Growth of zero-hours contracts during recovery shows they are more than just a recession-related phenomenon

The increased use of zero-hours contracts (ZHCs) last year – even as the labour market recovered – suggests they are more than just a recession-related phenomenon and are likely to remain an ongoing feature of the labour market, the Resolution Foundation said today (Wednesday) in response to new figures published by the ONS.

The ONS today published updates of two surveys on the use of ZHCs. One – the Labour Force Survey – is based on responses from employees, and shows the number of workers who reported being on a ZHC increased by almost a fifth (19 per cent) to 697,000 during 2014.

The second survey – focusing on employers – shows 1.8 million contracts provided no guaranteed hours and had offered some work in the previous fortnight in August 2014. This is an increase of 400,000 on the figure recorded in February 2014, though the ONS notes that seasonal factors may be at play. The discrepancy from the employee survey is likely to reflect the fact that many individuals have multiple ZHCs, though there may also be differences in the extent to which employees and employers recognise ZHC status.

The stark differences between the headlines in the two surveys show that there is no definitive figure on the number of workers on ZHCs across the UK. However, both surveys show an increase in their use during last year. This is particularly striking as across the same period as in the employee survey, unemployment fell from 7.4 per cent to 5.8 per cent, while other forms of atypical employment that have grown during the recession – such as self-employment and involuntary temporary work – started to fall as the jobs recovery strengthened.

Echoing previous Resolution Foundation analysis, the ONS found that while the majority of zero-hours contract workers are content with the amount of work they have, a large minority of one in three (34 per cent) of those on ZHCs want more hours compared with 13 per cent of those in other forms of employment.

A 2013 CIPD survey of employers found that close to half (45 per cent) said ZHCs were part of their long-term workforce strategy, compared to just 15 per cent who said their use was just a short-term measure.

Conor D’Arcy, Policy Analyst at the Resolution Foundation, said:

“Zero-hours contracts are a potent symbol of the recent downturn. They signal both the flexibility that has helped keep unemployment down but also the deep insecurity that has blighted many jobs.

“The continued growth of zero-hours contracts during the recovery suggests that they are more than just a recession-related phenomenon. While many employers may have started to use zero-hours contracts during the downturn, it looks like most are sticking with them. Growing awareness of zero-hours contracts among survey respondents may explain part of the increase but the longer these figures continue rising, the stronger the argument looks that they are here to stay.

“While many workers don’t mind being on a zero hours contract, further policy action is needed to prevent them from becoming the standard form of employment in some low-paid sectors, such as social care.”

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Rob Holdsworth (Director of Communications) on 020 3372 2959 or 07921 236 972

Natalie Cox (Communications Officer) on 020 3372 2955 or 07983 550 337