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Zero-hours contract employees as happy as permanent, full-time employees

  • 04 Dec 2015

Less pressure and better work-life balance supports personal well-being among zero-hours contract employees

New survey evidence published today suggests that, on average, zero-hours contract employees experience similar levels of job satisfaction, work-life balance and personal well-being to employees on permanent, full-time contracts.
The research from the CIPD, the professional body for HR and people development, also finds that zero-hours contract (ZHC) employees report comparable satisfaction levels in their relationship with their managers and colleagues. However, the report also shows that, while the majority of zero-hours employees choose to work part-time, they are more likely than part-time employees as a whole to say they would like to work additional hours.

The research also updates the CIPD estimate of the number of employees on zero-hours contracts, which has increased from 1 million in 2013 to 1.3 million in 2015. Other key findings from the research, which draws on data from the ONS Labour Force Survey, the CIPD’s Employee Outlook survey and Labour Market Outlook surveys include: 

  • The mean personal well-being score (on a scale with a minimum of zero and maximum of 40) is 26.2 for zero-hours contract employees, compared to 25.6 for all employees (employees with all types of contracts and working arrangements).
  • The proportion of zero-hours contract employees who are either very satisfied or satisfied with their jobs is 65%, compared to 63% for all employees. Zero-hours contract employees are also more likely to say they have the right work-life balance (62% compared to 58% for all employees) and less likely to feel under excessive pressure at work every day or at least once or twice a week (32% compared to 41% for all employees)
  • Nine in ten part-time zero-hours employees (88%) say they choose to work part time but 22% of these part-time zero-hours contract employees would like to work more hours, compared to 18% of all voluntary part-time employees.
  • The report also presents the first comparable data for employees on short-hour contracts (those where employees are guaranteed up to 8 hours work per week) and shows that short-hours employees have an especially positive view of their situation with 74% agreeing they have the right work-life balance. Also, just 14% feel under excessive pressure at work at least once or twice a week, compared to 41% of all employees.
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 zero-hours contracts employees don’t always see their jobs in such a negative light. On average, they find their jobs as satisfying as other employees which suggests that zero-hours contracts 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 a negative. That’s why it’s important to understand that this type of working arrangement may not suit everyone.
“What our report highlights is that the contract type isn’t usually the main factor driving someone’s job satisfaction. How people are managed, the workload they are under and their relationship with their line manager are usually more important. We all want to see better working lives for everybody but if we simply focus on zero-hours contracts as the source of poor quality working lives, we risk ignoring the bigger systemic issues which create low skilled and low quality work.”
The report also points to areas where there is room for improvement in how employers use zero-hours contracts, particularly in terms of career progression and involvement. Less than half (43%) of ZHC employees feel fully or fairly well-informed about what is going on at work, compared with 56% of all employees. Also, a higher proportion of ZHC employees see fewer ways to progress and improve their skills, despite 82% of employers saying their ZHC staff are eligible for training and development.
The CIPD does not believe the available evidence provides enough justification for going beyond the ban on exclusivity clauses already enacted. It does argue that greater transparency on employment status is required and that some employers still need to develop proper, written procedures covering the cancellation of work and termination of a contract. Employees are currently entitled to a written statement of their terms and conditions within two months of commencing employment and the CIPD recommends a change in the law to extend this entitlement to all workers.
Mark Beatson, Chief Economist at the CIPD, comments: “In the operation of zero-hours contracts, as in all forms of employment, there is scope to improve practice. The key principle for the effective and ethical use of zero-hours contracts is that, wherever possible, the flexibility they offer should work for the individual as well as the employer. Well-managed zero-hours contracts can be an effective means of matching the needs and requirements of modern business and modern working lives, but as the numbers continue to rise, it’s important that employers understand how to make this match. And we’re seeing an increasing number of people on zero-hours contracts for long periods, years in some cases, so getting this match right is more important than ever.”
Thinking about using zero-hours contracts?  
  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?
To download the full report, click here
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