How too much insecurity at work is bad for business
New research from Learning and Work Institute shows that insecure work grew between 2011 and 2016 and may be reducing productivity growth.
Insecure work is one of the topics of our time. For some, increased flexibility over work can be a real benefit. For others, insecurity can make it difficult to make ends meet, to plan for the future, and to build a career.
New research by the Learning and Work Institute, commissioned by the TUC, shows one in ten workers is in some form of insecure work. Today 3.1 million people are in insecure work, up around half a million over the last decade. This includes those in zero hours contracts, but also low paid self-employed, those employed through agencies, and temporary workers.
The picture varies significantly by sector. The focus is often on new technology platforms (like Uber) and zero hours contracts, but it is actually a much broader issue. The biggest numbers of people in insecure work are found in education, food and beverage, land transport, and retail. Meanwhile the biggest rises over the last five years have been in food and beverage services and residential care.
Pros and cons
The debate on new forms of work is often caricatured as being bad for people and good for employers. In practice, the picture is more nuanced. Flexible forms of work can benefit many people.
And our research shows that too much insecurity is bad for employers, with some evidence of lower productivity associated with greater use of insecure work (though it is difficult to say one causes the other).
Technology is likely to lead to further growth in these different forms of work. And of course insecurity is about more than the form of your employment contract – you can feel insecure in a full-time permanent job, and agency at work is a broader issue too.
So there is a business case for looking at insecure work. And this is also a national economic case: Britain’s poor productivity performance is one of the things holding back living standards and restricting the money available for public services.
What should we do?
The first point is not to throw the baby out with the bathwater. Flexibility can benefit both people and employers, and the diversity of employment opportunities is one of the UK’s strengths.
However, this is not universally the case, particularly where there is an imbalance of power between workers and employers. So secondly there is a big role for trade unions to find new forms of organization for people in new forms of work – our research shows only 15% of people in insecure work are in workplaces with unions, half the rates for more secure forms of work.
Thirdly, there are macroeconomic questions about the path of the National Minimum Wage and boosting productivity more generally. The research shows how the type and incidence of insecure work varies by sector. So a tailored approach by sector is needed – the Industrial Strategy provides a context for this.
New forms of work and insecure employment are big issues, rightly attracting much attention. Our research shows where the challenges lie, and the impact this can have on both people and prosperity. The Taylor Review will in many ways be a key part of the debate in how to respond, it should be the start not the end.