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Input: Economic Factors

Organizational practices of concern in the work organization and stress field are the products of macroeconomic, technological, demographic, and other forces at the national and international level.

Falling barriers to trade and capital flow have enabled more companies to operate globally, opening new labor and product markets. The volume of world trade in merchandise nearly tripled in the period 1980-2000, and the volume of trade in service grew even faster. This same period also saw the emergence of new approaches to business organization that involve specialization around core products and services, and new models of production management that featured elements such as continuous improvement, decentralized control and worker empowerment, process simplification and paring of inventories. Exponential growth and business uptake of computer and information technology were also witnessed during this period.

In many countries, these trends have occurred against the backdrop of an aging and increasingly diverse workforce. In the United States, for example, labor force participation for men and women aged 62 and older has increased steadily since the mid-1980s. Labor force participation by women is approaching participation rates for men, with strong gains seen also for mothers with children under age18. Also, the Hispanic workforce continues to grow faster than other racial or ethnic groups. 1, 2

All of these developments have had significant impacts on business practices relevant to the organization of work, including the organization of firms, the organization of production, the nature of employment contracts, and other human resource policies such as work-life programs and fringe benefits. Examples of these impacts include the following:

  • Organizations restructured and downsized at record levels in the early 1990s when a third of more or major organizations engaged in broad workforce reductions on a yearly basis. Although risk of job displacement receded steadily as the economy improved, the fraction of job loss due to structural reasons (versus lack of work) continued to grow. 3, 4
  • New models of production management, such as total quality management, high performance and high involvement work systems, and lean production diffused rapidly throughout industry in the 1990s. Research from the Massachusetts Institute of Technology (MIT) showed that quality circles, job rotation and teamwork continued to spread throughout the 1990s. Unpublished data from the 2002 National Organizations (NOS) survey show teamwork and cross-training to be present in two-thirds of all firms, and job rotation in 40% of firms. These values are all higher than reported by MIT and suggest further diffusion of these practices, although the MIT and NOS surveys are not strictly comparable.5
  • Evidence suggests that flexible or alternative employment arrangements have become an important part of business staffing strategy. Staffing agency data show steady growth in temporary help employment since 1992, interrupted only by the business downturn from 2000-2002. Similarly, the Bureau of Labor Statistics (BLS) Current Employment Survey showed a six-fold increase in temporary help in the period 1982-1998, in contrast to a 40% increase in total employment. Unpublished data from the 2002 NOS suggest continuing expansion of alternative employment from1998-2002. However, the BLS Current Population Survey suggests more stability than do these other sources in utilization of alternative employment arrangements.6, 7, 8
  • Advances in computer and telecommunications technology have facilitated telecommuting and work from home. Recent BLS and private sector data suggest that more than 20 million people presently work from home at least one day per week, and several million more work from home at least once a month. Bureau of Census data on the prevalence of work at home are more conservative, but demonstrate gains in home work in the period 1980-2000 that are much stronger than the growth in total employment.9, 10
  • A 2005 report by the Families and Work Institute indicates that the proportion of firms with programs addressing personal and family needs of workers (e.g., work time flexibility, child- and elder-care assistance, resolution of personal and family problems, leave for child birth, adoption, or illness) has been largely stable since 1998, although improvement in some of these areas has occurred. In contrast, employer-provided medical care and retirement benefits have declined in the last decade. Findings by the BLS show the proportion of workers participating in employer provided medical plans eroded by over 25% in the period 1992-1993 to 2003, and the percentage of workers covered by defined benefit retirement plans declined by one-third. In this period, the percentage of workers covered by any employer-provided retirement plan fell by 8%.11, 12

Although research on the effects of these organizational practices is incomplete, they are believed to influence the design of jobs and risks of work-related stress, injury and illness as illustrated in the Program Description . Refer to the Occupational Risks section for a summary of what is known about the prevalence of stress and stressful job conditions in today's workplace.


  1. The 21st century at work: Forces shaping the future workforce and workplace in the United States, 2004 .
  2. Health and safety needs of older workers, 2004.
  3. Corporate job creation, job elimination, and downsizing.
    Reference: AMA [1997]. 1997 AMA survey. Corporate job creation, job elimination, and downsizing. New York: American Management Association.
  4. Worker displacement in the mid-1990s .
  5. Work reorganization in an era of restructuring: Trends in diffusion and effects on employee welfare .
  6. American Staffing Association: Staffing statistics-staffing employment and sales data .
  7. Contingent and alternative employment arrangements, February 2005 .
  8. CRS report for Congress: Temporary workers as members of the contingent labor force.
    Reference: Levine L [1999]. CRS report for Congress: Temporary workers as members of the contingent labor force. Washington, DC: The Library of Congress, Congressional Research Service, Order Code No. RL30072.
  9. Work at home in 2004 .
  10. Telework Trending Upward, Survey Says.
  11. 2005 National Study of Employers .
  12. Medical and retirement plan coverage: Exploring the decline in recent years .