust using worker – initiated separations e.g. via a process of natural wastage (MacKay and Jones, 1989). 3 The list of adjustment strategies within WERS, 2011 is not exhaustive, but it does reflect similar work undertaken elsewhere (cf. Babecky et al, 2012).

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costs to the company4; their speed of implementation; and their revocability (Zagelmeyer et al,

2012). To illustrate: Bewley (1998) maintains that employers are reluctant to cut wages because they

believe doing so will have a detrimental effect on workforce morale. Similarly, Jeon and Shapiro

(2007) caution that firms must take into account the uncertainty of how much the possibility of

being made redundant tomorrow affects worker performance today. In contrast, Bennett (2011,

102) portraits redundancy as a potential “liquidity adjustment tool”, generating net liquidity to the

organisation by decreasing its direct and indirect wage levels. In organisations where employment

regulation is associated with managerial decision-making, wage freezes (if not wage cuts) may be

implemented readily whereas arranging voluntary and involuntary redundancy can prove time

consuming.5 Finally, workforce reductions may be economically inefficient. The loss of human capital

– and the human capital investments made - is irrevocable and the associated negative signalling is

detrimental (Zagelmeyer et al, 2012). Choosing redundancy or any other adjustment strategy,

therefore, may be likened to making an investment decision, although there are both rational and

institutional processes at work in the exercise (Sutherland, 1998).

An organisation’s workforce adjustment strategy, however, cannot be examined outwith the

context of its employment strategy (which, in turn, cannot be examined outwith the wider context

of its business strategy where this is appropriate) (Aston et al, 2017). Three ‘ideal type’ models of an

organisation’s employment strategy feature in the literature, each offering different perspectives

about how organisations view the workforce; achieve flexibility; and are likely to adjust to

recessionary conditions.6

In the first model, members of the workforce are employed on standard contracts of

employment and benefit from human resource management policies designed to enhance skills that

are closely aligned to the product/service knowledge of the organisation that must be sustained and

developed further. Additionally, commitment and engagement are encouraged. Flexibility is

achieved at the intensive margin via functional flexibility on the part of the appropriately trained

workforce. Adjustment is made via the internal labour market, for example work-sharing (Andrews

and Simmons, 2001) rather than labour shedding because of the human capital investments made.

In the second model, in contrast, members of the workforce are employed on non-standard

contracts of employment, often of a short-term duration, and receive minimal training. The

employment of contingent labour is a conscious low cost HR strategy (Forde et al, 2009). Flexibility is

achieved at the extensive margin. High levels of labour turnover (‘churning’) are prevalent. Firing

costs are negligible. Consequently, adjustment occurs via the external labour market following both

employee and employer initiated quits. The third model is a hybrid of the first and second models,

with its ‘core’ employees being equated with employees in the former and its ‘peripheral’

employees with employees in the latter. Employment flexibility is the accepted norm for the

peripheral worker, thereby increasing job stability for the core worker (Atkinson, 1985: Beatson,

1984: Cappelli and Neumark, 2004: Hirsch, 2016: Hunter et al, 1993: Kalleberg, 2001: and Stirpe et

al, 2014).

4 Rarely do the likely externalities i.e. the public benefits and costs come into the calculus. 5 In contrast, where unions participate in the rule making process, both the exercise and the outcome are more problematic. (cf. Roche et al (2015) and Zagelmeyer (2013) for an examination of concession bargaining during the recession in Ireland and Germany, respectively.) 6 ‘Ideal-type’ in the sense that the frameworks oversimplify the problematics of the real world of work.

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SECTION TWO: THE DATA SET AND THE CENTRAL MOTIVATING QUESTIONS

The data set analysed has its origin in responses made to questions posed in the management

questionnaire associated with the 2011 Workplace Employment Relations Study (hereafter WERS,

2011) (Department for Business, Innovation and Skills, Advisory, Conciliation and Arbitration Service,

National Institute of Economic and Social Research, 2015).7

WERS, 2011 is the sixth in a series of workplace surveys that map the changing contours of

employment relations in Britain (Brown et al, 2009). The population sampled was all workplaces in

Britain which had five or more employees operating in Sections C-S of the 2007 Standard Industrial

Classification (i.e. Agriculture and Mining are excluded), where a workplace was defined as

comprising the activities of a single employer at a single set of premises. The population sampled

accounted for 35 per cent of all workplaces in Great Britain and 90 per cent of all employees (van

Wanrooy et al, 2013).

Previous WERS-related studies had used two distinct samples. One was a new cross section

sample of workplaces. This sample was designed to provide representative results for the population

of workplaces in existence at the time of the survey. The other was a panel sample comprising

workplaces which had participated in the most recent previous cross section survey and which

remained in existence at the time of the new survey. This panel sample was established to examine

the extent to which - and the manner in which - individual workplaces had changed over time. The

two samples were analysed separately (cf. Kersley et al, 2006: Millward et al, 2000). The novel

design feature of the 2011 study was the integration of the new cross section sample with the panel

sample. Consequently, in the supporting literature, reference is made to what are identified as the

‘panel sample’; the ‘refreshment sample’; and the ‘combined sample’.

The 2011 sample design had two principal aims. The first was to obtain interviews at 900 of

the 2,295 workplaces that had participated in the cross section sample of 2004. These were to

constitute the ‘panel sample’. The second was to obtain interviews at a further 1,800 workplaces,

selected as a stratified random sample from the Inter Departmental Business Register maintained by

the Office for National Statistics. These were to constitute the ‘refreshment sample’. Taken together,

the ‘panel sample’ and the ‘refreshment sample’ constitute the ‘combined sample’.

