Restructuring,Redeployment and Job Churning within Internal Labour Markets

Abstract

This article explores the phenomenon of recurrent internal redeployment, through a case study of restructuring at a UK based steel firm. While redeployment reflected one of the key functions of the traditional internal labour market at SteelCo, frequent restructuring events meant some workers experienced redeployment on a recurrent basis. For these workers the experience of repeated redeployment was analogous to churning in and out of jobs on the external labour market. Adapting this term to internal organisational processes, the article presents a new way of analysing recurrent redeployment through the formulation of the concept of Internal Labour Market Churn. This new contribution to internal labour market theory highlights problems with human capital development, career progression and in-work insecurity associated with internal churning, which tarnishes the sense of mutual commitment traditionally associated with and engendered by internal labour markets.

Introduction

Internal labour markets (ILMs) remain the locus of employment outcomes in many organisations, with administrative rules, structures and practices supplanting market forces in the allocation of labour (Bidwell and Mollick, 2015; McLachlan et al., 2021; Osterman, 2011). Although the distinction from the logic of the external labour market has been increasingly blurred by the introduction of competitive imperatives (Grimshaw et al., 2001; Lovering, 1990), in the context of long-term employment relationships ILMs both reflect and engender notions of mutual commitment. ILMs also provide the key redistributive mechanism for the internal movement of workers between jobs within organisations (Bidwell and Keller, 2014; Bidwell and Mollick, 2015; McLachlan et al., 2021). The focus of this article is the redistributive function of ILMs in the context of organisational restructuring, a time in which the administrative process for the redeployment of labour is brought into sharp relief. Through the lens of ILM theory, we explore the issue of internal redeployment, and specifically address the phenomenon of recurrent redeployment and its consequences for workers and organisations.

Internal redeployment is relatively under-researched despite its increasing prevalence (CIPD, 2020a). In the UK context, redundancy legislation requires employers to consider offering affected workers suitable, internal, alternative employment. The most recent Workplace Employment Relations Survey (WERS) data cited 14% of employers used redeployment in response to restructuring (WERS, 2011); and in the context of the COVID-19 crisis, 37% of employers reported using redeployment as a tactic to stave off redundancies (CIPD, 2020b). Data from the European Restructuring Monitor (ERM) demonstrate an overall upward trend over the past two decades, with significant spikes associated with major economic crises, as experienced twice over this period (ERM, 2021). In a context in which frequent organisational restructuring has been normalised as management strategy (Cappelli, 1999; McLachlan et al., 2019), the possibility that workers may experience redeployment on multiple occasions is heightened and warrants further attention.

Based on a case study of a large UK based steel firm, SteelCo, this article examines the operation of the internal redeployment process in the context of major restructuring events. The study identifies the unintended consequences that emerge through some workers’ multiple experiences of the redistribution process. These workers endured experiences analogous to churning in and out of jobs on the external labour market. By adapting churning to internal organisational processes, the article presents a new way of analysing the underexplored phenomenon of recurrent redeployment through the formulation of the concept of internal labour market churn. We define ILM churn as the experience of moving in and out of jobs within an internal labour market as a consequence of recurrent redeployment. Although there are clear differences from external churning, most notably the continuation of tenure, the negative consequences associated with churning on the external labour market were mirrored in the experiences of workers churning on the internal labour market. The repeated changing of roles associated with internal churning led to perceptions of damage to career progression, constraints on human capital development and heightened in-work insecurity. This contribution to ILM theory therefore sheds light on the potentially adverse effects of recurrent redeployment, the importance of which lies in the way internal churning can tarnish the sense of mutual commitment traditionally associated with the operation of an internal labour market.

Following a review of debates and discussion of methods, findings from the case are presented. The findings analyse redeployment at SteelCo through the lens of ILM theory, and explore the experiences of workers who have been subject to recurrent redeployment and internal churning. A discursive conclusion follows, which reflects on the concept of ILM churn in the context of the broader political economy.

Review of debates

The function and provenance of internal labour markets

Internal labour markets delineate a boundary between employees of the firm and labour available on the external labour market (Osterman, 2011). In theory, ILMs protect employees from the vagaries of the external labour market by establishing administrative processes rather than market competition as the basis for the allocation of labour within an organisation; replacing arbitrary rules with equity, due process and transparency of procedure (Doeringer and Piore, 1971). A mutual understanding of the rules governing the employment relationship is a key tenet of traditional ILMs. Formal rules are supplemented by customary law, an unwritten set of rules based largely on precedent and past practice, which take on an ‘ethical or quasi-ethical aura’ (Doeringer and Piore, 1971: 23), determining what is right and wrong within the workplace. Such rules reflect the logic underpinning ILMs of insulating the employment relationship from the influences of competitive external market forces (Doeringer and Piore, 1971; Reynolds, 1951; Williamson et al., 1975).

