The mobile worker: concepts, issues, implications

The dynamics of labour mobility have been a matter of long-standing interest to researchers and policy-makers. It is a tricky subject, one that is afflicted by limitations in the information available, and one which can also pose dilemmas for social policy-makers, who are concerned both to ensure a well-functioning labour market and people's welfare.

This paper is one of three commissioned by the National Centre for Vocational Education Research (NCVER) at the request of the Department of Education, Employment and Workplace Relations to tease out some of the issues connected to mobility in the Australian workforce. The related papers are:

• Does changing your job leave you better off? A study of labour mobility in Australia, 2002 to 2008 by Ian Watson
• Understanding and improving labour mobility by John Buchanan, Susanna Baldwin and Sally Wright.

In this paper Richard Sweet provides an overview of the implications and causes of labour mobility and job tenure using data from major statistical sources and the research literature. He finds that Australia's labour force is more mobile than almost all other Organisation for Economic Co-operation and Development (OECD) countries. Each year, around 10% change their industry, occupation or both, and geographic labour mobility appears to be around 3% to 5% of the Australian labour force, although the data here are not good.

People with post-school qualifications are less likely to be mobile than those without. The people most likely to be mobile are young. This is neither surprising nor necessarily a problem. Young people tend to have few commitments and often desire the flexibility that will allow them to decide on their career path. People working in casual jobs or in small enterprises with limited career prospects experience greater mobility, while those with post-school qualifications are more likely to change jobs but not occupations. Most people change jobs because they dislike the one they have.

Sweet suggests that Australian public policy has mixed effects on labour mobility. Because policies designed to influence labour mobility or tenure are difficult to design and are likely to have unintended consequences, this is an area where market forces should be allowed to operate. One area where interventions can be helpful is career development for people already in the workforce. Such services are less developed in Australia than in other OECD countries.

The net effect of labour mobility on employers, including employers who invest in training, is uncertain. Some will gain, some will lose, but studies at firm level are needed to understand the impacts better. Sweet also challenges the view that 'jobs for life' are in decline. There is evidence from studies in a number of OECD countries that average tenure in jobs over the last few decades has not changed much.

Tom Karmel
Managing Director

The paper provides an overview of labour mobility and job tenure and their implications. It: summarises some of the more salient conclusions about mobility and tenure and their causes that emerge from major statistical sources and the research literature; outlines some of the policy implications of mobility and tenure, with a particular emphasis upon implications for skill formation and career development policies; and points towards some issues that could benefit from further investigation.

The Australian labour force is highly flexible. While the measures might not be perfect, workers seem more likely to change jobs than in almost all other OECD countries. Around 10% or more change their job each year, and of this number perhaps three in four change their industry, their occupation or both. Around twice this number experience significant change to the nature of their work but do not change jobs. Perhaps another 3% to 5% (although the recent data are not very good) make a significant locality change in association with their work, a rate that seems to be somewhat above that observed in Canada or the United States. Taken together, these figures do not suggest that Australia has a significant labour mobility problem.

Mostly, people change jobs because they don't like the one they have (although perhaps one in three of those who change has to leave their job involuntarily). Most people who leave their job do so when they are under the age of 35 years, and they are more likely to make the change if they do not have houses, mortgages and family commitments. Job changing is also more likely if people are on casual contracts or if they work for small enterprises that offer fewer prospects for career variety and career development. Organisational commitment to the person seems to matter, as well as personal commitment to the organisation. Although education and training per se do not seem to be strongly related to mobility, when people who have post-school qualifications change their jobs, they seem to be much less likely to change their industry or their occupation, and more likely just to change their job, than are people without post-school qualifications. The overall state and nature of the labour market also seems to influence mobility, as do personality factors such as a willingness to take risks and have the skills to manage their own career, but the impact of these factors should not be exaggerated above other factors. Changing jobs doesn't appear to have a major impact upon people's earnings, but it does seem that it increases happiness, skill development and skill use.

It is hard to see any consistent attitude towards the desirability or otherwise of either tenure or mobility across a number of areas of Australian public policy. Some policies pull in one direction, some in the opposite, whether by intent or not. Some influence some forms of mobility, but leave others largely unaffected. Examples include policies that relate to education and training, retirement income, wage fixation, home ownership, family support, unfair dismissal, and occupational licensing. Many of the major factors that influence tenure and mobility do not appear to be readily open to direct policy intervention. And it is hard to identify common interests in either tenure or mobility among either enterprises or individuals. For these reasons policies intended to influence either mobility or tenure seem difficult to design and target if they are not to have unintended consequences. The most sensible assumptions for policy are that rigidities that reduce the dynamism of the labour market should be avoided, and that policies that maximise individual happiness and skill development should be promoted. Over and above this, firms and individuals should be left to sort things out for themselves. This suggests that it makes a great deal of sense for governments to focus upon policies to improve people's career development and thus their job satisfaction, whether these are achieved through job changing or through job tenure. Such policy stances are likely to benefit both individuals and enterprises.

Further work is suggested to enable a better understanding of the: costs and benefits of mobility and tenure for firms; the ways in which occupational qualifications appear to limit mobility between occupations and between industries; and how the market for career development services for adults operates and can be improved.