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Zero-hours contracts and the rise of the disengaged workforce

Simon Kenwright , 08 May 2013

Employment contract

In April 2013, results from the Workplace Employment Relations Study highlighted a dramatic rise in zero-hours contracts for UK workers.

The contracts, initially popularised in the part-time and student workforce, have risen 11% since 2004 with a growing number of large charities and public sector organisations opting for the structure, arguing they provide flexibility for those juggling family commitments.

Zero-hours contracts by definition do not guarantee an employee a fixed number of working hours per week. As such, available work is often dictated by business performance, which can mean that for smaller companies whose quiet periods can often extend over a number of weeks, workers can be faced with nearly a month without income.

The retail sector is a primary purveyor of this ad-hoc structure, with even big-name brands like Abercrombie and Fitch and Hollister hiring large swathes of employees under un-fixed contracts, suitable for the undergraduate hoping to earn a little spending money but having a crippling effect on those dependent on the wage.

Brand engagement firm Maverick commissioned an independent survey in March 2013, into worker engagement levels across all sectors in the UK. Of those questioned, retail employees were some of the most disconnected in the country with 77% admitting to 'not engaging' with their company's brand values.

Employees of any kind, at any level, should be actively 'selling' their companies and its associated values to people in every conversation they have; with investors, customers, suppliers and even when talking about their jobs with friends. The research found, not only were the majority of UK workers unlikely to do this, many didn't even know what the values were in the first place.

We all know it's easy for people to get bogged down in day-to-day tasks and forget the basics, but as the research found the fundamental lack of grassroots training is reaching worrying levels. The report highlighted that a further 63% of workers in the retail sector confessed to never being trained on the importance of their company's values. This may not be such a problem for part-time workers but as we have seen, increasingly these no-fixed-term arrangements are appearing for roles which demand a higher degree of knowledge including those in law enforcement and the NHS. For these employees, a precarious work structure offers them little encouragement to go beyond the call of duty, something desperately needed in front-line public sector roles.

The findings mirror the issues under close scrutiny by the wider UK business community, following the launch of the Engage for Success taskforce. In its research, the initiative revealed, by investing just 10% more in staff engagement, UK businesses in all sectors could add £2,700 per employee per year in profits. This could result in a staggering £49 billion growth across UK plc, equivalent to 3% of the country's GDP.

Add to that the fact a quarter of employees working for companies who regularly advertise weren't aware of their firms' promotional messages, or what they were expected to do to support marketing campaigns at the point of sale, and it's not difficult to see why the Budget's failure to freeze the sharp rise on business rates has brought little comfort to UK retailers.

We cannot expect a magic formula to make engagement happen. It's a long journey that in most cases starts at the top of the organisation and slowly filters down throughout the business. It's worth remembering, beyond brand values and visions, what employees seek – indeed, what we all seek in our work life – is a blend of tangible and intangible elements that together create an environment of trust, stimulation, contribution, recognition, development, learning and support (monetary and otherwise), attributes which short-sighted zero-hour contracts are unlikely to inculcate.

Only organisations that understand and work towards these fundamentals are likely to enjoy sustained success.

Simon Kenwright is director of engagement at brand engagement firm Maverick

 

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Where was the negotiation?

oblomovIII 08 May 2013

With a guaranteed no of hours, both employees and employers knew where they stood. Logically, in place of this stability, there ought to have been a trade-off - ie, ok, you get increased flexibility as an employer, but what did the employee get? These aren't jobs offering a wage premium, so the employee gets nowt. For anyone with a home/family/bills that's not a good trade-off. Desperate people will do it, for a bit, - but the best workers long term aren't desperate people.

The right target?

Peter Brown 08 May 2013

An interesting article but I'm not wholly convinced zero hours contracts are getting a fair rap here. The link between engagement and these types of contract looks to be by association rather than evidence of direct cause and effect. You could equally point the finger for low engagement at the generally low level of pay in the sector. Sure, zero hours contracts can be abused by employers inclined to do so - I just don't see them as intrinsically a bad thing and indeed they can work well for both parties if used sensibly.

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