For employers, ILMs represent the assertion of a monopoly over the supply of labour rather than relying on wage-competitive external labour markets (Reynolds, 1951). Doeringer and Piore (1971) suggest it was the detrimental consequences and costs of losing specialist or technically skilled labour that helped inspire the creation of structures to bind employees to the firm. For Williamson et al. (1975), by tying individuals’ interests to those of the firm through long-term employment and career ladders, ILMs help develop consummate cooperation from workers: ‘an affirmative job attitude – to include the use of judgement, filling gaps, and taking initiative’, in contrast to perfunctory cooperation involving ‘job performance of a minimally acceptable sort’ (Williamson et al., 1975: 266).

Under slack external labour market conditions the maintenance of a monopoly over a stock of labour may not be necessary; as Rubery (1994) notes, theoretically it becomes a matter of bettering the next best alternative. Therefore, it is important to recognise the contextual factors that shape the operation of ILMs, such as the state of the external labour market, sectoral characteristics and institutional influences (Grimshaw and Rubery, 1998). In the UK, a key institutional influence is the importance of the public sector in the emergence, and continued operation, of ILMs (Cox et al., 2008; Siebert and Addison, 1991). Similarly, the role of unions in promoting the protection to workers offered by ILMs is often overlooked in efficiency-centric accounts (Rubery, 1994).

It is also important to recognise the extent to which ILMs have been reformed through management initiatives aimed at introducing market imperatives to internal organisational processes (Grimshaw et al., 2001; Lee, 2015; MacKenzie, 2000; Osterman, 2011). Yet even as predictable advancement via job-ladders was truncated, promises of stability of employment remained (Cox et al., 2008; Lovering, 1990). The stability offered by tenure alone was sufficient to tie employees’ interests to those of the firm in the way career progression had previously done (Lovering, 1990; Williamson et al., 1975). The changes to ILMs witnessed over recent decades represent a rebalancing between the imperatives of the market and administrative laws rather than a complete abandonment of the latter in favour of the former. Importantly, ILMs have continued to operate and even develop (Cox et al., 2008; Kuruvilla and Noronha, 2016) and the role of the administrative law in the allocation of labour remains a vital function.

The redistribution of labour within ILMs

A key aspect of the allocation of labour within ILMs is the redistribution of existing employees to new jobs: it is this internal mobility function that is key to the current study. From classic depictions to recent contributions on the function of ILMs, internal mobility is seen as a means of maintaining workers’ commitment within long-term employment relationships (Bidwell and Mollick, 2015; Doeringer and Piore, 1971; Williamson et al., 1975). Bidwell and Mollick (2015) suggest internal moves are the dominant way in which people climb the career ladder, by facilitating increases in responsibility and status (Bidwell and Mollick, 2015). Here we see agency on behalf of the worker; there is also choice exercised by managers, favouring internal appointments as a means of reducing uncertainty and finding the best fit between worker and job (Bidwell and Keller, 2014; Bidwell and Mollick, 2015). Such transactions depend on the internal allocation of labour within the ILM, under ‘normal’ conditions.

A major restructuring event however presents a distinct context, in which internal movement is compelled rather than a matter of choice, and thus the redeployment mechanism becomes the key component of administrative law determining the allocation of labour. While the outcomes of internal moves may be the subject of previous studies (Bidwell and Keller, 2014; Bidwell and Mollick, 2015) the actual operation of the redistribution function has received little attention, particularly in the context of the inherent threat to workers posed by restructuring. Frequent organisational restructuring is increasingly the norm rather than the exception in terms of management strategy, and not limited to downturns or times of economic crisis (Cappelli, 1999; ERM, 2021). The potential for workers to have multiple experiences of redeployment adds a new dimension to the consequences of restructuring. While internal mobility may be seen as a way of maintaining commitment (Bidwell and Mollick, 2015; Doeringer and Piore, 1971), whether this assumption holds after recurrent experiences of redeployment warrants investigation.

