by Paul Gollan and Laura Steele (as published in the Financial Review)
Given its importance, attention must be given to develop an industrial relations framework to promote organisational agility. Is the current IR system fit for purpose in meeting these challenges and opportunities?
Australia's changing demographics, economic climate and priorities of workers are having a significant impact on the way we organise work in Australia. The Australian system will require significantly more agility and flexibility to be able to keep pace with these drivers of change.
Recent studies have indicated that workers are staying for increasingly shorter periods of time in one job, with millennials preferring "job-hopping" rather traditional career paths. According to the Future Workplace "Multiple Generations @ Work" survey of 1189 employees and 150 managers, some 91 per cent of Millennials (born between 1977-1997) expect to stay in a job for three years or less, in effect having around 15 to 20 jobs in their working life.
Career aspirations form an increasing part of younger workers' motivations, with the concept of having one job for life now at an end. There is also a trend towards transient work rather than a linear career path, to accommodate individual study and family priorities - all a far cry from when the basic Australian IR framework was set up more than 100 years ago. These worker preferences will have an increasing impact on Australia's industrial relations system in the future.
University of Queensland research has come to similar findings, with highly productive organisational outputs occurring where workers objectives, priorities and motivation aligns with those of the organisation forming strong partnerships.
Precarious work prized
Younger workers in Australia have a vastly different needs and motivators. Flexibility and meaning are of far greater priority, which lend themselves to work that would normally be deemed to be precarious or uncertain to be highly desirable with some groups of workers.
Importantly, the increasing priorities of workers to have greater flexibility has led to criticism from unions that regulation should be increased to protect those who currently fall outside the protections of the Australian IR system. While it's important that the system provide a safety net, the current system catches the vast majority of people in its protections.
The more regulation that exists, the less it encourages businesses to employ more workers, talking people outside the system rather than bringing them in. Instead of changing the regulatory framework we should be encouraging and incentivising businesses to create jobs because the risk is balanced more evenly between the employer and employee.
Recognition must also be given to small business with limited financial capital and cash flow at particular times in the consumer and business cycle. As highlighted by the PC report, despite the benefits associated with the adoption of traditional flexible work practices, access to flexible arrangements may be an obstacle for small organisations due to the complexity and cost associated with IR regulations.
However, research also indicates that non-traditional flexible work options including outsourcing, independent contracting and contingent work are being used to circumvent this obstacle.
These changes have a significant flow on effect to the way businesses organise work and put an unprecedented pressure on an industrial relations system that was not designed to accommodate this highly agile and fast paced business environment.
While the latest Productivity Commission Report stated that our current IR system is not broken, it will need more than just a repair job: what is required is a fundamental rethink of what type of system supports an agile workforce.
What values and priorities underpin a system that fully explores the opportunities that new disruptive technologies can forge in the new world of work. Our new Prime Minister must now walk the talk and provide true leadership to a nation trying come to grips to the very new challenges facing Australia.
Paul Gollan is a Professor of Management and Director of the Australian Institute of Business and Economics. Laura Steele is a research officer at the University of Queensland.
