The Effects of Institutional and Organizational Characteristics on Work Force Flexibility: Evidence from Call Centers in Three Liberal Market Economies

Abstract

This comparative study examines survey data from 464 call centers in the United States, 167 in the United Kingdom, and 387 in Canada to explore two questions: whether institutional differences shape employers' choices of ways to improve work force flexibility, both numerical and functional; and whether strategies for numerical flexibility and functional flexibility are related. The results suggest that institutional differences across these liberal market economies—specifically, in dismissal regulations and union strength—did affect how employers chose to achieve work force flexibility. For example, the use of part-time workers was more common in countries with more stringent rules regulating dismissals. Organizational characteristics also mattered, with outsourced firms being more likely than in-house firms to use part-time workers. Evidence also suggests that managers used numerical flexibility and functional flexibility strategies as substitutes: higher employee job discretion was associated with both lower dismissal rates and a lower likelihood of temporary use.