The experience of restructuring thus brings the operation of ILMs into sharp relief (McLachlan et al., 2021; Rutherford, 2006). Workers who experience internal redeployment are reliant on the effective, and fair, operation of internal administrative processes for the allocation of labour (McLachlan et al., 2021). Yet, the internal mobility function of an ILM during restructuring remains under-researched. One of the few contributions to touch on such issues, Grimshaw et al.’s (2001) study of restructuring noted managers in receiving departments were resistant to accept redeployees due to loss of control over the recruitment and selection process. Interestingly, Grimshaw et al. (2001) speculate over the longer-term consequences of redeployment for employees, suggesting that movement between departments may upset career progression and generate resentment among employees facing limited opportunities to upgrade new jobs to the appropriate skill levels. Despite this speculation, the consequences for employees have received little attention in subsequent research, and redeployment in general remains an underexplored area. Recent studies of in-work insecurity offer insights that may be usefully applied to such issues (Choonara, 2020; Gallie et al., 2017). While the loss of employment associated with job tenure insecurity may not be applicable, job status insecurity from fear of being transferred to a less interesting job and deterioration in skills-fit, hints at redeployment (Gallie et al., 2017). Although internal mobility is marginal to Gallie et al.’s study, which is also based on the prospect of change rather than experience of the consequences, in-work insecurity offers a useful avenue to explore in terms of redeployment, and particularly the consequences of multiple job changes.

Within the external labour market such movement in and out of jobs is referred to as churning (Worth, 2005). Job churning can result from voluntary quitting or employer hiring and firing, often involving short-term employment that offers little prospect of progression (Burgess et al., 2000; Cappelli and Neumark, 2004; Lee and Hicks, 2003; Lengermann and Vilhuber, 2002; Worth, 2005). Such job churning is particularly associated with the lower end of the labour market, often including churning between work and spells spent with welfare support (Worth, 2005). A particular problem associated with external churning is it denies the opportunity to develop human capital, which has negative consequences for employment prospects, thereby exacerbating the pressure on recurrent job search activity (Worth, 2005). For those workers experiencing churn as a result of redundancy, negative consequences may be compounded by the stigma attached to job loss. Turnbull and Wass (1997) suggest potential employers tend to be wary of hiring an employee another firm has made redundant as it suggests the employee is ostensibly ineffective or inadequate, rendering such workers as labour market ‘lemons’. These are issues usually associated with the external labour market, yet they resonate with the problems faced by workers in the SteelCo case. Hitherto, the concept of churning has been exclusively discussed in the literature in terms of the experience of workers on the external labour market. In the following analysis churning is adapted and applied to the internal labour market, providing insight into the underexplored phenomenon of recurrent redeployment.

Building on the extant literature, this article therefore addresses three key research questions:

• 1. How does the redistributive function of an ILM operate in the context of restructuring?

• 2. What are the effects of recurrent redeployment on workers?

• 3. What are the consequences of these effects for the traditional function of an ILM?

Methods and context

SteelCo is a large steel firm based in the North of England employing around 5000 permanent workers at the time of research, making it the dominant employer in the region. With a public sector heritage and 82% trade union density underpinning the operation of a traditional internal labour market, SteelCo presented itself as a critical case in which to examine redeployment in the context of restructuring (Hamel et al., 1993). A longitudinal case study collected data over an 18 month fieldwork period (2013–2015), which covered the implementation of two major restructuring events. In 2011 SteelCo announced 1200 redundancies, followed in 2013 by the announcement of a further 500 job cuts. The longitudinal approach allowed insight into continuities that may have been overlooked in comparing episodic observation of events. Combining analysis of these events shed light on the phenomenon of internal churning, which by its nature spanned the two, and indeed prior, experiences of restructuring. Restructuring at SteelCo has been frequent and episodic since the late 1970s; following privatisation in 1988, the company changed ownership several times and had been subject to investiture and divestiture by multinational corporations. The organisational changes visited upon SteelCo exemplified trends of restructuring in both the steel industry and the wider UK economy.

The analysis draws on data from 59 in-depth, semi-structured interviews with redeployed workers, management, unions and other stakeholders. Snowball sampling was adopted and was facilitated by key management and union gatekeepers. Interviews were conducted in 2013 and 2014 and ranged from 45 minutes to two hours. The sample involved 30 workers in steel production, engineering workshops, finance and other clerical roles, which reflected a mix of medium to high skill levels. The tenure of interviewees ranged from five to 35 years, ages ranged from 28–60 and included 22 males and eight females. An inductive approach was adopted to explore workers’ experiences of redeployment. An interview schedule asked workers questions related to their perspectives on the wider restructuring process, their experience of redeployment, the types of support offered and the impact on skills. Interestingly, although the research initially aimed to explore the restructuring events that occurred between 2011–2014, workers routinely discussed prior experiences of redeployment when explaining their present situation. Therefore, an advantage of the inductive approach was that it allowed for the observation of an emergent theme of repeated experiences of redeployment. In terms of this emergent theme, a strength of the sample was that 21 participants experienced redeployment in both restructuring events under study and in previous restructurings. A further five participants experienced redeployment in both events under study and four participants experienced redeployment in only one. The mixture of the frequency of redeployment experiences facilitated insight into the consequences of internal churning.

