· News

Three quarters of employers used flexible contracts in 2023

One in eight employees (13%) in the UK are on flexible contracts, according to the Office for National Statistics

Three quarters (75%) of employers used some form of flexible contract at some point in 2023, and half (48%) of those employers planned to increase use of flexible contracts over the next five years, a report from thinktank the Resolution Foundation has found.

The report also found that 32% of employers who use flexible contracts employ staff who prefer those contracts to other working arrangements.

The report, published yesterday (25 April), defined flexible contracts as variable-hours and zero-hours contracts or temporary work such as casual, seasonal or short-term employment.

Novo Constare, CEO and co-founder of temporary jobs platform Indeed Flex, explained that the findings signalled an increased demand for flexibility from workers and employers.

He told HR magazine: “This data captures two seismic shifts in recruitment: just how important flexible working has become to many workers, and employers’ growing willingness to accommodate them.

“Temporary workers offer ultimate flexibility to employers, and many temps see temping as the ultimate in flexibility, as it allows them to work when and where they want.

“As flexible working takes root, it’s also evolving to mean more than just working from home.

“Employers and workers are taking an increasingly mature approach, redefining flexibility to include workers’ freedom to choose their schedule, employer, hours, shift patterns, location and pay rate.”

Read more: Uptick in temporary hires suggests "cautious optimism"

The Resolution Foundation found that 25% of employers reported that flexible contracts allowed them to reduce their wage bill. A lower proportion (13%) of employers indicated that flexible contracts enabled them to lower their responsibilities relating to auto-enrolment and employer national insurance contributions. 

However, 37% of employers would consider reducing their use of flexible contracts if staff no longer wanted to be employed on them, according to the research findings.

Amanda Glover, associate at law firm Clarkslegal, explained that some workers voluntarily opt for flexible contracts while others are given no choice.

Speaking to HR magazine, she said: “On the one hand we have situations where flexible contracts are being accepted by those that absolutely want this type of work – because it fits perfectly at their time of life or into their lifestyle. 

“On the other hand, we have others reluctantly accepting flexible contracts because they have no choice but to accept this type of work. 

“They are stuck in these arrangements because they cannot find a better alternative or because they have individual circumstances which do not allow for anything other than this type of work.”

Glover added that those who are stuck in flexible arrangements can be without workers’ rights.

She continued: “These individuals often fall under the bracket of 'worker' or 'self-employed' too, given the nature of the working relationship with the company, which means that they have lesser employment rights than employees, on top of unpredictable incomes and the extreme financial turbulence that this brings – a double whammy.”

Research from November 2023 found that 61% of workers were unaware of the rights of people on zero-hours contracts.

Acas advisor Gary Wedderburn told HR magazine that those on zero-hours contracts are eligible for workers’ rights.

He explained: “People employed on zero-hours contracts can be legally classed as a worker or an employee and so are entitled to rights on the same basis as other workers and employees, depending on their employment status. For example, they are entitled to the national living wage, national minimum wage, holiday pay and rest breaks.

Wedderburn noted that employers should not limit the work that people on zero-hours contracts are allowed to do for other employers.

He commented: “Zero-hours workers also have other protections if they want to work for more than one employer. An employer must not try to stop a zero-hours worker from working for another employer by putting an exclusivity clause in the contract, or treat them unfavourably for working for more than one employer.”

Read more: Workers unaware of zero-hours contracts rights

Of the employers that already using flexible contracts, nearly half (48%) indicated that they planned to increase the share of the workforce on variable-hours contracts over the next five years.

Nearly two thirds (63%) of employers claimed that they would change their behaviour if legislation gave workers the right to a fixed-hours contract or two weeks’ notice of their shifts, and 48% would reconsider reducing their use of flexible contracts if the economic outlook became less uncertain. 

The Workers (Predictable Terms and Conditions) Act is set to come into effect in autumn 2024. That law means that if a worker's existing working pattern lacks predictability in terms of the hours they work, the times they work or the length of their contract, they will be able to make a formal request to change their working pattern, to make that pattern more predictable.

The Resolution Foundation analysed data by Savanta, which surveyed 891 senior decision-makers across the public and private sectors.