Workforce contracting and performance in knowledge intensive services: An intellectual capital view

Abstract

Purpose: The performance of service activities with high added value, offered by manufacturing companies, in the same way as those of knowledge-intensive services can be affected by the hiring of labor used in them. We study the impact of the use of contingent work (temporary and autonomous) on labor productivity in knowledgeintensive services. To develop hypotheses, the potential impact of contingent work on the intangible capital of the company, as well as the results of the empirical literature are taken into account. Design/methodology/approach: Data from a sample of 279 companies in knowledge-intensive services located in Catalonia are analyzed with two linear regression models.Findings: The results show that the use of contingent forms of employment, such as temporary employment and self-employed, have a negative impact on labor productivity. However, there is no quadratic relationship between these variables. Research limitations: The sample used comes exclusively from Catalonia (Spain), it is not perfectly extrapolated to all businesses with knowledge-intensive services and was obtained during the raising phase of the economic cycle. The design of the study is cross-section. The classification of knowledge-intensive companies is dichotomous, based on the sector they belong to. Practical implications: Decisions on hiring labor in services with high added value should minimize contingent forms of work, if they want to improve their productivity. Social implications: A production model that seeks to enhance the services added value services cannot rest on the basis of a labor market in which firms use a high proportion of contingent labor in its workforce. Originality/value: This study offers new data to the scant literature that links the use of contingent labor with productivity in the sector of knowledge-intensive services. The growing importance of high-value-added services, both in services and manufacturing companies, and the interest to know the determinants of their productivity justify the need for studies like the one presented.