In addition to semi-structured interviews, data were collected through 120 hours of non-participant observation and internal company documentation. Observation involved attending key redeployment meetings and training workshops plus shadowing HR and union staff. Being present in the social setting as restructuring took place brought a richer, and unique, in situ insight into the management of redeployment. Field notes were recorded in a journal and in combination with internal company documentation, such as collective agreements and restructuring policy, aided in triangulating workers’ testimonies. Although the findings only present quotes from workers, the additional interviews with 29 management, HR, senior union officials and other stakeholders were essential in understanding restructuring and redeployment as a function of SteelCo’s ILM.

Interviews were recorded, transcribed and thematically analysed using Nvivo software. Data analysis followed Tracy’s (2019) approach that proposes first ‘fracturing’ the data into specific annotations before ‘lumping’ similar ideas together to construct themes. First, we broke the data into detailed nodes based on participants’ experiences of restructuring, highlighting overarching themes such as the negative personal and professional effects and their understanding of the process, before a second cycle of coding that brought workers’ discussions of redeployment together. The analysis then identified the objective incidence of repeated redeployment and the associated individual experiences. Further analysis interpreted these findings through a process of iteration with the academic literature to develop themes that reflected tenets of ILM theory, locating experiences of redeployment in relation to relevant practices, customs and consequences of ILMs. In addition, workers’ experiences were also located in terms of the interaction between SteelCo’s ILM and the local external labour market. A key emergent theme was the recurrent internal movement of workers within SteelCo as a result of restructuring, which we identified through this analytical process as ILM churn. Evident themes were the customary nature of redeployment, structural factors related to pensions and external labour markets, a seeping external market logic, effects on career progression, and a perfunctory and contingent commitment. The following findings section presents these themes in more detail.

Findings

The redistributive mechanism of redeployment

In the context of restructuring, the key redistributive mechanism used to redeploy workers within the ILM at SteelCo was a process called ‘cross-matching’. Cross-matching placed workers whose jobs were redundant due to restructuring into vacant roles elsewhere at SteelCo; redeployees therefore experienced redundancy of role yet retention of employment. The operation of cross-matching reflected a mix of formal rules and custom, combining management concerns over labour allocation with workers’ interests in job retention. Analysis of documentary evidence showed the rules of cross-matching dated back to an historic collective agreement from SteelCo’s time in the public sector, which aimed to avoid compulsory redundancies and help mitigate the effects of restructuring by ensuring job retention for affected workers. Repeated past use of cross-matching due to frequent restructuring established customary law around expectations towards the management of restructuring.

Interview and observational data confirmed the mutual commitment to cross-matching. From management’s perspective, cross-matching avoided the costs associated with compulsory redundancies and mitigated potential resistance to restructuring, as the process was jointly managed with the unions. From the workers’ perspective, their interests were accommodated through an employment guarantee, the provision of on-the-job retraining and ring-fenced pay that was subject to renegotiation after two years. Additional structural factors bound workers’ interests to the cross-matching process: SteelCo’s perceived dominance of the local external labour market was one such factor. SteelCo provided relatively highly paid, skilled jobs, which participants reported as being scarce in the region. Workers were thus incentivised to retain employment through cross-matching within the ILM as it insulated them from the uncertainty of job searching in the external labour market. Another crucial structural factor was the comparably superior defined benefit pension scheme. Premature departure from the pension scheme risked incurring an actuarial reduction in overall pension entitlement.

Observations from cross-match meetings illuminated how the process functioned. In practical terms, cross-matching commenced with an evaluation exercise of workers in affected areas, conducted by HR and departmental managers. Workers were assigned a score based on criteria related to their skills and competences. A cross-match committee was then established to manage redeployment and reallocate workers into new roles; a process informed by the scores from the evaluation exercise. The committee included six HR representatives, the head of the ‘multi-union’ group and a senior union official from each of the four unions recognised on site.

Potential redeployees were advised of vacancies on the company intranet, along with encouragement from the cross-match committee towards ostensibly suitable roles. Workers were then required to submit a CV prior to a panel interview with HR and departmental management. Therefore, internal movements were based upon a combination of worker evaluations and a competitive application process. When shadowing union officials, they stressed that cross-matching aimed to demonstrate equity and due process for all affected workers. However, hiring managers ultimately had discretion over the selection of redeployees.

Interviews with workers showed that cross-matching was broadly perceived as equitable. Moreover, some regarded redeployment as an opportunity to expand the breadth of their knowledge base and learn new skills. Although redeployment typically led to horizontal movements, the existence of such a redistributive mechanism offered the potential for future advancement. As Fred, who was redeployed for the first time, explained:

I view it like another stage in my career as a steelworker. I’ve made things, I’ve welded things, I’ve been in charge of people making things, and now I’m inspecting things. And the way I see it, I might hopefully climb up in this department, they’re going to put me through some courses too as I’m hoping I can build my engineer skills up on the side.