Survey design took cognisance of workplace size and industry sector. The ultimate aim was

to select panel and refreshment samples, which, when combined, would generate a final sample

that had at least 250 workplaces in employee size bands: 5 -9; 10 – 24; 25 -49; 50 -99; 100 – 199; and

200 -499: at least 150 workplaces in employee size bands: 500 -999; 1000 -1999; and 2000 plus: and

7 The Workplace Employment Relations Study, 2011 was sponsored by: the Department for Business, Innovation and Skills (BIS), the Economic and Social Research Council (ESRC), the UK Commission for Employment and Skills (UKCES), the Advisory, Conciliation and Arbitration Service (ACAS) and the National Institute of Economic and Social Research (NIESR). The principal investigators were: BIS, ACAS, and NIESR. The data were collected by NatCen Social Research. The data were deposited at the UK Data Archive (UKDA) by BIS. The data were accessed via UKDA. Crown copyright is held jointly with ESRC, UKCES, ACAS and NIESR. Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland. None of the above parties bears any responsibility for the analysis of the data set undertaken or any interpretation made from this analysis. The bibliographic citation for this data collection is: Department for Business, Innovation and Skills, Advisory, Conciliation and Arbitration Service and National Institute of Economic and Social Research, Workplace Employee Relations Survey, 2011 [computer file]. Colchester, Essex: UK Data Archive [distributor], February, 2013. SN: 7226, http://dx.doi.org/10.5255/UKDA-SN-7226-1.

http://dx.doi.org/10.5255/UKDA-SN-7226-1

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a minimum of 85 cases in each industry sector. The sample design, therefore, gave an above average

probability of selection to larger workplaces and workplaces in less populated industries.8

At each participating workplace, the most senior manager responsible for employment

relations/human resources/personnel was interviewed. Prior to this interview, this manager was

asked to provide a demographic profile of the workplace. When combined, responses to the

interview schedule and the demographic profile of the workplace, is referred to as ‘the management

questionnaire’.

There were 2,668 observations in the original data set. There are 2,041 observations in the

working data set used in this investigation after observations that had incomplete information

across all the variables used in the analyses were dropped.9

Two questions asked in the survey of managers motivated the research:

“ … can you tell me to what extent your workplace has been adversely affected by the

recent recession?”

“ …. Which, if any, of these actions were taken by your workplace in response to the

recent recession?”

The percentage distribution of responses to the first question is presented in Table 1.

Somewhat contrary to popular perceptions at the time, not all establishments were affected by the

recession. 11.26 per cent suffered ‘no adverse effect’; and 18.22 per cent were affected ‘just a little’.

In contrast, 24.49 per cent were affected ‘quite a lot’; and 19.78 per cent were affected ‘a great

deal’. Table 2 offers an alternative perspective of these data, categorising responses in accordance

to whether or not an establishment was affected ‘a lot’ by the recession. Subsequently, this sub

division constitutes the dichotomous dependent dummy variable used in the bivariate probit

regressions.

By way of an important preliminary investigation, an ordered probit model was used to

identify the co-variates of the probability of the extent to which a workplace was affected by the

recession. The model applied conformed to convention and was presented as a latent variable

model (Long and Freese, 2014). Defining y* as this latent variable, which takes the values -∞ to ∞,

the corresponding structural model was:

yi* = Xiβ + εi

where ‘y’ is the extent to which a workplace was affected by the recession, ‘i’ is an observation, ‘X’ a

vector of independent variables, ‘β’ a set of coefficients to be estimated and ‘ε’ a random error

term. The independent variables in the estimation are identified in detail in Table 3. They include,

inter alia, variables which reflect the composition of the workforce at the workplace; the SIC of the

activity undertaken at the workplace; the formal (i.e. legal) status of the workplace; as well as a set

of ‘policy- relevant’ dichotomous dummy variables designed to encapsulate human capital

investment.

8 The resulting ‘combined sample’, therefore, is not representative of the total population of workplaces in Britain. Hence, analysis needs to make use of the appropriate weighting factor for each component of the survey, partly to account for the sampling bias in the original survey design and partly to account for variable rates of non-response in its components. 9 There is no evidence that the observations dropped were anything other than random.

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In the corresponding measurement model, y* was divided into J (in this instance four) ordinal

categories:

yi = m if Ƭm-1 ≤ yi* < Ƭm for m = J

where the cutpoints (or thresholds) Ƭ1 through to Ƭ J-1 were estimated.

The results of this estimation are presented in Table 3. The signs of the coefficients have a

qualitative interpretation i.e. positively (negatively) signed coefficients are associated with the

recession having greater (lesser) effects on the workplace. Few independent variables are

statistically significant (at p < 0.05). The tenor of the regression is best summarised by Table 4 which

reports the results of Wald tests of joint significance of selected sets of variables. Only one outcome

is statistically significant viz. that pertaining to the SIC activity undertaken. Generally, however, the

conclusion made is that if there is a pattern describing the extent to which workplaces were affected

differently by the recession, this pattern is not to be seen in the observed variables in the ordered

probit estimated.

In many respects, this outcome reflects a similar examination of how firms coped with the

recession of 1991 (Geroski and Gregg, 1996). Re-structuring is a central feature of recessions.

