Corks were popping last month, at least among us adults, when the 17-year-old son of a friend secured a ‘proper’ job after a year of work experience, internships and living as a NEET (not in employment, education or training). But the celebrations did not last long. He was told he need not go in on Monday, nor Tuesday, nor in fact for the rest of the first week. Nor did they need him the following Monday. Yes, he is the unwitting victim of the latest employment craze: the zero-hours contract.

Zero-hours contracts, whereby employers can engage people on an ‘as required’ basis, are on the rise. Earlier this year, the Workplace Employment Relations Study found that in workplaces employing more than 100 employees on zero-hours contracts, the number of people on them had risen from 11% in 2004 to 23% in 2011. Figures released by ONS last month revealed workers on these contracts had nearly doubled in number in the past decade to 200,000. Now, almost a quarter of UK employers are using them.

Retail is one of the biggest adopters, due to seasonal business. But it’s easy to see why other sectors are using them. They do not guarantee working hours, so employers only have to pay for work done. The cost savings are obvious.

Unsurprisingly, the unions hate zero-hours contracts, arguing they create insecurity and exploitation and can leave employees unable to gain a wage for up to a month at a time. But supporters note how many employees like the flexibility of such an arrangement - provided there is not an obligation to be on call.

It is flexibility such as this that has enabled a smaller rise in unemployment since the recession than was expected. I believe flexibility is vital to enable businesses to survive today. But zero-hours contracts need to be considered carefully. In HR we talk about the psychological contract: the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other. This ‘contract’ affects how employees behave day-to-day and has a bearing on issues such as productivity and engagement.

With zero-hours contracts, what employers call ‘flexibility’ will often be seen as ‘insecurity’. Then it won’t just be the hours that are ‘zero’ - but the employee’s engagement and motivation. The results of the government’s recently-announced review will make interesting reading.

Source

Siân Harrington