| Borne by necessity amid the harsh realities of a troubled economy, “just-in-time” employment practices have proven effective in helping organizations make ends meet. So effective, in fact, that economists should expect more of the same whenever bottom lines are the top priority, according to a study by two economists at the Kansas City Federal Reserve Bank.
The phenomenon of the “jobless recovery” is the result of employers turning to just-in-time practices–hiring more temporary employees, scheduling more part-time work, and paying more overtime – during economic recessions.
These hiring practices could well become the norm in U.S. cycles of recession and recovery, given the value of such flexible arrangements to employers and, in some cases, to employees.
“Just-in-time employment practices give firms more flexibility in employing labor, which is especially valuable early in recoveries,” the economists said.
Just-in-time employment allows employers to expand production on short notice in response to signs of increased demand and to wait for signs that the pickup in demand would be sustained before hiring workers on a more permanent basis. It’s based on the same principle as “just-in-time” delivery of materials, which is used widely in the manufacturing process.
The study focused on three major causes of jobless recoveries: increased hiring of temporary help workers, greater use of part-time employees relative to full-time, and paying more overtime rather than hiring more straight-time workers. |