Product lives are both shortened and rationalised; aging capital is made redundant; workplaces

close; and organisations ‘die’. According to Geroski and Gregg, one of the most interesting features

of this process is its “selectivity” (p. 551). Consequently, “predicting which firms will be vulnerable to

recessionary pressures is very difficult” (p. 553).

Responses to the second question about the action taken at the workplace consequential of

the recession are presented in Table 5. In this context, an important early observation is that no

action was reportedly taken at (approximately) 25 per cent of workplaces. Consequently, the

incidence of action taken, by policy identified, was examined first for all workplaces then for that sub

population at which action was taken.

Reacting to the adverse economic conditions, managers implemented a diverse range of

adjustment strategies. Wages were either frozen or cut in 41.39 per cent of workplaces (cf. Table 5,

col. 2). Compulsory redundancies featured at 13.57 per cent of workplaces; voluntary redundancies

at 6.45 per cent; and redundancies of some sort at 17.25 per cent. In the workplaces where action

was taken, more than half (55.56 per cent) opted to freeze or cut wages. 23.21 per cent of

workplaces implemented redundancies of some sort (at 18.22 per cent of workplaces redundancy

was compulsory; at 8.66 per cent it was voluntary) (cf. Table 5, col 4). Excepting the policy of

implementing a wage cut/freeze, four policies were more prevalent than redundancy as managers

responded to the adverse consequences of the recession viz. a temporary freeze on recruitment to

fill vacant posts (37.02 per cent); a change in the organisation of work (33.13 per cent); a

postponement of plans to expand the workforce (29.84 per cent); and a reduction in paid overtime

(24.45 per cent). In contrast, of the other actions identified only 3.86 per cent of workplaces

required their employees to take unpaid leave; and only 3.89 per cent increased their use of agency

or temporary staff (although the use of agency and temporary staff was reduced in 20.23 percent of

workplaces).

In the context of both workplaces that did take action and the taxonomy of adjustment

options presented in Figure 1, therefore, the most prevalent action was a price adjustment affecting

the internal labour market (i.e. the freeze or cut in wages implemented at more than half of the

workplaces in question). Quantity adjustments within the internal labour market were also made,

however, most notably changes in work organisation. Nonetheless, adjustment strategies that

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impacted upon the external labour market featured in (approximately) one in three/four/five

workplaces.

That 25 per cent of workplaces took no action warranted further exploration. Consequently,

to investigate the possible co-variates of the probability that a workplace took no action a binomial

probit model was estimated. Again the model applied conformed to convention. It was presented as

a latent variable model (Long and Freese, 2014). Defining y* as this latent variable, the

corresponding structural model is:

yi* = Xiβ + εi

where ‘y’ is whether a workplace took no action, ‘i’ is an observation, ‘X’ a vector of independent

variables, ‘β’ a set of coefficients to be estimated and ‘ε’ a random error term. The vector of

independent variables used in this regression was the same as that used in the previous ordered

probit.

The results are presented in Table 6A. However, a more informed perspective is again to be

observed in the outcome of tests of the joint significance of sets of variables (cf. Table 6B). Whether

a workplace took no action is associated with the SIC of the activity undertaken and its legal status.

Subsequently, the binomial probit was re-estimated with the inclusion of dummy variables denoting

the extent to which the workplace was affected by the recession. These results are reported in Table

6C. The extent to which the adverse effects of the recession impacted upon the workplaces’ decision

to act is very apparent from these results. The greater the impact of the recession the less probable

that the workplace took no action.

SECTION THREE: THE BIVARIATE PROBIT MODEL AND THE ESTIMATING STRATEGY

The principal focus of this section is the nature of the relationship between whether or not the

recession affected the workplace ‘a lot’ and the three redundancy variables viz. whether redundancy

occurred irrespective of its type; whether redundancy was compulsory; and whether redundancy

was voluntary.

First, preliminary descriptive statistics are presented in Tables 7, 8, 9, and 10. Three

observations are made from these four tables. First, even although workplaces were affected ‘a lot’

by the recession, nonetheless redundancy of the three sorts under discussion was an adjustment

option employed at only a minority. In the context of redundancy of any sort, this was not used in 71

per cent of workplaces: in the context of voluntary redundancy, this was not used in 89 per cent: and

in the context of compulsory redundancy, this was not used in 77 per cent. Secondly, even although

workplaces were not affected ‘a lot’ by the recession, nonetheless, redundancy of each sort

occurred at some workplaces. In the context of redundancy of any sort, this was used at 8 per cent

of workplaces: in the context of voluntary redundancy, this was used at 3 per cent; and in the

context of compulsory redundancy, this was used at 6 per cent. Thirdly, there is a statistically

significant (and positive from coefficients reported in Table 8) association between whether a

workplace was affected ‘a lot’ by the recession and each of the three sorts of redundancies.

The conclusion made from these three observations is that the application of a bivariate

probit model would be an appropriate estimation strategy to examine the nature of the

relationships between whether a workplace was affected ‘a lot’ by the recession and the three

redundancy variables.

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The essence of a bivariate probit model is that it takes two independent binary probit

models and estimates them simultaneously, allowing for the possibility of a correlation between the

error term (ρ) in the two estimations. Should the error term prove to be statistically significantly

different from zero, the two binary models should be estimated separately. However, should ρ prove

to equal zero, the two separate probits are nested in the bivariate probit model and the assumption

is made that there are unobservable factors pertaining to workplaces that influence whether a

workplace was affected ‘a lot’ by the recession and its decision to implement redundancy.

