At the general election in May this year the Labour Party championed the issue of zero hours contracts with Ed Milliband stating;
“The next Labour government will ban zero-hour contracts for employees who are in practice working regular hours. This absolute new legal right to a regular contract will apply to workers after just 12 weeks.”
In response, the Guardian pointed out;
“the Conservatives claimed zero-hours contracts account for just one in 50 jobs and that only 2.3% of workers are on zero-hours contracts. Duncan Smith and others in the Conservative party, including the prime minister, argued that many people are happy on zero-hours contracts.”
The election of Jeremy Corbyn as leader has not diminished this issue. As the independent stated in October;
‘Following the election of the UK’s new Labour leader Jeremy Corbyn, zero-hours contracts are likely to move higher up the media agenda than ever before. This has been a significant part of Mr Corbyn’s campaign manifesto and, it’s safe to say, he is strongly opposed to them.’
But are they all missing the point?
A zero hours contract is a contract for work in which there is no obligation of an employer to offer work, and similar there is no obligation for the employee to accept it.
Zero hour contracts are not widely used and are generally used for unskilled jobs. The Office for National Statistics reported that there are 697,000 people in the UK on zero hour contracts at this moment in time, a statistic that equates to only 2.3% of the UK’s workforce. Many employers are given strong criticism from unions claiming that they are ‘unfair and exploitative’. But with such a small population of the country working in these positions, and many of them happy with the hours they do, why is it still seen as an issue?
Research collected by The Guardian shows that a quarter of all job-seekers in the UK were offered a zero hour contracts, and of that quarter over a half turned the job down. The Guardian also found that older job-seekers would prefer no job than a zero hour’s contract, due to the need for a guaranteed level of income and a lack of trust from perspective employers to give them enough hours.
According to zerhoursplus.uk, 34% of employees on zero hours contracts are 16-24, 39% are 25-49 and only 27% are over 50. Employers can hugely benefit from this as they do not have to pay staff if there is no work to do. However there are also many benefits for the employee too, employees have flexibility. For many people in the country, this is exactly the type of contract that they need. Students and parents are given the flexibility for other commitments such as studies or childcare. More mature employees are able to top up their retirement as and when they would like to do so, giving them the time they need to spend with family or take holidays.
Students on zero hour contracts are able to finance themselves through university at the same time as having the flexibility that they need in order to study, especially through exam periods.
So why are they missing the point?
The UK is crying out for skilled labour, most zero hour contracts are for unskilled labour. If the UK were to have a better-equipped workforce there would be less need for zero hour contracts. The European Union currently has a 20 million-person shortfall when it comes to skilled labour.
So how do we change this?
We need to focus on up-skilling our workforce.
Firstly young people need to leave school with more skills. According to tes.com, one eighth of young people in the UK are not in work, education or training (NEETS). This statistic needs to change, if younger people are coming out of education with the skills that our current market need, there will be less people in zero hour contracts that do not want to be working in a zero hour contract.
Tes.com claimed that the UK skills gap is far wider than any other developed country. Research carried out by tes.com showed that people in the UK looking to move from school to the workforce find it the most difficult due to a shortage in skills. The UK has a 12.6% gap in literacy, this is double the OECD (Organisation for Economic Co-operation and Development) average of 6.8%, whereas in Japan the gap was 0.3%. There is a 9.6% shortage gap in problem solving skills between NEETS and young working people, whereas in South Korea the gap was only 1.2%. This research shows that the UK needs our workforce to be more skilled when entering employment, training is key to the future of the job market.
According to ukces.blog.gov.uk, 16% of establishments say they have at least one member of staff that is not fully proficient, and of those asked 6% of their workforce are not fully proficient. Identifying that there is a problem is the key to fixing it, as shown in companies who have excellent Human Resources departments as they are more efficient with the skills gap.
The skills gap is most common in manufacturing businesses, with 21% of all businesses saying that they are short of skills. The skills gap can be found across all markets though, with new information stating that the IT industry is about to have an increase in salaries due to the shortage in skills they have forecasted for the future years. When facing a skills shortage, companies put up their salaries in order to attract the best talent.
To summarise, zero hour contracts are not an issue.
We need to Train, Train and Train our workforce.
If the unskilled workforce of the UK were to develop their skills and move into skilled positions, workers in skilled positions were to move into highly skilled positions and workers in highly skilled positions were to move into professional positions the UK skills gap would begin to lower.
Everyone who did not want a zero-hours contract could secure higher paid work with guaranteed hours.
Teagan Read, Manchester Metropolitan University:
“I like being on a zero hour contract whilst at uni because it gives me the flexibility to pick and choose when I want to work. It is not set hours each week which means if there is a period of time where I have work due for university I can decide not to work, and it means there will be no backlash. It also means that I can go home for the whole of the holidays which I have seen be an issue for other people in the past who are not on a zero hour contract. It fit’s my current lifestyle perfectly.”
Laura Harrison, University of Southampton:
“Working for catering companies throughout school and university really helped me develop so many transferable skills, particularly customer service and teamwork skills. Being on a zero hour contract was great as you can balance having a job around school and university commitments. Plus I was paid holiday pay on top of every hour that I worked which is a nice little bonus.”
Georgia Newman, Manchester Metropolitan University:
“Whilst in full time education, college and university, I found being employed on a zero-hour contract at Stockport County Football Club to be highly beneficial. It allowed me to absorb myself in my studies without the pressure of being tied into a job. It gave me the flexibility to work longer or shorter hours in accordance to the amount of college/university work I needed to complete. This low amount of pressure lead to me feeling less stressed and I, therefore, excelled in both my studies and in my job. I would recommend a zero-hour” contract to friends and family in full time education as it fits in perfectly around that lifestyle.
About the Authors
Chloe is a Business and Marketing student currently in her final year at Manchester Metropolitan University. Chloe has an internship at Evolution Recruitment where she has progressed to Team Leader of Social Media Interns, helping to manage a group of four interns.
As well as this, Chloe works as the Social Media Manager for Recruitment Training Group where she is in charge of Twitter, Facebook and LinkedIn as well as contributing to blogs.
Ian has had an impressive career to date spanning nearly 30 years in recruitment, talent acquisition, sales and training sectors.
Having worked as Sales Director for Hays Specialist Recruitment for 11 years, Ian understands the complexities of corporate resourcing and constructing high return client relationships. He has led the sale of Managed Services contracts with values of up to £20M per annum and delivered numerous long term high value partnerships.
As well as being a founder partner of Recruitment Training Group, Ian also runs the complimentary Selling Success business, offering consulting, coaching, training and education in business development and relationship selling. Ian’s enthusiasm for coaching doesn’t end there, as a qualified FA coach he enjoys motivating people to be the best in their sporting endeavours, as well as in business.