Labour flexibility and innovation, complementary or concurrent strategies? A review of the literature

Abstract

The European strategy for growth has a twofold aim: to become an innovative union and to enhance labour flexibility. Yet, few have addressed the question of whether these two strategies are compatible or concurrent. Through a review of the literature, this article addresses this question by focusing on different types of labour flexibility (functional, contractual and financial), and two types of innovation outcomes: employee-driven innovation (EDI) and organizational innovativeness. Using insights from different research traditions, sound evidence is found for a positive relation between different forms of functional flexibility and both EDI and organizational innovation. This is nevertheless not so for contractual and financial flexibility. Indications are found that these types of labour flexibility are potentially negative for both EDI and organizational innovation. Yet, trends in the European labour market and EU backed policies do not focus on enhancing functional flexibility, but rather aim to increase contractual and financial flexibility.

Collaborative Innovation, New Technologies, and Work Redesign

“…Staying with intraorganizational relations, both the collaborative innovation and EDI literatures emphasize the crucial role of opportunities for transformative learning within and across teams and groups of employees. de Spiegelaere, Van Gyes, and Van Hootegem () note that numerous studies have found a relationship between collaboration within multi‐skilled teams and innovativeness. As noted earlier, the EDI literature more generally sees workplace innovation as “a reflexive process, grounded in continuing reflection, learning and… involving employees and managers at all levels” (European Commission , 69).…”

Labour productivity and innovation performance: The importance of internal labour flexibility practices

“…Of course, in times of crisis, firms may feel pressured to cut costs in the short term by relying on external flexibility measures. Indeed, trends in the European labour market and EU backed policies do not focus on enhancing functional flexibility, but rather aim to increase external (contractual) and financial flexibility (De Spiegelaere et al, 2014;Eurofound, 2010;Sandor, 2011).…”

“…Also, most studies that relate job characteristics (i.e. job complexity, job rotation) to creativity and innovative behaviour are based on cross-sectional designs and single sources (see Hammond et al, 2011;Shalley and Gilson, 2004;, leaving the direction of the causal relation unknown (De Spiegelaere et al, 2014). Fifth, we contribute to knowledge of internal flexibility practices in the Netherlands.…”

On the Relation of Job Insecurity, Job Autonomy, Innovative Work Behaviour and the Mediating Effect of Work Engagement

“…The same goes for autonomy; if we find a significant effect, innovation managers should give employees enough discretion in how they perform their work tasks. For policy makers, this study could indicate that the observed rise in job insecurity in Europe is not a neutral process and can potentially negatively affect the innovation agenda (De Spiegelaere, Van Gyes & Van Hootegem, 2013).…”