Guest Blog by Rebecca Dunne
Zero hours contracts, the relatively new phenomenon of the 21st century today – where we can work to suit the needs of parenting, caring, education, illness and other priorities. It includes employment terms that are not contracted, set days and hours, instead is suitable to the employee and their personal life, replacing the traditional 9-5 work life. Employees are called in when they are needed, typically to fit business requirements.
Some background for you…Zero Hours contracts have been around for a while, yet have become more prominent recently as a way for employers to work around the European Working Time Directive. This directive gives part time employees the same rights as full time employees. Having Zero Hours Contracts, means companies don’t have to give the same rights to all employees– Zero Hours contracts only entitle the minimum wage to be paid, no maternity benefits or holiday pay is expected, for example.
There are many view points on these employment terms: what is your view?
Work life balance
Many people enjoy such offerings due to the work life balance promised. Having such flexibility, and no specific hourly requirements, means more time exists for home activities such as caring for others, housework, catching up with friends. Not only does this bring social benefits for individuals but it brings mental health positives. Personal control can be taken as having no contracted obligation of hours, allows the shifts you have been offered, to be turned down. As a result, employees suffer less stress and pressure, especially regarding getting the time off you need and having to not turn up to a shift – as there are no obligations to have to accept what employers give. However, a potential flip side is of course that you would be living ‘on call’, with plans always at risk of being changed due to being called in to work– is this suitable for you?
Some like these non-specified hours as they can do ‘a bit on the side’ and mix their tasks to get extra income. Shifts may be shorter but taking up a selection of these will provide great variety and many smaller incomes, contributing to a larger lump sum. It becomes a convenient way to make money.
Employers enjoy such a phenomenon as it means they can matchtheir staffing levels to the needs of the business. For example, at busy periods, staff can be called in, yet when it is quieter and there is less work, staff are not required to work. this contrasts to if contracts were given where the organisation would have to provide work and a salary to staff, in all times of the business. Therefore, labour costs can be saved and flexible to suit the organisation’s needs, satisfying employers.
Lack of communication
Only working when being given hours, means no set shifts are given. As a result, the shifts received will tend to be a variety – working on all types of days, with different people being seen. As a result, less communication, collaboration and consistency occurs. Also, not being with the workplace so much, means lack of knowledge about what is going on within. This could provide difficulties for the company as a whole, who could suffer from any errors you make due to a miscommunication or not being kept in the loop. For example, an order for a pair of shoes to be delivered on Thursday, may come in on Monday, when you are working. On Thursday, you are back in work, having two days off, and you prepare this order, ready to be sent. Little did you know, that on Wednesday, the customer had called up and changed the address for the order to be delivered to. As you was not their on Wednesday to receive this information, because there was not enough business requirements for you to work on this day, you failed to deliver to the right address. As a result, the company suffers from a dissatisfied, unhappy customer, who failed to get the required goods. This costs the business – as because of zero hours making communication and staying ‘in the loop’, harder.
People on zero hours tend to be less loyal to organisations– understandably because they are treated less important by firms themselves. Not having any need to provide work to employees, means they are seen as a cost, rather than an asset. Instead of being looked after with the luxuries and benefits contracted staff can enjoy, they get minimal, basic terms. This lack of commitment can bring all sorts of issues, including lacked motivation and higher turnover.
A big disadvantage for employees who engage in zero hours terms of employment, is that the income received is uncertain. Each week, each month, the hours you work vary, hence there is no certainty to what you earn –this is a massive problem, especially to those who need a stable income for paying bills, mortgages and daily needs. What if one week you are given only 5 hours of work due to the nature of the business being not busy – can you survive such a low income for that week? For some, this wouldn’t be liveable. Of course, the flip side to this point is for employers – who as mentioned before, can benefit from the saved costs of not having a fixed amount to pay all employees.
Perhaps this question is dependent on the type of employee…are zero hours more suitable for millennials? Students? Working parents? Will they continue rising? What do you think?
Rebecca Dunne, the author, is the freelance writer for KSA Group, who are Licensed Insolvency Practitioners in the UK, established in2000. KSA Group run www.companyrescue.co.uk which contains over 2000 pages of useful information for struggling businesses.