In terms of the conventional model (cf. Cameron and Trivedi, 2010):

Y*1 = x1β1 + ε1

Y*2 = x2β2 + ε2

Where x is a set of independent variables, β a set of coefficients to be estimated and ε an error term.

Y*j are unobservable and are related to the binary dependent variables yj by the following rule:

Yj = 1 if y*j > 0 but = 0 if y*j ≤ 0

Bivariate probits for the relationship between whether a workplace was affected ‘a lot’ by

the recession and each of the identified adjustment options were estimated (although only the

results of the three redundancy options are presented in the paper). With two binary outcomes, four

mutually exclusive outcomes are observed. Accordingly, for each estimation, predicted probabilities

were calculated. Finally, in a seemingly unrelated bivariate probit model, the ‘non-redundancy’

adjustment options were added as independent variables in the second equation of whether

redundancy of any sort occurred to examine the nature of their inter-relationship with the

dependent variable.

SECTION FOUR: RESULTS

The results of the estimation of whether a workplace was affected by the recession ‘a lot’ and

whether redundancy of any sort was implemented; and whether the redundancy that occurred was

compulsory; and whether the redundancy that occurred was voluntary are presented in Tables 11,

12 and 13, respectively.10

Two preliminary observations are made about these three estimations. First, in each

estimation, ρ is positively signed and is statistically different from zero. Therefore, the strategy of

estimating a bivariate probit rather than two binomial probits was warranted. Further, the

unobserved factors that influence whether or not a workplace was affected by the recession ‘a lot’

and whether redundancy, of any sort, occurred are positively related. Secondly, and not

unexpectedly, the outcomes of the independent variables of the binomial regression of whether the

workplace was affected ‘a lot’ by the recession were very similar to those of the previous ordered

probit estimation of the probability of the extent to which a workplace was affected by the recession

in that no pattern was discernible.

In each of the three bivariate estimations, redundancy in general is less probable in smaller

workplaces but more probable in larger workplaces (relative to the reference category of a

workplace of 50 – 99 employees), presumably because of the scope and opportunity to implement

10 Results are given a qualitative interpretation because marginal effects are not calculated.

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this adjustment strategy is greater in larger workplaces. Turnbull and Wass, 1997, p. 38) have argued

that the distinction made between compulsory and voluntary redundancy is often spurious because

of the way in which management may “impose changes in the labour process to ‘encourage’ certain

groups to ‘volunteer’ for redundancy”. Nonetheless, some – if admittedly very few - differences are

to be observed between the respective regression results that offer an insight into experiences in

the public sector. In the context of compulsory redundancy, this is less probable in workplaces that

are in the Nationalised Industries, Public Sector Agencies and QUANGOs (relative to the reference

category of a PLC). In the context of voluntary redundancy, this is less probable in workplaces that

are Co-ops/mutuals but more probable in workplaces that are Other Non-trading public companies

or in local/central government (again relative to the reference category of a PLC). In many instances,

therefore, these particular results echo the comments made by Bach and Stroleny (2013, p. 349)

about public service employment restructuring during the recession that “The majority of

redundancies have occurred on a voluntary basis or by the use of early retirement schemes, but

mandatory redundancies have been implemented, traditionally a very rare occurrence in the public

sector.” The HR policy variables – selected to denote human capital investments and, therefore,

acting to constrain if not necessarily deter the use of redundancy as an adjustment strategy - prove

to be of little consequence.

Predicted probabilities for each of the possible policy actions were calculated from a series

of bivariate probit estimations. These results are presented in Table 14. With two binary variables

four outcomes are observed and they are presented in terms of whether or not action was taken at

the workplace by whether or not the workplace was affected ‘a lot’ by the recession.

Columns 3 and 5 of Table 14 are the columns of consequence. They suggest two different

stories about the predicted probability of a workplace using redundancy as an adjustment strategy in

response to the effects of the recession. First, when the workplace was not affected ‘a lot’ by the

recession, redundancy ranks sixth in the list of the possible adjustment responses (after

freezing/cutting wages; freezing recruitment to fill vacancies; reducing the use of agency staff or

temporary workers; changing the organisation of work; and reducing training expenditures.

However, when the workplace was affected ‘a lot’ by the recession, redundancy increases in relative

importance and ranks third in the list of adjustment options (after freezing/cutting wages and

freezing recruitment to fill existing vacancies). Moreover, the proportionate increase in the

predicted probability of compulsory redundancy is greater than it is for voluntary redundancy.

Irrespective of the extent to which the workplace was affected by the recession, therefore,

workplaces had two preferred adjustment options viz. one a ‘price’ adjustment with its impact upon

the internal labour market; and the other a ‘quantity’ one with its impact upon the external labour

market. Redundancy, especially compulsory redundancy, (a ‘quantity’ adjustment strategy with its

impact upon the external labour market) only becomes of consequence when the workplace is

affected ‘a lot’ by the recession.

Finally, to examine the nature of the relationship between the 12 non-redundancy

adjustment strategies and redundancy, the 12 other actions that a workplace could take were

incorporated as additional regressors in a seemingly unrelated bivariate probit estimation of

redundancy. The results are presented in Table 15. The coefficients of four of the additional

regressors are negatively signed. Only one of which, however, viz. some other action was

implemented is statistically significant (at p > 0.05). Of the positively signed coefficients, four are

statistically significant viz. a freeze on recruitment; a wage freeze; a reduction in the number of

hours worked; and a change in the organisation of work, suggesting that the adoption of these four

11

non-redundancy adjustment strategies are complements to the use of redundancy rather than

alternatives to its use.