Serial restructuring at SteelCo, however, meant some workers were exposed to cross-matching on a repeated basis; 26 people in the sample were redeployed on multiple occasions. The general acceptance of the need for restructuring expressed by workers was typically framed through their reliance on cross-matching to ensure continued employment: workers knew they would not be forced to take compulsory redundancy. Nonetheless, for workers who had experienced previous rounds of restructuring, there was an evident tension between feeling grateful for the job retention effect of cross-matching yet aggrieved at repeated selection for redundancy. Paul and Dave were manual workers now in clerical roles and they emphasised the challenges of balancing the effects of job retention and multiple experiences of redeployment:

I’ve gone from being in a very stable job for 20 years to being bounced between three different departments in the last six years. And you think, Christ is this happening again?. . . But that’s taught me not to be too bothered about it, because I’ve gone through it three times now and I know they’ll get me something whenever restructuring comes around.

I’ve done it [cross-matching] four times now and I think the company did pretty much what they’ve got to do. It’ll be easy for me to sit here and slag them off, they put me in loads of jobs which has been mega stressful, it’s rubbish because they’re forever messing your career around. Or you could say, I left school at 16, came here, and I’m still here. After everything that’s happened, I’m still here. That’s the main thing.

Although guarantees of no compulsory redundancies and cross-matching meant workers did not live with job tenure insecurity (Gallie et al., 2017), stated anxieties over repeated restructuring demonstrated an in-work insecurity related to the disruption that displacement caused to their working lives. Despite a broad acceptance of restructuring and the value attached to job retention, apparent misgivings of multiple experiences of redeployment hinted at significant consequences associated with internal churning.

Worker effects of internal churning

There were a series of negative effects to emerge from internal churning relating to heightened in-work insecurity, skills mismatch and human capital development. Some workers in the sample had experienced up to six internal movements through cross-matching. There were also three cases of workers moving between two and three different jobs in a single restructuring event, due to them seeking an alternative position after a four-week trial period in the redeployed role. Depending on the time between restructuring events workers did not, in some instances, stay in their redeployed role long before moving again. Although cross-matching meant workers did not fear loss of employment, recurrent experiences of redeployment nonetheless created a sense of insecurity over redundancy of role. Both Wendy and David moved between engineering and clerical roles and exemplified the heightened in-work insecurity associated with internal churning:

It [restructuring] has meant the average time I’ve spent in the same job seems about two or three years, and you find that numerous people internally have worked in different roles. It’s almost a surprise if it’s longer than that.

Now if I’m going to take on a project in a new role, I wonder to myself – what’s the point? I probably won’t get a chance to finish it. So you take a new job, yeah, but they’ll no doubt turn around and tell us in six months’ time that it’s going when there’s inevitably another restructuring.

Observations from cross-match meetings revealed that despite intentions to match workers with appropriate jobs, this gave way to expediting the restructuring process by clearing cross-match lists and filling vacancies. Therefore, a negative effect of redeployment was internal movements to roles inconsistent with skill sets and competences, meaning workers were restricted in their ability to apply the human capital they had accumulated over the course of their tenure. Such inconsistencies related both to taking on new jobs in different departments and sometimes within the same department. Workers found themselves in other manual jobs, and even IT and clerical roles, to which they felt unsuited. Karen and William, redeployed from engineering, illustrated frustration as a result of skills mismatches from redeployment:

Our HR manager was recommending jobs I had no background in whatsoever. It was a completely different trade, without saying why it would suit you. . . they’ve trained us all up to a standard, passed exams, got a certain standard of technical qualification, and now we’re out here driving locos and pushing buttons for a living. It’s like those skills I built up have gone.

I’d grown in the department, took qualifications within this trade to progress myself within this field. . .and then I got a letter saying that my position is no longer available within the department. . . What I’m doing now is more to do with the computer and design side which I don’t have much knowledge in. It’s a complete change.

Many workers viewed recurrent redeployment as having a negative effect on their ability to utilise their human capital. Qualifications from apprenticeships, professional accreditations or other training schemes typified the mix of medium to high skill levels in the sample, meaning workers were not necessarily associated with the ‘lower end of the labour market’ (Worth, 2005). In addition to the skills mismatch, enforced internal movement often meant the loss of valued aspects of their previous jobs (Gallie et al., 2017). Frank and Peter worked in finance and engineering, respectively, but had moved roles twice due to restructuring and lamented its disruptive effects:

It’s annoying because a part of me really misses being in finance, that’s what I wanted for my career and what I know best, but now I’m just a journeyman just doing whatever’s available.

