Technological Progress, Organizational Change and the Size of the Human Resources Department

Abstract

Innovative workplace practices based on multi-tasking and ICT that have been diffusing in most OECD countries since the 1990s have strong consequences on working conditions. Available data show together with the emergence of new organizational forms like multi-tasking, the increase in the proportion of workers employed in managerial occupation and the increase in skill requirements. This paper proposes a theoretical model to analyze the optimal number of tasks per worker when switching to multi-tasking raises coordination costs between workers and between tasks. Firms can reduce coordination costs by assigning more workers to human resources management. Human capital is endogenously accumulated by workers. The model reproduces pretty well the regularities observed in the data. In particular, exogenous technological accelerations tend to increase both the number of tasks performed and the skill requirements, and to raise the fraction of workers devoted to management

Keywords: Information Technology, Organizational Change, Human Capital,

JEL Classification: J2, L2, O3, C6