CONCLUSIONS

In a contribution to the discussion about the possible role of labour hoarding in explaining the UK’s

current productivity puzzle, this paper has examined its obverse viz. redundancy. It has analysed

responses to two questions in the WERS, 2011 survey of managers viz. “ .. can you tell me to what

extent your workplace has been adversely affected by the recent recession?” and “ which, if any, of

these actions were taken by your workplace in response to the recent recession.

Given the data set under analysis, two important qualifications are made at the outset. The

first is that fieldwork for the survey took place between March 2011 and June 2012. Had this been

conducted three/four years earlier, nearer to the time of the recession when some workplaces were

striving to survive the recession and some were not succeeding in doing so, it is quite likely that the

population sampled and the responses of the sampled population to these and other questions

would have been different. How different is an unknown, but not unimportant. The second is that

what is being examined in the context of the second question is the incidence of redundancy and the

other policy actions adopted at the workplace. It is not the extent of redundancy nor its potential

costs savings to the workplace, information perhaps more appropriate to investigating labour

hoarding.

Nonetheless, some salient conclusions may be made from the research investigation. The

first is that not all workplaces were affected equally by the recession, although just over four in ten

workplaces were affected ‘a lot’. Second, not all workplaces chose to implement the actions

specified consequential of the recession. No action was taken at 25 per cent of workplaces, although

the probability of a workplace taking no action decreased the greater the adverse effect of the

recession on the workplace. Third, for those workplaces at which action was taken, 23.17 per cent of

workplaces used redundancy as an adjustment strategy. (Compulsory redundancy took place at

18.26 per cent of workplaces and voluntary redundancy at 8.66 per cent.) The incidence of

redundancy, however, was much less than the incidence of several other policy actions, notably

cutting/freezing wages (which took place at 55.56 per cent of workplaces) and halting recruitment to

fill vacant posts (which took place at 37.02 per cent of workplaces).

In principle, a workplace has a range of possible adjustment strategies from which to

choose. The argument is that these strategies have either a ‘price’ or a ‘quantity’ dimension and

impacts that are manifest in either the internal labour market of the workplace or its external labour

market. The assumption is that a workplace chooses an adjustment strategy most appropriate to its

circumstances. Further, its choice of adjustment strategy may change with changes in these

circumstances. An important fourth conclusion from the research was that when a workplace was

not affected ‘a lot’ by the recession, redundancy ranked only sixth in the list of possible adjustment

responses. However, when a workplace was affected ‘a lot’ by the recession, redundancy increased

in its relative importance to rank third in the list of adjustment options. Nonetheless, even in these

more fraught circumstances, redundancy still ranked only third (after freezing/cutting wages and

halting recruitment to fill existing vacancies). Finally, when redundancy was used as an adjustment

strategy, it was observed to be used mostly in conjunction with, not as an alternative to, other

strategies, in particular strategies such as freezing recruitment, work-sharing and changing the

organisation of work.

12

That redundancy was a relatively unimportant adjustment strategy for many workplaces is

compatible with labour hoarding. Both in the private sector, where workplaces were confronted

with the consequences of decreases in their product demand, and in the public sector, where

workplaces faced the financial consequences of the government’s policy of fiscal consolidation,

workplaces appeared to adopt adjustment strategies such as freezing recruitment and wages rather

than declaring redundancies. The apparent preference was to retain rather than to release labour.

That this outcome is ‘compatible’ with labour hoarding, however, is not in itself ‘evidence’ of labour

hoarding.

It is difficult, conceptually and empirically, to make the transitions first from the incidence of

redundancy to labour hoarding and then from labour hoarding to labour productivity. The incidence

of redundancy as a workforce adjustment strategy is capable of estimation, given an appropriate

data set, something that has been established in this paper. In contrast, labour hoarding is a concept

from macroeconomics used to explain why labour productivity is pro-cyclical and not counter-

cyclical. As the debate about the ‘productivity puzzle’ demonstrates, it has come to be applied to the

economics of the workplace. Problematical in its meaning, however, it is not amenable to

measurement, especially at the level of the workplace. Nor can labour productivity be measured

directly at the level of the workplace. Rather, it is a derived statistic, obtained from statistics of

output and labour input, and also fraught with problems of meaning and measurement.

All that this paper can safely conclude, therefore, is that redundancy was a relatively

unimportant adjustment strategy for many workplaces in their response to the great recession.

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15

Figure 1. A Taxonomy of Workforce Adjustment Strategies

Freeze or cut in wages Reduction in non-wage benefits Reduction in training expenditures

Reduction in basic hours Reduction in paid overtime Use of unpaid leave Change in the organisation of work

Voluntary and involuntary redundancy Freeze on recruitment Postponement of employment expansion Decrease (increase) in use of agency staff

PRICES

QUANTITIES

EXTERNAL LABOUR MARKET INTERNAL LABOUR MARKET

16

TABLES

Table 1. Percentage Distribution of the Extent to Which Workplaces Were Adversely Affected by the Recession

The extent to which the workplace was affected Percent

No adverse effect 11.26

Just a little 18.22

A moderate amount 26.25

Quite a lot 24.49

A great deal 19.78

Total Number of Observations 2041

Table 2. Percentage Distribution of the Extent to which Workplaces Were Affected ‘a Lot’ Whether or not the workplace was affected ‘a lot’ Percent

