8 February 2012

Ports of Auckland dispute—does outsourcing improve productivity?

Dr Stephen Blumenfeld, Director of Victoria University’s Industrial Relations Centre

“The Ports of Auckland dispute has been presented in the media as a conflict between an employer seeking to improve productivity in the workplace and workers that want to retain their conditions of work at the expense of productivity.

“The Ports of Auckland is pushing for greater flexibility as a means of increasing productivity. But, is outsourcing, or casualisation, the solution to improving productivity?

“A large body of research conducted in a variety of national and industry contexts suggests that it is not. That research points to the conclusion that casualisation is generally not cost-effective for employers.

“The productivity of casual employees is often lower than that of permanent core employees of an organisation—in large measure, because use of casual and contract labour removes the incentive for an employer to provide training to those parts of the workforce.”

“In addition, because there is no security of employment in such jobs, a casual workforce is likely to be less committed to the employer and hence less productive than permanent staff.

“There are also tensions between permanent staff and contract workers, which often occurs when the former view the latter as posing a threat to their job security and hard-won employment benefits to which contract workers are not typically entitled.

“It would seem therefore that the Ports of Auckland would be better served by reaching agreement with the Maritime Union at the bargaining table than by following a strategy aimed at undermining the union’s ability to represent workers at the port.”

ENDS

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