CIPD report on zero-hours and short-hours contracts reveals the polarity of the debate

It is no surprise to see the CIPD's new report on zero-hours and short-hours contracts come under attack this morning from the TUC and other commentators.‎ Some commentators appear to start from the position that there simply is little or nothing positive to say about zero-hours contracts, and that any evidence to the contrary is therefore either biased or flawed.  The CIPD’s position on zero-hours contracts, and our guidance to employers, has been based, as much as it can, on robust evidence from all sources, including our own surveys of employers and employees as well as case studies of employers using zero-hours contracts.

A central finding of our latest study is that zero-hours contract employees report, on average, similar levels of job satisfaction, personal well-being and work-life balance to employees as a whole.  No doubt it sounds counter-intuitive to many, but that doesn’t mean the data must somehow be at fault.

The employee survey used in the study collected data from just over 2,500 employees, drawn from the YouGov panel.  Because we know that zero-hours contract and short-hours contract employees form relatively small proportions of the workforce, we asked YouGov to “oversample” these groups – in other words, collect more responses from these groups than if it was a simple random draw.  This is a commonly used practice when trying to survey small minorities within a population.  As a result, our survey sample contained 368 zero-hours contract employees.  When it comes to statistical reliability – in the sense of standard errors and confidence intervals surrounding a particular estimate – it’s the number of responses which is the key parameter, and it is a case of more is better.  But many studies will report percentages based on far fewer than 368 observations.  Even with a survey as vast as the ONS Labour Force Survey, if you start segmenting zero-hours contract employees by combinations of age, gender, region etc., then the number of actual responses does quickly get very small indeed.  The actual percentages quoted in the report are weighted to be representative of employees as a whole – this corrects for the over-sampling of zero-hours contract employees and also aligns the sampled data with the national population on key characteristics like sector and industry of employment, full-time/part-time working, gender etc.  Full details are provided in the report.

A different critique of the data might be that the sample from which the employees were being drawn – in this case, the YouGov panel – was somehow unrepresentative of the population in ways that cannot be corrected for by weighting.  This critique can potentially apply to any survey, no matter how big or small, and it is hard to prove it might not be a problem.  We would note here that the YouGov panel is widely used for surveys on all types of issue, including by critics of zero-hours contracts, such as these recent statistics on bullying at work published by the TUC.  In addition, where we are able to compare our employee data with the ONS Labour Force Survey findings for April-June 2015, we find similar results.  For example, the mean hours usually worked by zero-hours contract employees were 25.1 hours a week in the LFS and 23.9 hours in our employee survey.

Of course, we do not have data from the LFS on job satisfaction or perceived work-life balance, which is precisely why these questions were included in our survey.  However, the LFS does provide data which suggests that many zero-hours employees may be reasonably satisfied with their working arrangements, in the sense of not wanting to change them – 36% want additional hours and 22% want a new job, but 59% want neither a new job nor additional hours.

In our view, the finding that, on average, zero-hours contract employees report similar levels of job satisfaction, personal well-being and work-life balance to the population of employees as a whole suggests there are positive as well as negative aspects to zero-hours contract work.  A potential positive is that zero-hours contract employees are less likely than employees as whole to say their workload is excessive and, as a result, less likely to say they are put under excessive pressure on a regular basis (which is bad for job satisfaction and for physical and mental health).  Potential negatives are reduced perceptions of being involved in the workplace and having opportunities to learn and grow.

When looking at these data, we also have to remember that the majority of zero-hours contract jobs tend to be concentrated in low skill, low paid parts of the economy.  The difference in hourly earnings between zero-hours contract employees and employees as a whole present in the LFS data probably reflects this concentration because, when we asked employers using zero-hours contracts, 79% said they paid zero-hours contract workers the same (or a higher) hourly wage rate as other workers doing the same job – just 9% said they paid a lower rate.  This – and the concentration of zero-hours contracts in part-time employment – may also help to explain the difference in perception of opportunities to learn and grow.

The data also show that part-time employees who want to work additional hours report, on average, significantly lower job satisfaction, personal well-being and work-life balance than part-time employees who are satisfied with their hours.  Clearly, underemployment has negative effects on well-being.  However, the data suggests this is a general problem affecting all forms of part-time work regardless of contract type and not one restricted to, or particularly acute for, zero-hours contract employees.

This last finding is a reminder that issues such as insecurity, low pay and lack of progression transcend contractual type.  Employees with open-ended contracts are often just as likely to be affected as employees with “non-standard” working arrangements.  Excessive concentration of fire on zero-hours contracts could divert attention away from a broader need to deliver fair and flexible employment practices that benefit all types of workers.

