Recruiter Soapbox: Zero hours contracts
According to the CIPD, about 1 million UK workers are on zero hours contracts. Are they fair? They might strike you as an odd feature of today’s marketplace, apparently subverting a century of employee protection by allowing employers to turn the pay tap on or off at a whim. Critics claim they offer a very one-sided deal – giving employers the ability to micro-manage staff costs on an hour-by-hour basis. With a zero hours worker you can send someone home without notice, and never commit to the availability or steadiness of work. Many zero hours workers effectively work part-time, but most would like to work more hours.
The counter-argument of course is that it increases flexibility, allowing organisations to create new jobs and offer hours that some find helpful or convenient. Experienced workers are often moved onto more conventional contracts – but of course there’s no guarantee in law that this will happen within a given time period. The reality is that workers put up with the terms on offer, or move on.
What employers are perhaps learning the hard way is that this offers a very weak psychological contract. If you take someone on with virtually no willingness to invest in them or to guarantee even part-time hours, the employment deal begins with two unstated assumptions: we don’t really care, and we don’t expect you will either.
Despite decades of research into motivation, employers remain puzzled about what keeps workers engaged. We all gloss over what motivates us – many people say that pay is the impetus for career change, yet money is a poor tool for long term retention. Even a substantial pay increase or bonus has, for most people, a very short-term effect on work performance.
However, feeling undervalued has a long-term, repeated, continual effect on employee performance. If you want to turn staff into ambassadors for your employer brand generally it pays to make people feel involved, valued, and show them that their work makes a difference. It also appears to help to provide some autonomy – some degree of control about how and when a task is done. If you want people to feel like disconnected, uncommitted suppliers, zero hours contracts may do just that.
Time will tell whether these contracts work, and the only valid benchmark is not profitability but long-term job creation. If they lead to real permanent jobs, then they will remain as a necessary twilight zone between employee trials and proper engagement – in much the same way that unpaid internships provide a somewhat over-exploited but useful flexibility. In a year or two we will know whether zero hours contracts are simply a mechanism of recession, or a new symptom of the way our economy continues to mimic some of the darker aspects of foreign employment practices. What we can be certain of is that asking staff to turn up and shine when you’re not even guaranteeing them a day’s work can feel like a pretty shoddy deal and won’t build a committed workforce.