Not affected ‘a lot’ 55.73

Affected ‘a lot’ 44.27

Total Number of Observations 2041

17

Table 3. Ordered Probit Regression Results: Dependent Variable: The Extent to which a Workplace was Affected by the Recession

Variable Coefficient Robust SE

P > |T|

Workplace Size Categories Less than 25 employees

.159

.095

0.096

Between 25 and 49 employees .172 .106 0.105

Between 50 and 99 employees (the reference category)



500 or more employees .249 .141 0.078

Single/multi plant nature of the workplace One of a number of workplaces in the UK

.160

.101

0.111

Single independent establishment (the reference category)

Sole UK establishment of a foreign organisation -.150 .248 0.546

Legal Status of the Workplace Public Limited Company (PLC) (the reference category)

.058

.128

0.645

Private Limited Company .167 .224 .0.455

Company Limited by Guarantee .264 .174 0.131

Partnership -.165 .198 0.403

Trust/charity .164 .627 0.793

Body Established by Royal Charter -.1015 .437 0.020

Co-operative/Mutual/Friendly Society .357 .316 0.259

Government Owned Limited Company (Nationalised Industry) .176 .319 0.582

Public Service Agency .198 .283 0.483

Other Non-trading Public Corporation .198 .283 0.483

QUANGO .361 .243 0.138

Local/Central Government -.064 .207 0.757

HR Policy IIP accredited (=1)

-.196

.099

0.048

New staff require 6 months to do the job competently (=1) .146 .108 0.177

More than 50 per cent of employees have received off-the-job Training (=1)

-.076

.085

0.375

More than 60 per cent of employees are trained to do Another job (=1)

-.027

.095

0.777

/cut 1 -.791 .252

/cut 2 -.079 .252

/cut 3 .644 .251

/cut 4 1.385 .255

Number of observations 2041

Wald Chi2 (56) = 100.68

Prob > chi2 = 0.0002

Pseudo R2 = 0.0299

Footnote to Table 3 and all subsequent tables presenting regression results: Additionally, the model estimated included a set of variables reflecting the composition of the workforce at the workplace (being variables denoting the proportion of women employed; the proportion employed in the ‘lower’ occupational categories; the proportion of part time workers; the proportion of ‘young’ workers; the proportion of workers who were members of ethnic minorities; the proportion of workers holding fixed term contracts; the proportion of workers who were ‘low’ paid; and the proportion of workers who were agency staff); a dummy variable denting that 60 per cent of employees were covered by collective agreements; and the Standard Industrial Classification (i.e. SIC 2007) of the workplace (by means of 15 dummy variables).

18

Table 4. Results of the Tests of Joint Significance of the Sets of Variables as Identified Variable Set Chi Square Prob > Chi2

The variables reflecting the composition of the workforce At the workplace

(8) = 9.83 0.2771

The variables denoting workplace size categories (5) = 6.14 0.2932

The variables denoting the Standard Statistical Region of the location of the workplace

(9) = 11.60 0.2367

The variables denoting the SIC of the activity undertaken At the workplace

(16) = 29.65 0.0199

The variables reflecting the single/multi plant nature of The workplace

(2) = 3.41 0.1817

The variables denoting the formal (legal) status of the workplace

(11) = 18.01 0.0812

19

Table 5. Action Taken by Workplaces in Response to the Recession (weighted) Action Taken All workplaces: Per

cent Workplaces that took action: Per cent

Compulsory redundancies 13.57 18.23

Voluntary redundancies 6.45 8.66

Redundancies, whether compulsory or voluntary * 17.25 23.17

Temporary freeze of recruitment to fill vacant posts 27.56 37.02

Postponement of plans for expanding the workforce 22.28 29.84

Freeze or cut in wages 41.39 55.56

Reduction in non-wage benefits 6.90 9.21

Reduction in basic hours 13.94 18.73

Reduction in paid overtime 18.34 24.55

Employees required to take unpaid leave 2.85 3.86

Reduction in the use of agency staff or temporary workers

15.06 20.23

Increase in the use of agency staff or temporary workers

2.90 3.89

Reduction in training expenditure 16.62 22.32

Change in the organisation of work 24.67 33.13

Some other action 2.98 4.00

None 25.56

Number of Observations 2041 1664

*This action is calculated from responses to ‘compulsory redundancies’ and ‘voluntary redundancies’

20

Table 6A. Binomial Probit Regression Results: Dependent Variable: Whether a Workplace took no action


P > |T|


.016

.149

0.913

Between 25 and 49 employees -.084 .166 0.613




500 or more employees -.234 .240 0.329


-.243

.129

0.060




Private Limited Company .067 .154 0.660

Company Limited by Guarantee -.460 .370 0.214

Partnership -.148 .222 0.505


Body Established by Royal Charter

Co-operative/Mutual/Friendly Society 1.266 .446 0.005


Public Service Agency -.851 .451 0.059

Other Non-trading Public Corporation 1.207 .601 0.045

QUANGO



.167

.141

0.236

New staff require 6 months to do the job competently (=1) -.054 .146 0.710


.205 .116 0.064


.179 .121 0.139

Constant -.805 .367 0.028


Wald Chi2 (54) = 105.59

Prob > chi2 = 0.0000

Pseudo R2 = 0.0931

Additional footnote to Table 6A and 6C: The dummy variables ‘Body established by Royal Charter’ and QUANGO predict failure perfectly, consequently they – and 22 observations – are not used.

