Zero-hours contracts allow employers to hire staff with no guarantee of work. Darion Naylor explains the reasons to support or oppose these contracts.
What are zero hours contracts and when are they used?
A zero hours contract is a contract which allows employers to hire staff with no guarantee of work. This means that employees will only work when they are required to by the employer, so they will not have set or regular hours.
There are various advantages and disadvantages of zero hours contracts to the employer and the employee.
Zero hours contracts are often used as they can provide a workforce that can adapt to any changes in the circumstances of the employer.
For example, such contracts may make it easier for an employer to cover an employee who has had to leave work urgently. They could also be used to cover large events requiring a larger workforce than normal.
Possible positive effects for the employer of zero hours contracts
A key benefit of zero hours contracts is that they allow businesses to cater to demand in a cost efficient way. This is especially useful in an industry such as hospitality, where demand for the service is likely to change regularly throughout the year.
A business will be able to save by not only avoiding paying an annual salary to members of staff, but also by removing other costs such as sick pay, which is often not included in the contracts.
Possible negative effects for the employer of zero hours contracts
Although the zero hours contracts are potentially cost effective, they may be detrimental in terms of the quality and motivation of employees. As employees will not be working for the business on a permanent basis, they may not receive the regular training that a permanent member of staff might.
It could be suggested that it’s harder to motivate employees working on zero hours contracts. This could be due to the probability that there will not be the same structure for progression as there would be within a full-time position.
Possible positive effects for the employee of zero hours contracts
Some employers have said that a lot of employees appreciate the flexibility they receive by working zero hours contracts. They can also be beneficial with regards to avoiding gaps on your CV.
For example if a graduate knows he or she is starting a grad scheme in September, a zero hours contract may be a useful way to avoid a gap in the CV and earn some extra money.
Possible negative effects for the employee of zero hours contracts
Employees working on a zero hours contract may suffer due to not being given enough hours. In turn, a lack of financial stability could be a concern.
Another possible negative is that most zero hours contracts will not provide sick pay. It has been suggested that this allows employers to avoid responsibility and potential benefits of full-time roles such as pension schemes.
There are reasons to support and reasons to oppose zero hours contracts to all involved. Employees can enjoy extra flexibility but don’t receive the stability that a full-time role provides. Equally the contracts can be beneficial to employers by allowing them to cater to demand in a cost effective manner.
However employees on a zero hours contract could potentially be less reliable as there is normally no obligation for employees to accept the work they are offered. Whether or not zero hours contracts will be beneficial or detrimental is entirely dependent upon individual situations.
Grovelands offers many permanent, contract and temporary roles for professionals of all levels; have a look at our current vacancies.
– Darion Naylor