Annual EBHS Conference, 39th Annual Economic and Business History Society Conference

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Internal Labor Markets in Large Organizations in late-19th and early-20th Century Australia and the United Kingdom
Andrew Seltzer

Last modified: 2014-03-10

Abstract


 

This paper summarizes a broad on-going research agenda on the nature of employment relations in large firms in Australia and the United Kingdom. There are two reasons why the focus is restricted to larger employers. First, large firms employed a growing proportion of the workforce over the 19th and 20th century and thus understanding their practices provides considerably (and increasing) insight into the workings of labor markets. Second, and perhaps more pertinently to a project of this nature, large firms needed to keep meticulous records about their employees. In many cases these records have survived to this date. This has made it possible for scholars to create long-term panel data sets which cover all employees within an organization over an extended period of time, or, alternatively, to cover large numbers of employees within an organization over their entire career at the organization. This project uses large data sets from three employers (the Union Bank of Australia, Williams Deacon’s Bank (UK), and the Victorian Railways (Australia)), and several much smaller data sets from other employers. In addition, evidence from these data is compared to a range of qualitative evidence from a variety of other employers. The data typically contain some sub-set of the following information: name, date of birth, prior experience, date of initial employment at the firm, date of an wage or position change at the firm, date of exit, annual salary, position held, and branch of employment. In most cases, these data are recorded annually, although in the case of the Victoria Railways, it is triennially.

 

These data are then used to examine employment practices at these firms in the context of modern economic theories of labour contracts. Among the questions that I have examined with these data are the following: To what extent are contracts long-term? To what extent do employers defer compensation in order to retain employees and prevent moral hazard? To what extent are promotions used as an incentive mechanism? How did career interruptions due to war-time enlistment affect ultimate career achievements? To what extent were nominal wages within organisations rigid downwards and was this less commonplace during periods of extended deflation? How were women’s career outcomes different from their male counterparts? How did the arrival of women at a firm affect the salaries and career prospects of their male counterparts? The evidence on these questions differs slightly across industries and countries, but there is overwhelming evidence that large firms had sophisticated personnel management practices long before the arrival of human resource departments.