I was disappointed because I switched into different jobs from restructuring, where my whole career had been in structural engineering. . .now I’m health and safety. I had a good reputation as a foreman and I always proud to say, well that is my career, but it’s not where I’ve ended up.

A further negative effect of internal churning was the hindrance on workers’ ability to develop human capital commensurate with their new roles within SteelCo. The more internal movement workers endured the less able they were to develop their human capital in terms of relevant skills, competencies and job experience. Despite being a celebrated part of cross-matching, on-the-job retraining was often limited and generally not accredited through formal qualifications. Workers therefore tended to score less in evaluation exercises the more jobs they churned through, which in turn reduced their probability of success in the competitive application process that was part of cross-matching. Some departmental managers expressed a wariness of recruiting workers through cross-matching due to the inability of workers to accumulate appropriate skills and competencies, which was exacerbated by recurrent redeployment. Internal churning therefore heightened redeployees’ vulnerability in subsequent restructuring events. Julie and Gary described their experience of applying for jobs on a competitive basis through cross-matching, and illustrated the knock-backs they faced because of repeated redeployment:

I was getting turned down for a lot of jobs, I hadn’t built up enough experience in each of the ones I’ve moved to. When it came to interviews and stuff, it didn’t make me a very attractive choice.

Looking back now, over the years I’ve applied for five different jobs, but some I didn’t even get an interview for. . . yes I still got paid and that’s important. But I remember when HR showed me my file during the cross-match and there was little to show in terms of what I’d achieved in the actual jobs I was doing.

By churning through jobs within the ILM, individual workers may enter a self-perpetuating downward spiral as potential hiring managers were deterred on the basis of displacement signalling some sort of inadequacy, rendering such workers as internal labour market ‘lemons’ (Turnbull and Wass, 1997). The increased emphasis on competition within cross-matching further exposed the ILM to an external labour market logic, putting greater responsibility on the individual to maintain their appeal to potential hiring managers. In turn, hiring managers were afforded greater control over internal recruitment and selection: although cross-matching was the key administrative redistributive function, hiring managers could assert discretion over the labour resources they acquired from the internal market. However, the consequences for redeployees of greater exposure to competition was also a harbinger of change in terms of workers’ relationship with SteelCo’s ILM.

Contingent and perfunctory commitment

A key theme to emerge was how the adverse effects of internal churning generated an increasingly perfunctory commitment, characterised by passive, instrumental attachment to tenure rather than an active engagement with new roles, and contingent on structural factors related to the external labour market and pension entitlements. As seen above from Paul and Dave, workers became more concerned with holding on for any job internally. Perfunctory and contingent commitment was evident in how internal churning meant workers increasingly prioritised the material benefits of retaining employment at SteelCo over job satisfaction and career progression. The experience of internal churning caused a shift towards a more instrumental approach among affected workers, where stability of job tenure through redeployment was sufficient to tie workers’ interests to SteelCo. Although retention was preferred this was based on redeployment being better than the bad option (Rubery, 1994) of redundancy, as opposed to a proactive commitment to the new role. Billy worked in engineering then production and illustrated how the interaction with structural factors shaped experiences of internal churning:

Having to apply for jobs outside is hard, you won’t get anything as good as here. . . But a lot of us who have been here a long time are tied in with our pension. We call it the pension trap. So we’re not looking for alternatives on the outside, we’re self-preservation, we’ll take what we can get here and for as long as we can.

For some, this perfunctory commitment was more pronounced, going beyond passive attachment to feeling maltreated and damaged by their experiences of internal churning. The associated motivational benefits of progression through an ILM were long exhausted, leaving instead a sense of disillusionment, resignation and powerlessness. Jane and Fred had worked a series of clerical roles and represented the way internal churning left workers feeling downtrodden:

I’ve certainly lost my drive, I can’t progress anymore. Where before I had the drive to progress up the ranks I just feel like all the moving and change has left me abused and I’ve got no desire. I’m just resigned to being one of the masses that gets bounced around [every restructuring].

I’m still here hanging on for grim death, and that was because of my passion for the place and my willingness to do different things, that’s why I’ve stayed on. But now I just think what’s the point anymore?

As a consequence of the experience of internal churning, some workers considered eschewing the benefits of cross-matching, questioning whether redeployment remained their best option and expressing a desire to take greater agency over their working lives. This proved a significant departure: despite the job retention purpose of redeployment, some workers no longer perceived their long-term interests as being tied to SteelCo and contemplated leaving in future restructuring events. Although perhaps not unusual for workers to express exit intentions in response to restructuring, such concerns reflected the demise of the sanctity of SteelCo’s ILM: workers who had associated SteelCo with a ‘job for life’ within its ILM were now reassessing such a view. This realisation suggested that internal churning had weakened workers’ reliance on the insulating and redistributive function of redeployment. Jenny and Barry worked in engineering then clerical roles and represented these concerns:

In terms of my career the rug has been pulled from under me, because the [engineering] workshops were hit yet again. I feel like I’m back to square one. It would have to be, if I’m serious about developing my career, getting a job somewhere outside of here. I’d never thought that before, I always expected to just work in the steel industry.