21

Table 6B. Results of the Tests of Joint Significance of the Sets of Variables as Identified

Variable Set Chi Square Prob > Chi2

The variables reflecting the composition of the workforce At the workplace

(9) = 5.44 0.7949

The variables denoting workplace size categories (5) = 2.23 0.8161

The variables denoting the Standard Statistical Region of the location of the workplace

(9) = 11.11 0.2684

The variables denoting the SIC of the activity undertaken At the workplace

(16) = 26.38 0.0489

The variables reflecting the single/multi plant nature of The workplace

(2) = 4027 0.1180

The variables denoting the formal (legal) status of the workplace

(9) = 25.89 0.0021

22

Table 6C. Binomial Probit Regression Results: Dependent Variable: Whether a Workplace took no action with the incorporation was dummy variables denoting the extent to which the workplace was affected by the recession


P > |T|


.117

.164

0.477





500 or more employees -.122 .256 0.634


-.184

.137

0.181






Partnership .039 .240 0.870


Body Established by Royal Charter

Co-operative/Mutual/Friendly Society .934 .398 0.019




QUANGO



.081

.152

0.591



.195 .126 0.121


.182 .136 0.183

Extent to which workplace was adversely affected by The recession Just a little

-.615

.203

0.002

A moderate amount -1.002 .193 0.000

Quite a lot -1.827 .204 0.000

A great deal -2.228 .262 0.000

Constant -.179 .419 0.665


Wald Chi2 (58) = 225.64

Prob > chi2 = 0.0000

Pseudo R2 = 0.2625

23

Table 7. Cross Tabulation of whether the workplace was affected ‘a lot’ by the recession and redundancy, of either sort

No redundancy Redundancy Total

Not affected a lot by the recession 46.97 0.51 0.91

4.07 0.04 0.08

48.04 0.55 1.00

Affected a lot 27.37 0.31 0.71

10.80 0.12 0.28

38.17 0.44 1.00

Total 71.34 0.82 0.82

14.87 0.17 0.17

86.22 1.00 1.00

Key (to Tables 7, 8, and 9): weighted counts cell proportions row proportions Pearson:

Uncorrected chi2 (1) = 138.3285 Design-based F(1, 2040) = 64.0841 : p = 0.0000

Table 8. Cross Tabulation of whether the workplace was affected ‘a lot’ by the recession and voluntary redundancy

No voluntary redundancy

Voluntary Redundancy

Total


1.51 0.01 0.03

48.04 0.55 1.00


4.04 0.04 0.10

38.17 0.44 1.00

Total 80.65 0.93 0.93

5.56 0.06 0.06

86.22 1.00 1.00

Pearson:


24

Table 9. Cross Tabulation of whether the workplace was affected ‘a lot’ by the recession and compulsory redundancy

No compulsory redundancy

Compulsory Redundancy

Total


3.11 0.03 0.06

48.04 0.55 1.00


8.58 0.09 0.22

38.17 0.44 1.00

Total 74.52 0.86 0.86

11.70 0.13 0.13

86.22 1.00 1.00

Pearson:


Table 10. Values of the Respective Redundancy Coefficients in (three separate) linear regressions of whether the workplace was affected ‘a lot’ by the recession

Variable Coefficient P > |t|

Redundancy, of any sort 0.3422 0.0000

Voluntary redundancy 0.3050 0.0000

Compulsory redundancy 0.3370 0.0000

25

Table 11. Bivariate Probit Estimation: Dependent Variables: ‘Whether the workplace was affected ‘a lot’ by the recession’ and ‘Whether a policy of redundancy of any sort was implemented’


P > |T|

Whether the workplace was affected a lot by the recession


.161

.121

0.186







.113

.118

0.336




Private Limited Company -.162 .145 0.263


Partnership -.012 .208 0.954

Trust/charity -304 .262 0.246

Body Established by Royal Charter .447 .738 0.545

Co-operative/Mutual/Friendly Society -.899 .472 0.057




QUANGO 1.503 .624 0.016



-.270

.119

0.023



-.018 .100 0.854


-.030 .109 0.778

Constant -.599 .306 0.050

26

Table 11. cont. Variable Coefficient Robust

SE P > |T|

Whether the workplace implemented redundancy of any sort


-.562

.148

0.000







.209

.129

0.106


Sole UK establishment of a foreign organisation .000 .335 0.999





Trust/charity -.160 .260 0.538






QUANGO -.096 .850 0.910

Local/Central Government .233 .237 0.325


-.070

.130

0.587



-.156 .110 0.154


-.011 .114 0.920

Constant -.052 .320 0.870

/athro .604 .065 0.000

rho .540 0.046


Wald Chi2 (112) = 388.95

Prob > chi2 = 0.0000

Wald test of rho = 0 : chi2 (1) = 86.5276 : Prob > chi2 = 0.0000

27

Table 12. Bivariate Probit Estimation: Dependent Variables: ‘Whether the workplace was affected ‘a lot’ by the recession’ and ‘Whether a policy of compulsory redundancy was implemented’


