The zero-hour contract is a term that we are all familiar with; but do we really know exactly what it is and the pros and the cons that currently surround one of the security industries most debated topics? writes Graeme Hughes, Managing Director of Innovise Software.
Zero-hour contracts traditionally tend to rise in their popularity when the economy is unstable. Although there is no specific legal definition of a ‘zero-hours contract’, the term is generally used to mean an arrangement under which the employer does not guarantee to provide work, and only pays the worker for hours actually worked. The worker usually does not have to accept any work offered to him or her, but must carry out the work personally if they do.
They deliver a cost effective way for employers to deal with fluctuating and uncertain business needs. The zero-hour contract allows an employer to appoint staff on an ‘as and when’ basis sometimes with sick pay and sometimes without, but almost always with annual leave. Other common attributes are that they are regularly subject to criticism due to the contract’s predisposition towards the variable needs of the employer, the zero-hours contract is often seen as a tool crafted to please Peter, often at the expense of our employee, Paul, but is that fair?
Some employers and employees alike argue the benefits to employee are equally powerful; flexibility over their own work schedules, choice of working conditions allowing employees to decide who the most appetising employer or piece of work or task being offered is. In reality, many zero hours contract negate this choice tying down exclusivity to the employer and offering little by way of choice other than ‘take it or leave it’.
Innovise work with many of the leading management teams in most of the UK’s leading security service providers and offer them foresight into future busy periods, enable them to proactively recruit, plan-shifts and notify staff of work patterns accordingly. Innovise Software are aware, more than most, on the ups and the downs of the zero-hour contract for both employers and employees alike, and more specifically, how the delivery of the business in terms of workforce management can be effectively handled retaining the virtues of the contracts and reducing the risks that will come with the proposed changes.
I feel that although the zero-hour contract serves a positive purpose within the industry – an industry that is defined through the many short-term and casual employment contracts – caution must be applied to prevent damage to the employer-employee relationship: the success of any service provider is based on the effectiveness and quality of their service delivery. Unfortunately I don’t think that the deeper implications of the zero-hour contract are always as carefully considered as they should be when the industry adopts it within their operations. You need a percentage of employees on this basis, not an entire workforce and you need to be able to track it and its consequences, positive or negative so you can make better decisions.
There are other considerations. On the surface, the zero-hour contract is the perfect solution to a service provider who may need additional help as a contract progresses. However, what often goes unconsidered is the affect that a random pattern of work, characterised by last-minute notification of hours, will have on the attitude of the staff. Would a member of staff who has been notified of a two hour shift, just an hour before they are due to start, after potentially days of waiting for work, have the same approach to the job as an employee who has the security of a set shift pattern? How will the lack of commitment from an employer towards its employees change the attitude of the workforce …and most importantly, how will this attitude manifest itself in the service delivery that a security company is providing? Given this is your face to your client much of the time, how well is your brand, the values or your service being represented?
The lack of certainty associated with a zero-hour contract affects both the employer and the employee in different, yet potentially and mutually negative ways and these must be managed so they don’t do damage. Just as a worker lacks certainty of work whilst under a zero-hour contract, the employer lacks the certainty that the worker will do the work. This lack of mutual obligation inevitably leads to workers feeling a lack of loyalty to the company which could have detrimental effects on the business.
Zero-hour contracts have gained an ugly reputation, especially recently with political commentary as it is, because the contract says that instead of working a specific number of hours per week, workers must be ready to work whenever they are asked. However, in some organisations, there is no need for employees to sit at home and wait for a call as they are given the opportunity to remotely access a rota and sign up for as many hours as they want or are allowed. Once on the rota, the hours are usually very secure. Some welcome this way of working, siting that it give employees flexibility over their own work schedules, as well as benefiting employers.
Unfortunately for service providing organisations that are not up to speed on their workforce management technology, this is sadly not an option, giving strength to the opposing argument that rallies the notion that the flexibility that the zero hours lottery provides, sacrifices staff loyalty and the employment relationship damage in the long-term. We see this as a growing problem that need not exist.
The unpredictable nature of the zero-hour contract is also a common criticism – an employer can, if they wish, arrange shifts on short notice, thereby making it extremely difficult for the worker to make alternative plans. The problem does not stop once in the workplace – many employees will commute long distances, only to be sent home after an hour or two having incurred a financial loss. This is not sustainable.
Nevertheless, in many cases, no matter how short the notice or impractical the hours, a worker will agree to work for fear that their refusal will mean that they are offered less hours in future because the employer has a ‘pool’ of other workers to choose from.
Zero-hour contracts continue to be on the rise in the security sector despite its use being significantly higher than the national average level of adoption relative to other industry sectors. In the period October – December 2013, the Office of National Statistics (ONS) said that 583,000 people had reported as being on a zero-hour contract. This is two per cent of the UK workforce. This is more than double when compared to the same window of reference in 2012.
I believe that if end clients who outsource their guarding and wider support services contracts were to offer longer term engagement, providing security of contract for the sector, zero-hour contracts would be less prevalent. They don’t because the industry is full of poor delivery owing to poor management, which drives down buyer confidence.
The focus on better service delivery through better work force management will in turn provide confidence to end clients. A rise in confidence will lead the way for the opportunity to negotiate contracts, driving certainty of tenure which will ultimately reduce the demand for zero-hour contracts. Surely, this is better for everyone? This needs to start in the public sector and buying habits of these organisations and that will set trends throughout.
Offering an array of positive and negative elements, it is clear that the unexpected effect of the zero-hour contract is the potential for silent damage. Tangibly ticking all of the boxes with regards the opportunity to work and give work, we have to ask the question: is enough being done to level the playing field for employees, their support services industry employers and, their end clients who drive the pressure for zero-hour contracts in to the operations through their specification of the outsourcing requirements? Whatever the answer, we can be sure that the debate around zero-hour contracts will continue to rumble on in 2014 and probably beyond.
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