Working time is one of the most controversial issues in Austrian labour relations. Employers want more flexibility while workers want fewer working hours. A new study of employees in the electrics and electronic industry identifies what types of employees would prefer to reduce their working hours and provides the first feedback on the use of the 'free time option’, which enables employees to choose a wage increase or equivalent free time.
About the study
A study published by the Austrian Institute of Economic Research (WIFO) examines factors that determine employee's desire to reduce their working time. The study, which analyses both quantitative and qualitative data on employee preferences, asks whether employees regard shorter working hours as beneficial and, if so, why. It looks at the ‘free time option’, which was introduced in the 2013 collective agreement of the electric and electronics industry and which enables employees to choose between a wage increase (agreed annually and collectively) or equivalent free time.The study is part of the Welfare, Wealth and Work for Europe project (WWWforEurope), which is researching a long-term development strategy for the European Union.
Background
Austrian employers want to have more flexibility in setting the working time of their employees and have called for the daily working time limit to be extended to 12 hours under certain circumstances (this would apply, for example, to business trips and would be compensated with time off in lieu). The trade unions, however, are backing a general reduction in working hours. They are also pushing for an entitlement to a sixth week of holidays for everyone who has worked for 25 years, not just those who have been with one company for that time.
Research questions
The study uses a mixed-methods (quantitative and qualitative) approach and the research questions differ accordingly. The quantitative part, based on a secondary analysis of Austrian Labour Force Survey data, focuses on one main research question: what characteristics are associated with people who want to reduce their working hours? The qualitative part focuses on the use of the free time option in the electrics and electronics industry. The study looked at one large company in particular, where many employees have chosen the free time option, and asked them the reasons for their choices.
Methodology
The quantitative analysis used a binary logit regression model to examine the employee characteristics that predict their preferences to reduce their working hours. The characteristics were categorised in four groups:
- sociodemographic factors;
- household and family characteristics;
- employment conditions;
- extrinsic motivators (hourly wage).
The qualitative part consisted of 3 expert interviews and 17 problem-centred interviews with employees (9 with employees who opted for the free time option and 8 with employees who preferred the wage increase).
Results
The quantitative analysis conceptualises employee preferences by comparing actual working hours with preferred normal working hours. Different groups were constructed based on this comparison:
- increasers (people who want to work more hours);
- non-changers (people who want to work the same hours);
- reducers (people who want to work less);
- stoppers (people who want to stop working).
Non-changers are by far the largest group (73.6%), followed by reducers (17.5%) and increasers (8.8%), while the number of stoppers is marginal (0.1%). In terms of sociodemographic factors, reducers are older and more highly educated than non-changers. Mothers of young children prefer shorter weekly working hours whereas, in general, fathers have no preference.
Reducers are overrepresented among white-collar workers and more likely to be working in larger companies. Occupation has a big impact: women in elementary occupations (ISCO-08 categories 9 and 0) are 25% more likely to be reducers than female service workers (ISCO-08 categories 3, 4 and 5: technicians and associate professionals, clerical support workers, and service and sales workers). Men in elementary occupations are 20% more likely to be reducers than male service workers.
An interesting and unexpected result is that higher hourly wages have no effect on a person’s inclination to work less. However, the higher the actual weekly working hours, the more employees would prefer a reduction. The results of the regression models show that working eight hours more per week than the norm doubles the odds of wanting reduced hours. The author concludes that this evidence, combined with the high incidence of non-changers, suggests that the prevalent working time norm strongly shapes employees’ working time preferences.
Comparing the characteristics and motives of employees who opted for the free time option and those who did not, the qualitative analysis concludes that those who chose the free time option (mostly people with higher educational levels) did so for an intrinsic reason: to have more time for themselves, their families and their leisure interests. In contrast, the group of employees who chose the pay rise did so because of extrinsic motivations related to work or particular personal reasons. Wages and money played an important role in this group but more in terms of a long-term perspective based on social security considerations, such as pension levels. A major obstacle to choosing the free time option is the difficulty in taking any time accrued because of big workloads. Some workers would also rather keep their weekly working hours the same, but have longer holidays or additional long weekends.
Commentary
The authors conclude that existing working time norms have a strong impact on employees’ working time preferences. It follows, then, that the high number of non-changers is not an argument against reducing weekly working hours. Second, the use of the free time option for longer holidays or additional long weekends would support the unions’ position on the sixth holiday week. In autumn 2015, PRO-GE, the production union, brought two demands to the annual pattern-setting collective wage bargaining round for the metalworking industry:
- implementation of the free time option in the sector;
- a sixth holiday week after 25 years in employment.
Employers and the Austrian vice chancellor rejected both demands. The employer organisation the Association of the Machinery and Metalware Industries (FMMI) abandoned the first round of negotiations, returning to the table only after the unions had issued an ultimatum. Nevertheless, the issue of reduced working hours is now firmly on the agenda for public debate.