In Chapter 2 it was argued that in terms of the employment relationship nineteenth-century employers pursued strategies of externalisation and did not develop strong internal labour systems. The predominant pattern of employment in British industry was one of loose association of employers with their labour force and of employees with the firms for which they worked. Firms relied on the external labour market for hiring and firing, they took labour on and laid it off as market conditions dictated, and most paid minimal attention to the training of employees. Wages were largely fixed according to external market signals and nonwage benefits were rudimentary. At the same time, however, a small number of firms pursued different strategies and developed something more like internal labour markets, with more complex and elaborate employment systems. During the first half of the twentieth century, this basic pattern did not change greatly. With the exception of wartime, labour market circumstances did not encourage major change and weak organisational structures and managerial hierarchies were a constraint on the development of more elaborate employment systems. However, there were some important developments during this period and this chapter investigates a number of diverse aspects of employment – the tenure of jobs, patterns of recruitment and training, the payment of wages, and the increasing importance of non-wage benefits.

The market context

The interwar years were characterised by large-scale unemployment sandwiched between periods of wartime full employment. The extremely tight labour market which developed during both wars produced some similar consequences.