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The rise of zero-hour contracts.. pros as well as cons

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The Resolution Foundation has published a report on zero-hours contracts, in partnership Warwick Business School Professor of Human Resource Management Kim Hoque comments.

Professor Kim Hoque said: “The growth of such contracts is perhaps testimony to the extent to which employers have focused more in recent times on squeezing the wage bill rather than responding to attempts to encourage them to seek greater employee engagement. “In terms of the broader macro-economic effects of zero-hours contracts, the flexibility they provide may well have enabled the UK to avoid higher levels of unemployment during the economic downturn.” Prof. Hoque is a member of the Investors in People Advisory Board and has consulted for the Chartered Institute of Personnel and Development.

They may also have enabled some people to maintain an attachment to the labour market who would otherwise not have been able to do so. That said, such contracts could also be seen as part of the wider underemployment problem that has inflicted the UK economy in recent times, with large numbers of workers on part-time or casual contracts wanting to work more hours but being unable to do so. Hence, while unemployment has remained lower than many economists predicted would be the case, underemployment has been high and zero-hours contracts may be a significant part of this picture. Beyond this, another broader macro-economic argument is that zero-hours contracts could represent a drag on consumer spending and hence economic recovery. People on insecure zero-hours contracts are less likely to have the confidence to spend than are people with more stable incomes.

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