Patterns of Enterprise Flexibility: IAB Establishment Panel Results, Western Germany, 1993-95.

Data on flexibility in German companies were compiled through interviews and followed up annually. Employment trends in western Germany indicated a historic peak of 29.5 million employed in 1992 followed by a steady decline of about 1 million to 28.5 million in 1995. Employment losses continued in 1996; 1997 showed some signs of stability. Measurement of numerical flexibility of human resources showed an average job turnover of 7.9 percent per year for 1982-94 and considerable labor turnover at around 11 percent per year, with a slightly rising trend for 1993-95. Another dimension of flexibility of human resources and establishments, variation in working time patterns, was very large and increased as establishment size increased. Pay flexibility was inferred from wage differential trends, number of establishments bound by collective wage agreements, and wage gap between wages/salaries paid and collectively agreed wages. Wage differentials increased; the number of establishments bound to collectively agreed wages dropped; and the average wage gap fell. Technical and organizational change affected research, product innovation, and investment, which, in turn, required a new work organization, decoupled operating and working times, and additional staff qualifications. Corporate flexibility required employee training to produce higher skill levels. Because few establishments were integrated, fewer workers were affected. (Contains 54 references.) (YLB)