The number of UK employees on zero-hours contracts, where staff only work when required and are employed with no guaranteed hours of work, has risen by nearly a fifth (19%) over the past 12 months.
According to new figures by the Office of National Statistics, 744,000 people between April and June 2015, were employed on zero-hours contracts. Although this represents just 2% of the UK workforce the figure has increased by 120,000 from 624,000 on the same period last year.
Research shows people on zero-hours contracts are more likely to be women, students in full-time education, young people looking for a pathway to employment or older workers approaching retirement.
On average, someone on a zero-hours contract usually works 25 hours a week.
Increased workforce satisfaction
With 40% of people on a zero-hours contract wanting more hours in their current job rather than finding another, this demonstrates that people are generally happy with their current employers and that employers are abiding by the law.
Indeed, this was reflected in a 2013 study conducted by the CIPD which found that 47% of workers on zero-hours contracts were “very satisfied” or at least “satisfied” with their deal as it provided them with greater choice over the hours they worked.
Director-General at the CBI John Cridland said the figures illustrate that zero hours contracts are most common among groups where flexibility benefits both the employer and employee, in particular parents and older workers or young people taking their first steps in the labour market.
He said the majority of employers used zero-hours correctly to avoid paying fixed overheads but urged a clampdown on bad practice, where employers turn to zero-hours simply to avoid giving employees their rights such as minimum notice periods, Shared Parental Leave and pay, flexible working rights and redundancy awards.
So, what industries can benefit from employing zero-hours workers?
Zero-hours contracts have a bit of a bad reputation. But they are a welcome solution in industries that typically employ ‘casual workers’, such as hospitality, retail, call centres as they provide employers with immediate access to a pool of staff they can call on at any time when demand dictates.
The ability to use staff on an ‘as and when’ basis means they can accommodate demand cost-effectively without the need to keep recruiting and retraining a new team.
Research has also shown a dramatic increase in manufacturing and distribution who are turning to zero-hours workers to meet deadlines and fill skills gaps.
How can zero hours contracts be made to work better for employers?
The key to making effective use of zero-hours workers is identifying the precise moment when to upscale your workforce.
Workforce management technology provides the tools managers need to build, manage and consistently maintain their workforce to their needs.
Analysing past performance and workloads allows managers to forecast what’s going to happen in the future from which they can proactively recruit and plan staff shifts to create the most efficient and productive workforce possible.
The hospitality sector is the perfect example of how utilising workforce management tools can help to optimise the use of zero-hours staff to navigate the hectic Christmas period. Having sufficient staff at peak periods is essential. Too few staff can damage customer service, whilst overstaffing can lead to greater costs and result in staff being paid for nothing which hit the bottom line.
By evaluating historical attendance data and drawing down actual sales figures from the same period, managers can determine the precise number of casual workers needed and the likely time and skills required to cope with the forthcoming festive season.
Identifying staffing requirements at the earliest opportunity allows managers to create accurate staff rosters where candidate skills, qualifications, experience and availability for work are matched to the available roles, ensuring the right person is deployed to the right role.
Here to stay
Whether you think zero-hour contracts are good or bad, the latest research shows that there is a definite place zero-hours contracts and they are here to stay.
For employers where business demand is unpredictable, the flexibility and responsiveness that zero-hours provide should be welcomed and embraced.
Effective use of zero-hours contracts represents an opportunity to create a more agile workforce for your short-term and long-term needs and sustain high levels of service without the cost and commitment associated with full-time contracts.
But reaping the benefits is only possible by planning ahead. And that’s where workforce management comes to the fore.