Thank you for your comments. There may be a short delay in this going live on the blog page as we moderate the comments added to our blogs.

  • Anonymous
    Anonymous

    Just out of curiosity how many of your office staff at the CIPD are on zero hour contracts?

  • Anonymous
    Anonymous

    There is no doubt that anecdotal evidence and survey data are very important when we are developing policy. I understand that.  But we also need a clear vision of the kind of society that we want to create...the kind of employment market about which we, as a country, can feel proud.  I would argue that most advances in civilisation have occurred without a great deal of reference to pollsters. They were value driven.  

    Of course we need to reflect and respect the demands of the surveyed, but we shouldn't use the results as an excuse to avoid wrestling with the ethical choices we face.   I offer the example of an 86 year old black woman in the US, Mary Anderson,  who strongly defended slavery. "I think slavery was a mighty good thing for Mother, Father, me and the other members of the family, and I cannot say anything but good for my old marster and missus, but I can only speak for those whose conditions I have known during slavery and since. For myself and them, I will say again, slavery was a mighty good thing".

    Her comments were heartfelt and clear.  Her experience real. But it does not change my belief that slavery is wrong.


  • Apologies...I had no intention of making my previous comments (above)anonymously.  I had simply forgotten how to log in!

  • Anonymous
    Anonymous

    I have part time job and two zero hours contracts. I also have a cipd qualification. I feel lost in the job market, stuck , anonymous and lacking improvement in the future I have worked full time for 34 years my income is the lowest since leaving school and can I make work wrk for me for the next 17 years til I get my pension at 67? We live in a society of have and have nots where job security and financial security is concerned . I never imagined my working life would have stalled like this. I can't be sure if I will work mon tues wed thurs fri sat or sunday that's the reality of the flexible market

  • Anonymous
    Anonymous

    I do not agree that this is the case across the board my daughter works in the hotel industry as a beauty therapist. She loves her job has gone through 3 years of training to do it but she has her hours cut regularly. She has no job security, can't afford to pay rent as she is on minimum wage. These so called prestigious hotel and Spa' we all like to go to charge £80 for a massage and then pay the girls a pittance. Then they cut there hours if she didn't have us she would be on the breadline. I understand the need for this type of contract but it is abused!!!  

  • Anonymous
    Anonymous

    There are those who are going to be happy on a ZHC and those that are not, the simple answer for those who are not happy is to find a different full-time job that offers them the security that they are looking for, as I have always said from when  I started work over 29 years ago. If you can't get what you want or need, don't bitch, just switch - besides a short period of 6 months unemployment when I was made redundant, I have always been in work, there are the jobs out there - go and get them...


  • Zero Hours contracts will work for some.. for example where people need to have flexibility due to caring commitments etc, some will even be paid enhanced rates compared to full time staff, but for others, they simply have no choice but to take a zero hour contract, because that is the only option out there for them (apart from a life on benefits). For many of these people, it must impact on their health and wellbeing, as they are not sure when they will be working one week from the next. Any uncertainty around employment, and how much money you will have coming in to meet your basic needs, must be a bitter pill to swallow.

  • Anonymous
    Anonymous

    Of course well off people who love flexibility will love zero hours contracts. Running a job club where low paid people have to live with the insecurity of both low pay and unknown numbers of hours (even wasting money to turn up to find no work), I see the pernicious nature of a device to put all risk onto those who can least afford it.

    This type of CIPD  article with its provocative headline does no service to THIS group of people who are in no position to look after their own interests.

  • Anonymous
    Anonymous

    Why is CIPD being so defensive about reactions to a poll which some see as not giving a representative picture?  Yes, ZHC work for some people but for many they are something to cling on to to avoid falling into the chasm of unemployment. Also try to get a loan or a mortgage on a ZHC  - you wont get very far.  As for the suggestion of 'get on your bike' and find a job, well that suggestion clearly comes from someone who hasn't had to undertake this soul-destroying task in recent years.

  • Anonymous
    Anonymous

    Unfortunately all the criticisms tar all employers with the same brush and don't take into account that there are different business types.   Businesses that use zero hour instead of  salaried as they think it gives them easy get out and will be less onerous on them should indeed be slammed.  Not all of us operate that way.  'Casual staff' are essential to our business as we are in tourism so have massive peaks and troughs.  Where we can we offer salaried contracts or minimum hours contracts, but zero hour contracts are still very important and are mostly used for students as they can't work regularly.  I'd say around 90% of our employment terms apply equally to all contracts but zero terms are more beneficial to employees that salaried contracts in that they don't have to accept the hours we ask them to work and they're free to work for other employers as well.

