To read this content please select one of the options below:

The effect of temporary workers and works councils on process innovation

Christian F. Durach (ESCP Business School, Berlin, Germany)
Frank Wiengarten (Department of Operations, Innovation and Data Sciences, ESADE - Ramon Llull University, Barcelona, Spain)
Mark Pagell (College of Business, University College Dublin, Dublin, Ireland)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 25 November 2022

Issue publication date: 5 April 2023

299

Abstract

Purpose

This study aims to investigate the effects of temporary workers and works councils on process innovations at manufacturing sites. The impact of temporary workers, commonly viewed as a means of operational flexibility and cost savings, on firms’ ability to innovate is underexplored. Works councils represent and help integrate temporary workers, but are often equated with unions, which have been criticized as barriers to innovation, especially in the US.

Design/methodology/approach

The authors use secondary data collected by the Institute for Employment Research (IAB) of the German Federal Employment Agency. Specifically, the authors conduct a series of regression analyses using 11-year panel data covering the period 2009–2019 with 11,641 manufacturing site-year observations.

Findings

The results suggest that the use of temporary workers initially promotes process innovation, but at too high a level, it impairs firms’ ability to innovate. Furthermore, the results suggest that works councils have a positive impact on innovation and dampen the curvilinear effect found with respect to temporary workers.

Originality/value

Research has largely focused on the cost and flexibility benefits of temporary workers. The authors analyze the effectiveness of temporary workers in terms of innovativeness. By including works councils, the study also consider the contextual environment in which temporary workers are employed. Finally, the results reject the assumption that works councils have a similar negative impact as unions on innovation; in fact, the authors find the opposite.

Keywords

Acknowledgements

This study uses the Establishment Panel data from the IAB (1993–2020). Data access was provided via on-site use at the German Institute for Economic Research (DIW) and at the Research Data Centre (FDZ) of the German Federal Employment Agency (BA) at the Institute for Employment Research (IAB) and remote data access (Project numbers: fdz1710 and fdz1711).

Citation

Durach, C.F., Wiengarten, F. and Pagell, M. (2023), "The effect of temporary workers and works councils on process innovation", International Journal of Operations & Production Management, Vol. 43 No. 5, pp. 781-801. https://doi.org/10.1108/IJOPM-07-2022-0427

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

Related articles