‘Zero-Hours’ Contracts – What’s All The Fuss About?

ZeroAccording to ACAS There’s been a sharp increase in recent years in so-called ‘zero-hours’ contracts, as employers try to find cost-effective ways of meeting short-term staffing needs, particularly in the retail and hospitality industry. But, as ACAS advises, they need careful management.

This rise has led to the fact-finding mission that the Department for Business, Innovation and Skills (BIS) has begun into the benefits and disadvantages for both employees and employers of zero-hour contracts and covered in a recent article in Payroll World .

In the article Vince Cable says he is concerned about how little we know of the effect zero hour contracts have on employees and employers in the workplace and believes some employers may abuse this type of contract, using them to take on cheap, disposable labour and not treating them fairly, which is why he has ordered the report.

I first saw ‘zero-hours’ contracts some 15 years or more ago and have yet to see evidence that they are really a way forward for most employers. They are more often seen in retailers in the United States and generally fairly alien to the Europe workforce. There are many very successful retailers across Europe running without using many, if any, zero hour contracts and I am not convinced they are a prerequisite to running an efficient business.

Where employers have a good balanced workforce with a mix of full-time/part-time and flexible contracted employees and a fit-for-purpose workforce management system – there should be no problem meeting customer demand in most industries.

Although this kind of contract offers extreme flexibility for employers and in some instances can be a very useful, cheap alternative to using agency staff, where ‘zero-hours’ contracts are widespread, employee engagement will inevitably suffer and that negatively impacts both productivity and  customer service.

Ultimately, many employers need  a flexible workforce to accommodate the required levels of service delivery or production requirement and there are many alternatives that should be considered other than ‘zero-hours’ contracts. There are many people in the workforce that would relish flexible contracts; working parents and people furthering their education, for example. All of those add to a flexible balanced workforce, and in some cases ‘zero hours’ may be needed but I am yet to be convinced. In any case, anywhere that a workforce needs to be flexible – the best way to manage it effectively and fairly is still with an automated workforce management solution.

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