Anybody who’s been here any length of time has lived a bit of a sheltered life, it’s a real cut throat world out there. . .but if the situation did arise again I would think about taking voluntary redundancy and looking for a job somewhere else, I couldn’t go through it [cross-matching] again.

Observations from training workshops along with interviews with workers showed how the experience of internal churning and the consideration of options in the external labour market also manifested itself in new job search activities. Compelling workers to replicate the kind of job search activities associated with the external labour market for positions within the ILM had consequential behavioural effects. Workers reported that because they were required to participate in evaluation exercises and competitive application processes during cross-matching, they had also begun to extend this engagement with market logic to more externally-oriented activities. Paralleling their internal job search practices, workers described regularly updating their CVs to demonstrate their employability beyond the firm, signing up to private recruitment agencies and speaking to external careers advice services. In terms of ILM theory, this countered the logic of the employer exerting a monopoly over the supply of labour, and from an organisational perspective ran the risk of losing potentially valuable employees with idiosyncratic skill sets and tacit organisational knowledge. The desire among some workers to explore alternatives external to SteelCo exposed the consequences of a seeping competitive market logic that management had introduced to the administrative processes within the ILM. Daniel and Wendy were cross-matched three times each and illustrated the shift in attitude towards a more external market logic:

Weirdly I find myself actually keeping a look out when I get sent jobs by email. I now need to keep my options open. I think a lot of people in my position are like that, as it’ll [restructuring] come around the corner again.

Next time I’ll investigate more, because there will be potential career options outside but I should ask more questions about whether staying here is worth it. . . with cross-matching we didn’t have as much of a choice as we thought, maybe there is more choice outside.

The traditional functioning of the ILM increasingly reflected an external market logic as the redistributive mechanism of cross-matching became informed by competition and management discretion. However, it is in the emergence of internal churning that the analogous experience of the vagaries of the external labour market were most damaging to the mutuality of commitment traditionally engendered by the ILM. Where workers previously relied on SteelCo’s ILM for employment security and career progression, the detriment experienced to the latter thus led some to question the value of the former. Commitment contingent on just bettering the next best alternative (Rubery, 1994), in the form of tenure without progression being better than seeking a job externally, could no longer be taken for granted in the context of ILM churn.

Discussion and conclusion

This article explored workers’ experiences of recurrent internal redeployment. Through the lens of ILM theory, the findings shed new light on the operation of redeployment as the redistributive mechanism for the allocation of labour at times of restructuring. While previous studies demonstrate the positive outcomes of internal movement (Bidwell and Keller, 2014; Bidwell and Mollick, 2015), the SteelCo case allowed insight into the potentially adverse effects. Frequent restructuring meant many workers were repeatedly exposed to redeployment, often moving between several roles within SteelCo. The principal contribution of the article is therefore to advance knowledge of internal redeployment through the identification of the new concept of internal labour market churn as a result of multiple experiences of redeployment. ILM churn demonstrates that despite the advantages of maintaining tenure redeployment can have unintended consequences in terms of exacerbating rather than attenuating perceptions of in-work insecurity, with adverse implications for perceptions of career progression and the mutuality of commitment. While previous studies have analysed the concept of churning in and out of jobs in the external labour market (Worth, 2005), churning has not previously been analysed in relation to ILMs or to the experience of redeployment.

There are both similarities and differences between internal and external churning, which reflected the blurring of the distinction between the external labour market and the ILM. That the operation of the internal labour market had come to resemble aspects of the external labour market was manifest in the increased exposure of workers to competition for jobs, compelling new forms of job search activities in the context of heightened management discretion over internal hires and the danger for workers of becoming labour market ‘lemons’. The similarities between internal and external churning could be seen in multiple experiences of redeployment leading to heightened job insecurity and problems with the accumulation of human capital. In turn, indicative of the continued distinction between the internal and external labour markets, there were key differences between internal and external churning, notably: the continuation of a long-term employment relationship; no period of inactivity between jobs; and internal churning not being predominately associated with the lower end of the labour market.

