January 19, 2016

Zero hours contracts could be more popular than you think

Employees on zero hours contracts could be just as happy as permanent staff, a new survey suggests.

The research, from the Charted Institute of Personnel Practice (CIPD), found that on average, zero-hours contract employees experience similar levels of job satisfaction, work-life balance and personal well-being to employee’s on permanent, full-time contracts.

In general zero hours contracts have often received bad publicity, but this recent research from the CIPD shows they’re more popular with employees that you might expect.  The research suggests that:

  • 65% of zero hours workers are either very satisfied or satisfied with their job compared to 63% for all employees.
  • 88% which represents the majority of workers on these contracts told the survey that it is their choice to work part time.
  • However, 22% would like to work more hours, compared with 18% of all voluntary part time workers.

These findings will come as a surprise to some people, as zero hours contracts have been linked with work-related stress in other studies, including recent research by the University of Cambridge.

It found that rising job insecurities and uncertainty about by zero hours contracts, short hours or minimum hour contracts has led to a significant increase in work-related stress.

Peter Cheese, Chief Executive of the CIPD comments:  “zero hours contracts are becoming a permanent feature of the UK labour market but they are often characterised as offering low-quality work on unfair terms which is inferior to permanent, full-time contracts.

Our research shows that, on average they find their jobs as satisfying as other employee that suggests zero-hours contract offer positives as well as negatives.

One positive is the flexibility they can offer to employees who otherwise may not be able to find work that suits them, but less involvement in the workplace may be negative.  What our research highlights is that the contract type isn’t usually the main factor driving someone’s job satisfaction”.

Before thinking about using zero hours contracts, here is what the CIPD advise:

1. Does the flexibility they provide work for both the organisation and employees?

2. Are they right for your business? Employing staff on zero hours contracts is about more than addressing supply and demand, you’ll need to consider whether they’ll strengthen your working culture and enhance your employee brand. If there are doubts, consider alternative means of providing flexibility.

3. Do you have the capabilities in place to train line managers to manage zero-hours contract staff in line with their employment status? Without the necessary management practices in place, those on zero-hours contracts are likely to face problems understanding their role, improving their skills and integrating into the workforce.

4. Employees on zero hours contracts should receive comparable rates of pay to other staff doing similar work.

5. Spend time drawing up zero hours contracts and understanding what they mean for you and the individual. All employees should receive a written copy of their terms and conditions regardless of their contract type. You should consider what compensation you would offer if pre-arranged work is cancelled at little or no notice, and plan to conduct regular reviews to check that the reality of the employment relationship matches the contract.

6. Employers generally use zero hours contracts for a relatively small proportion of the workforce. If you plan to put the majority of your workforce on zero-hours contracts, are you prepared to explain your reasons to them and other stakeholders?

In conclusion

Zero hours contracts can be an effective means of matching the demands and requirements of current business demands and the modern working lives, but it’s important that employers understand how to make this match.  The types of contracts are not necessarily a long term solution, so getting the right match is more important than ever.

Further Advice

Our Advice Line is on hand to provide support and advice regarding this or any other employment-related issue.  Please contact us call an Advisor on 0844 391 1921 who will be happy to help.

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About the author

Stephen Johnson

Stephen has over 25 years experience in private sector HR and management roles, working as a Manager for over 10 years and eventually moving into the financial services industry. In his current role as an HR Policy Review Consultant he develops, reviews and maintains our clients’ employment documentation. With extensive knowledge of management initiatives and HR disciplines Stephen is commercially focused and supports clients in delivering their business objectives whilst minimising the risk of litigation.