Job insecurity

Job insecurity The growing insecurity of jobs will damage the well-being of workers the world over Faced with continued globalisation and rapid technological innovation, businesses are under intense pressure to improve their ability to adapt It is widely believed that this pressure will force many companies to pursue more variable staffing costs by making greater use of temporary or freelance workers This threatens the job security that employees in the developed world have come to expect According to Charles Seaford, head of well-being at the New Economics Foundation, this poses a grave threat to the well-being of workers everywhere, especially the young And, as he explains in this interview with The Economist Intelligence Unit (EIU), it is a concern for all businesses, as employee well-being correlates with productivity Employers should therefore bear in mind the psychological costs of their policies when setting employment strategy, he advises This interview is part of an investigation into the future of work by The Economist intelligence Unit, sponsored by Ricoh Europe For more, visit http://bit.ly/eiufuturework Charles Seaford New Economics Foundation The EIU: What will be the biggest trend shaping the way we work in the next 10-15 years? Charles Seaford: From a health and well-being perspective, the big trend will be job insecurity Why is job insecurity a problem, and for whom? Job insecurity is a major problem in the developed world Ask people in Europe, for example, whether they feel secure in their work, and 13% of them will say they are “likely” or “very likely” to lose their job within a year That particular number is from the EU’s Third European Quality of Life Survey 2012, but it’s a trend we see confirmed in our own recent research Our latest qualitative studies suggest that job security is a top priority among the workforce They also underline the fact that security of income is crucial for an individual’s sense of positive well-being Conversely, the effects of a lack of security are profoundly negative Is it just an issue for Europe? International research across the OECD shows that employees everywhere rate job security highly In fact, a 2009 study [by Andrew E Clark, Work, Jobs and Well-being across the Millennium] showed that between at least 1989 and 2005 it was consistently their number one concern At the end of that period – before the financial crisis hit – 53% of men and 58% of women said job security was “very important” to them They ranked it as more important than how much they were paid, S P O N S O R E D B Y: whether their work was interesting, whether they could work flexible hours, or whether there were good opportunities for advancement So the growth in job insecurity is hitting employees where it hurts most Are workers’ fears about the security of their jobs justified? There is evidence that perceptions of job insecurity are greater than the reality for some people Data also suggest that the average length of time people stay in a job has not declined as fast as people think But the problem with averages is that they mask variations Some segments of the workforce can suffer quite sharp falls in insecurity, which is masked by average trends The percentage of people in temporary or zero-hours contracts has certainly increased So the perception of insecurity is probably greater than it is in reality, but the trend is real nonetheless Will job security improve as the economy recovers? Given the trend of much labour-market policy towards greater “flexibility” and the increasing global competition in traded goods, the damage caused by job insecurity is only likely to increase For employers, it’s a well-established fact that a healthy sense of well-being at work leads to greater productivity They should keep this in mind A flexible “hire and fire” policy might have some benefits for companies, but they should factor in all the costs Workers ranked job security as more important than how much they were paid, whether their work was interesting, whether they could work flexible hours, or whether there were good opportunities for advancement Charles Seaford New Economics Foundation An insecure job might be worrying, but surely it is preferable to unemployment? Unemployment is very damaging But the emerging – and concerning – trend is job insecurity Its effects are not so well researched, or so well understood But insecurity is clearly a major driver of low well-being If you look at the boost to an individual’s sense of well-being when they get a job after a period of unemployment, that feeling is cut in half if the job they get is on a contract of less than 12 months What’s more, if you take the long-term unemployed out of the equation, people who go from feeling very safe in their job to feeling that they might very likely lose their job suffer the same drop in well-being as those who have actually lost their job Which parts of the workforce are most vulnerable? Those who suffer most will be the young and the relatively unskilled In Europe, we can already see an emerging “insider and outsider” problem There are young people on the “outside” – they move from one insecure job to another Then there are those on the “inside” – they are older, have been in stable employment for years and have jobs that are relatively safe But over the long term, I think all members of the workforce will suffer equally What can be done to tackle this trend? Governments could look at introducing “flexicurity” measures By that I mean balancing the flexibility of labour markets with much stronger social security They could also create labour market and adult training policies that are active and supportive, rather than passive and penal – policies that are focused on getting people back into work An active industrial policy would generate stable jobs combined with a much more active management of the skills system, so that the supply of skills matches the demand Governments could also create restrictions on zero-hours contracts and apply extreme care when liberalising employment protection, to ensure that it is net beneficial to well-being It could take years for some of these changes to take effect, but governments could start now In the meantime, employees could join trade unions and actively campaign for skills training – preferably transferable skills training S P O N S O R E D B Y: ... So the growth in job insecurity is hitting employees where it hurts most Are workers’ fears about the security of their jobs justified? There is evidence that perceptions of job insecurity are... Foundation An insecure job might be worrying, but surely it is preferable to unemployment? Unemployment is very damaging But the emerging – and concerning – trend is job insecurity Its effects... contracts has certainly increased So the perception of insecurity is probably greater than it is in reality, but the trend is real nonetheless Will job security improve as the economy recovers? Given