New patterns of working relationships

Inability to adjust labour forces quickly and smoothly to changes in the product market has been a key characteristic of UK firms in the period up to 1980. The persistent oscillation between labour hoarding and skill shortages testified to the quantitative dimension of this flexibility. The comparatively poor productivity performance of many UK employers testified to the qualitative shortcomings. While the depth and duration of the current recession has certainly led to some supply‐side changes in labour utilisation policies at the level of the firm, much company‐level research and advisory work by IMS suggests that for the most part these adjustments have been enforced and short‐term, and as expensive in cash terms as they have been destructive of employee morale and long‐term commitment.