  • Anonymous
    Anonymous

    Where someone has a zero hours contract as a second job or as a way of supplementing their personal or family income then I can see the advantages and understand how they would be only too happy with the arrangement.  Where your only income is reliant on a zero hours contract then you are in a totally different position, no guarantee of hours or income each week and so no ability whatsoever to plan your life.  You are the mercy of managers who have no need (and little incentive) to use any other strategy than fear to manage staff because those staff appear to have no employment rights whatsoever.  That is the reality of zero hours contracts in the service industries.

  • Anonymous
    Anonymous

    Shame on you for publishing such a shoddy piece of research on such tiny numbers. At least have the grace to face that as usual , your bias is towards what management want to hear.

    Try researching a reasonable number of employees , try talking to people who want to get off benefits but cannot take the risk of zero hours contracts, or those threatened with losing all hours if they don't want to work all the hours allocated. Some, like McDonalds, seem to operate a fair system where staff can input onto a computer the hours they are available, other companies rely on local managers to sort it out.

    Oh, and I can at least admit my bias, , I currently work in the NHS in Mental healthh secondary care, we treat a fair number of people who have become ill at least partly due to the pressure from companies, and a lot of peple who are unable to find any job that offers security, ie: not zero hours contracts.

  • Anonymous
    Anonymous

    There are employers for whom a ZHC offers opportunities to exploit employees and there are employers for whom varying work-levels and/or delivery timing of products or services make ZH working the only cost-effective means of operation.

    Our increasingly 24-7 internationalised commercial reality is also increasingly making it difficult for workers needing fixed-hour-daytime-only contracts to find work (at all levels) because more and more organisations are requiring part-time, shift, or irregular hours working and management as part of their required customer-service provisions. For those workers with immovable commitments (child-care being the obvious one) the ZHC offers opportunity of employment, for one or more employers, which can be fitted around their other commitments and for the employers allows response to demand when it exists and not just when they have workers on hand to satisfy it.

    Working Mon-Fri 9-5 when your primary market of the moment for your service is in Australia or HK is not going to work, is it? But if your next contract is going to be requiring services in London or NY, neither is having people working fixed shifts or (even less satisfactory) permanent night-contracts.

    Make ZHC contracts reflective of the T&Cs of PFT contracts and the problem is solved. People can work when they can (or want to) and employers can adjust their employee-numbers on each type of contract to suit their businesses. The need is not to get rid of the ZHC, but to get rid of the DINOSAUR in the room, in the shape of PFT working being the only form of protection against exploitation (which it never has been, in reality).

    If the TUC (and CBI) turned their attentions to getting rid of the exploitation of (particularly) low-skilled work(ers) instead of arguing about a problem which need not exist and is in fact a potentially significant advantage (to both sides) then we might get somewhere!


  • The submission above starting: "There are employers for whom a ZHC offers opportunities..... " should have been under my name, not "Anonymous."

    It seems the site doesn't love me any more :-)

    Peter Cunningham

  • Anonymous
    Anonymous

    A problem with a survey asking ill-informed and legally illiterate staff if they are happy with the way it is, is that if the staff were properly informed then their perspective may be different.

    I must assume many taking part in this survey are such, as I spoke to a doctor yesterday who thought that staff on zero-hour contracts were not entitled to holiday pay at all, because when the employer tells the employee that he or she is getting no work next week, a no pay break from work is effectively a holiday was his assumption.  

    How many of the surveyed know that they should be receiving holiday pay equal to their average pay over the last, let's say, 12 weeks? How many staff are? And would they view their employer and their contract favourably, especially as I have experience of many cases where a loss to the employee amounts to well over £1,000.00, per year, for many years. And that is even when they know that they are entitled to such pay, the employer will still underpay its staff because maths is hard and employees assume that employers must be acting lawfully.

    How many, without knowing that their employer is duping them, accept that their employer is entitled to 'do them' out of sick pay because if they were to phone in sick they believe that is tantamount to not making themselves available for work, and are therefore entitled to sweet nothing? Many employees assume this to be the case.

    I shall not bore everyone with a long list of these types of things, but it is long.

    And, of course, it is a survey by the HR industry, an industry whose members employ and benefit from the use and misuse of these contracts. It's comparable to, and should be treated with the same scepticism, a survey asking about the benefit of smoking, commissioned by the tobacco industry.

    Just in case this comes out as anonymous, this was posted by Keith Crossland