CIPD report on zero-hours and short-hours contracts reveals the polarity of the debate

The CIPD have recently issued a new report on zero-hours and short-hours contracts which unsurprisingly has come under attack this morning from the TUC and other commentators.‎

Some commentators appear to start from the position that there simply is little or nothing positive to say about zero-hours contracts, and that any evidence to the contrary is therefore either biased or flawed. The CIPD’s position on zero-hours contracts, and guidance to employers, is been based, as much as it can, on robust evidence from all sources, including their own surveys of employers and employees as well as case studies of employers using zero-hours contracts.

A central finding of from the latest CIPD study is that zero-hours contract employees report, on average, similar levels of job satisfaction, personal well-being and work-life balance to employees as a whole. No doubt it sounds counter-intuitive to many, but that doesn’t mean the data must somehow be at fault.

The employee survey used in the study collected data from just over 2,500 employees, drawn from the YouGov panel. Because the CIPD know that zero-hours contract and short-hours contract employees form relatively small proportions of the workforce, they asked YouGov to “oversample” these groups – in other words, collect more responses from these groups than if it was a simple random draw. This is a commonly used practice when trying to survey small minorities within a population. As a result, the survey sample contained 368 zero-hours contract employees. When it comes to statistical reliability – in the sense of standard errors and confidence intervals surrounding a particular estimate – it’s the number of responses which is the key parameter, and it is a case of more is better. Many studies will report percentages based on far fewer than 368 observations. Even with a survey as vast as the ONS Labour Force Survey, if you start segmenting zero-hours contract employees by combinations of age, gender, region etc., then the number of actual responses does quickly get very small indeed. The actual percentages quoted in the report are weighted to be representative of employees as a whole – this corrects for the over-sampling of zero-hours contract employees and also aligns the sampled data with the national population on key characteristics like sector and industry of employment, full-time/part-time working, gender etc.

A different critique of the data might be that the sample from which the employees were being drawn – in this case, the YouGov panel – was somehow unrepresentative of the population in ways that cannot be corrected for by weighting. This critique can potentially apply to any survey, no matter how big or small, and it is hard to prove it might not be a problem. The YouGov panel is widely used for surveys on all types of issue, including by critics of zero-hours contracts, such as these recent statistics on bullying at work published by the TUC. In addition, the CIPD are able to compare their employee data with the ONS Labour Force Survey findings for April-June 2015, which show similar results. For example, the mean hours usually worked by zero-hours contract employees were 25.1 hours a week in the LFS and 23.9 hours in our employee survey.

The CIPD do not have data from the LFS on job satisfaction or perceived work-life balance, which is precisely why these questions were included in their survey. However, the LFS does provide data which suggests that many zero-hours employees may be reasonably satisfied with their working arrangements, in the sense of not wanting to change them – 36% want additional hours and 22% want a new job, but 59% want neither a new job nor additional hours.
The CIPD views are that, on average, zero-hours contract employees report similar levels of job satisfaction, personal well-being and work-life balance to the population of employees as a whole suggests there are positive as well as negative aspects to zero-hours contract work. A potential positive is that zero-hours contract employees are less likely than employees as whole to say their workload is excessive and, as a result, less likely to say they are put under excessive pressure on a regular basis (which is bad for job satisfaction and for physical and mental health). Potential negatives are reduced perceptions of being involved in the workplace and having opportunities to learn and grow.
When looking at this data, you have to remember that the majority of zero-hours contract jobs tend to be concentrated in low skill, low paid parts of the economy. The difference in hourly earnings between zero-hours contract employees and employees as a whole present in the LFS data probably reflects this concentration because, when the CIPD asked employers using zero-hours contracts, 79% said they paid zero-hours contract workers the same (or a higher) hourly wage rate as other workers doing the same job – just 9% said they paid a lower rate. This – and the concentration of zero-hours contracts in part-time employment – may also help to explain the difference in perception of opportunities to learn and grow.

The data also show that part-time employees who want to work additional hours report, on average, significantly lower job satisfaction, personal well-being and work-life balance than part-time employees who are satisfied with their hours. Clearly, underemployment has negative effects on well-being. However, the data suggests this is a general problem affecting all forms of part-time work regardless of contract type and not one restricted to, or particularly acute for, zero-hours contract employees.

This last finding is a reminder that issues such as insecurity, low pay and lack of progression transcend contractual type. Employees with open-ended contracts are often just as likely to be affected as employees with “non-standard” working arrangements. Excessive concentration of fire on zero-hours contracts could divert attention away from a broader need to deliver fair and flexible employment practices that benefit all types of workers.

Clearly based on this data and information puts another perspective on the ever challenging issues over zero hour contracts

Posted: Sun 09 Dec 2018
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