The findings analysed redeployment through ILM theory, in which cross-matching reflected customary law (Doeringer and Piore, 1971) around restructuring, combining workers’ interests in job retention and management’s concerns for labour (re)allocation (Grimshaw et al., 2001; Williamson et al., 1975). The combination of the legacy of collective agreements and structural factors, related to pension entitlements and external labour market conditions, inclined workers to cooperate with cross-matching and accept successive redeployment, despite the negative effects of internal churning. However, redeployment must be viewed in the context of long-term trends in the reform of ILMs to expose internal processes to market imperatives (Bidwell and Keller, 2014; Cox et al., 2008; Grimshaw et al., 2001; MacKenzie, 2000). The competition for jobs within cross-matching, greater management discretion over hiring and the use of an evaluation exercise to inform redeployment decisions represented the rebalancing of administrative processes and market imperatives in the redistributive function of the ILM.

While recent research points to how voluntary lateral internal moves are a dominant mode of facilitating career progression (Bidwell and Keller, 2014; Bidwell and Mollick, 2015), in the context of recurrent redeployment compelled by episodic restructuring the possible adverse outcomes of multiple moves come into sharp relief. Internal churning due to multiple redeployment created a sense of in-work insecurity; not job tenure insecurity associated with exit from the organisation (Gallie et al., 2017) but rather fear of the recurrence of role redundancy and repeated redeployment. Moreover, repeated cross-matching could constrain workers’ opportunities for progression and create the danger of them becoming internal labour market ‘lemons’; paralleling the compounding of the effects of redundancy in the external labour market (Turnbull and Wass, 1997).

Although the continuation of tenure was a manifest difference between internal and external churning, there were similar detrimental consequences for human capital development and career progression. The inability to develop human capital due to turnover of jobs associated with external churning was paralleled in internal churning. The underdevelopment of human capital within new roles left redeployees structurally disadvantaged when it came to the competitive application process that was part of cross-matching. However, there was also frustration over the underutilisation of existing human capital, in terms of new jobs not affording the application of idiosyncratic skills developed internally through long-term employment relationships. Herein lies another key distinction from external churning in that internal churning was not predominantly associated with the ‘lower end’ of the labour market but rather affected workers at all levels and skill sets, including those with long standing careers and accumulated human capital. While frustrating for individuals, this also held implications for the organisation in terms of managing the utilisation of human capital, particularly in the context of redeployment.

Therefore, distinct to internal churning were the implications of repeated changing of roles in the context of maintaining a prolonged employment relationship, which became evident in a more perfunctory and contingent attachment to SteelCo. For some, internal churning remained compatible with tying of individual interests to those of the firm (Williamson et al., 1975), on the basis of the financial security of ongoing employment and, crucially, full pension entitlements. However, this reflected a passive and more instrumental attachment to tenure rather than an active engagement with their new roles. For others, perceptions of skill underutilisation and career damage associated with internal churning weakened the bond tying individual interests to those of the firm. Therefore, while there were adverse outcomes for individual redeployees, the cumulative effect held significant organisational implications in terms of maintaining motivation in the context of an ongoing employment relationship where the mutuality of commitment traditionally reflected in and engendered by ILMs had been strained. Moreover, the seeping of external market imperatives into SteelCo’s ILM undermined the logic of monopoly over labour supply typically characteristic of ILMs. The experience of internal churning meant some workers questioned the benefits of redeployment and extended the internal competitive activities prescribed by cross-matching to job search externally. For those workers pushed into an internal competitive process, bettering the next best alternative (Rubery, 1994) now included considering external options, in contradiction of the logic of an ILM.

The wider significance of the SteelCo case must be viewed in terms of the broader political economy of restructuring. SteelCo was the dominant local employer, where jobs were also relatively well paid; workers recognised that there was a paucity of equivalent jobs locally. Therefore, the relative labour market position of workers was shaped by the interaction between the internal and external labour market (Grimshaw and Rubery, 1998), mediated by institutional influences such as high levels of unionisation, legacies of past collective agreements and public sector heritage. More broadly, internal churning was a consequence of the frequent periodic restructuring of the steel industry, in turn reflecting changes in ownership, from denationalisation to subsequent investiture and divestiture of multinational corporations. Although the experiences of SteelCo were part of long-term structural change in the steel industry, repeated shifts in ownership are not unique to this industry but rather part of a broader pattern of economic adjustment. With the frequency of investiture and divestiture being escalated by financialisation, the implications of organisational restructuring resonate beyond the context of the UK steel industry.

Although we must recognise the methodological limitations of a single case, this study represents the first observation of a phenomenon that may be applicable to the numerous ILMs that continue to operate in large organisations. The increasingly ubiquitous process of episodic restructuring means more people will experience recurrent redeployment and the adverse effects of internal churning. Given the continued importance of internal labour markets and the ongoing prevalence of restructuring, the theoretical generalisability of ILM churn extends farther than of the SteelCo case.