The production processes at many firms rely on a highly choreographed and interdependent network of workers performing specialized jobs. We designed and implemented a targeted employer survey to measure the extent of coordination in work processes. We link this firm-level coordination measure to administrative data and find that firms with a more coordinated work process are more productive, pay higher wages, and experience lower worker turnover. Yet, these firms suffer more severe negative consequences from unexpected worker absences and adopt various strategies to mitigate such risk, the reliance on which we document. We also find that more coordinated employers suffer worse consequences of negative aggregate shocks. Finally, we discuss policies that may encourage firms to adopt more productive coordinated work processes by increasing the resilience of coordinated employers to negative idiosyncratic or aggregate shocks.
Bibliographical noteFunding Information:
We thank Patrick Gleiser, Sophie Hensgen, Jens Stegmaier, and Stephanie Wolter for their outstanding support in working with the BeCovid and BHP data at the IAB and Christina Brinkmann for outstanding research assistance. We thank our discussant Benjamin Pugsley for his comments and suggestions to improve the paper. We also thank the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) under Germany’s Excellence Strategy – EXC 2126/1 – 390838866 and the CRC TR 224 (Project A03) for financial support. The authors acknowledge the generous funding of the research cluster ECONtribute that sponsored the survey at the core of this research.
© 2023 Elsevier B.V.
- Economic resilience
- Labor markets
- Work process