P > |T|



.161

.122

0.188







.116

.118

.0.325






Partnership -.013 .207 0.948







QUANGO 1.429 .626 0.023



-.272

.119

0.022



-.022 .100 0.823


-.029 .109 0.787

Constant -.596 .306 0.051

28


SE P > |T|

Whether the workplace implemented compulsory redundancies


-.481

.171

0.005







.203

.137

0.139






Partnership -.011 .238 0.962




Government Owned Limited Company (Nationalised Industry) -.931 .364 0.011

Public Service Agency -1.816 .344 0.000


QUANGO -2.384 .534 0.000



-.128

.144

0.375



-.182 .119 0.126


-.106 .125 0.394

Constant -.117 .345 0.733

/athro .553 .068 0.000

rho .503 .051


Wald Chi2 (112) = 414.36

Prob > chi2 = 0.0000


29

Table 13. Bivariate Probit Estimation: Dependent Variables: ‘Whether the workplace was affected ‘a lot’ by the recession’ and ‘Whether a policy of voluntary redundancy was implemented’


P > |T|



.170

.124

0.171







.111

.296

0.053






Partnership -.018 .206 0.929







QUANGO 1.466 .627 0.019



-.266

.119

0.025



-.018 .100 0.854


-.032 .109 0.767

Constant -.603 .305 0.048

30


SE P > |T|

Whether the workplace implemented voluntary redundancies


-.672

.161

0.000







.177

.145

0.224









Co-operative/Mutual/Friendly Society -5.286 .509 0.000




QUANGO .591 .713 0.407



.068

.125

0.582



.046 .121 0.701


.168 .147 0.252

Constant -1.312 .362 0.000

/athro .545 .070 0.000

rho .496 .053


Wald Chi2 (112) = 1943.72

Prob > chi2 = 0.0000


31

Table 14. Predicted Probabilities from the Bivariate Probit Estimations of the Policy Action Taken ‘Action’ Not affected ‘a lot’ by the recession Affected ‘a lot’ by the recession

No action taken Mean (SD)

Action taken Mean (SD)

No action taken Mean (SD)

Action taken Mean (SD)

Redundancy, of any sort .4629 (.1505) .1034 (.1094) .2482 (.1454) .1853 (.1277)

Compulsory redundancy .5026 (.1495) .0643 (.0743) .3019 (.1434) .1337 (.1182)

Voluntary redundancy .4942 (.1512) .0721 (.1072) .3161 (.1665) .1175 (.1154)

Temporary freeze on recruitment to fill vacancies

.3926 (.1600) .1733 (.1307) .2164 (.1277) .2176 (.1328)

Postponement of plans to expand workforce

.4780 (.1369) .0880 (.0684) .2734 (.1258) .1604 (.1018)

Freeze or cut in wages .3567 (.1520) .2084 (.1501) .1771 (.1185) .2576 (.1231)

Reduction in non-wage benefits

.5491 (.1393) .0181 (.0312) .3661 (.1447) .0665 (.0619)

Reduction in basis hours .5350 (.1458) .0306 (.0451) .3564 (.1436) .0778 (.0743)

Reduction in paid overtime .4734 (.1530) .0916 (.0846) .2796 (.1343) .1552 (.1191)

Employees required to take unpaid leave

.5553 (.1486) .0111 (.0212) .4035 (.1349) .0330 (.0537)

Reduction in use of agency staff or temporary workers

.4063 (.1605) .1599 (.1326) .2822 (.1450) .1514 (.1209)

Increase in the use of agency staff or temporary workers

.5425 (.1404) .0235 (.0476) .4002 (.1514) .0336 (.0498)

Reduction in training expenditure

.4550 (.1371) .1118 (.0994) .2833 (.1418) .1497 (.0937)

Change in the organisation of work

.4284 (.1342) .1369 (.1055) .2504 (.1333) .1841 (.0964)

Some other action affecting the workforce

.5544 (.1443) .0116 (.0232) .4077 (.1433) .0261 (.0398)

32

Table 15. Seemingly Unrelated Bivariate Probit Regression: Dependent Variables: ‘Whether the workplace was affected ‘a lot’ by the recession’ and ‘Whether a policy of redundancy of any sort was implemented’ (with additional independent variables denoting the 12 ‘non-redundancy’ adjustment options


P > |T|



.059

.093

0.525

Between 25 and 49 employees -.093 .103 .367






-.012

.073

0.864













QUANGO .797 .541 0.141



-.041

.066

0.536



.009 .062 0.884


-.048 .069 0.488

Constant -.456 .193 0.019

33


SE P > |T|

Whether the workplace implemented redundancy of any sort


-.384

.114

0.001







.020

.088

0.819













QUANGO .224 .497 0.651



.139

.076

0.069



-.114 .074 0.122


-.097 .086 0.256

Temporary freeze on recruitment .528 .075 0.000

Postponement of plans to expand workforce .127 .077 0.099

Freeze or cut in wages .248 .075 0.001

Reduction in non-wage benefits .226 .118 0.055

Reduction in basic hours .371 .112 0.001

Reduction in paid overtime .048 .079 0.537

Employees require to take unpaid leave -.052 .169 0.759

Reduction in use of agency staff or temporary workers .152 .080 0.056

Increase in the use of agency staff or temporary workers -.061 .141 0.655

Reduction in training expenditure -.009 .080 0.903

Change in the organisation of work .434 .074 0.000

Some other action -.675 .184 0.000

Constant -.599 .232 0.010

/athro .359 .048 0.000

rho .344 .042


Wald Chi2 (124) = 546.34

Prob > chi2 = 0.0000

34

Wald test of rho = 0 : chi2(1) = 55.3238 : Prob > chi2 = 0.0000

redundancy and the great recession john sutherlandemail: [email protected] abstract...

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