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Will flexible contracts be the new ‘normal’ for young workers?

Employers’ views on flexible employment contracts for younger workers

Young woman signing contracts and handshake with a manager

Source: djiledesign

Over the past decades, many European countries have witnessed a decline in ‘standard’ employment and a rapid rise in employment relationships that entail a lower degree of commitment from both employers and employees. Younger workers are overrepresented among those working in non-standard arrangements based on deregulated, ‘flexible’ contracts, meaning that they do not have permanent, open-ended employment relationships with the organisation within which they perform their daily work. As a consequence, an increasingly large share of young adults in the labour market is exposed to higher individual risks of various types. Although employers’ decisions regarding contracts determine the level of exposure to insecurity among younger workers, not much is known about how employers experience using flexible employment contracts in practice.

In a new study Lin Rouvroye, Hendrik P. van Dalen, Kène Henkens (Netherlands Interdisciplinary Demographic Institute (NIDI)-KNAW/University of Groningen) and Joop J. Schippers (Utrecht University) identify which considerations, both positive and negative, underlie employers’ decision-making with regards to the use of flexible contracts for younger workers. The article also discusses how employers perceive the future implications of an increasingly flexible labour market. Findings are based on in-depth semi-structured interviews with 26 managers, Human Resource professionals and directors working at thirteen organizations in both the public and the private sector in the Netherlands.

The authors find that employers highly value the use of flexible contracts and easily produce economic arguments in its favour, focusing on the ability to cover financial risks, to make better hiring decisions and to more easily monitor and control workers’ performance. Besides this, the analysis also showed voices of dissent. Employers noted that the use of flexible contracts causes structural problems. Within their organization, it complicates retention, continuity in available firm-specific human capital and social morale on the work floor and employee well-being. Nevertheless, the interviewed employers predominantly perceived the increased use of flexible contracts as a new reality and provided few reflections on how to reduce its downsides for their organisation or for society as a whole. When asked about their role and responsibility in the upward trend in flexible employment, employers did acknowledge the burden that having a flexible contract puts on younger workers with regards to establishing financial stability and planning for the future. However, they pointed to other actors or institutions, such as the government, as primarily responsible for determining the limits of flexible employment and monitoring these risks.

In light of the rapid rise in ‘non-standard’ employment relations across European countries, EU policymakers have urged employers to reflect upon the implications of this development in terms of the working conditions for employees and their own role in shaping them. According to the European Parliament and Council, employers are expected to promote the transition to ‘more secure forms of employment’ and ‘to offer full-time or open-ended employment contracts to workers in nonstandard forms of employment’. The results of this study provide little evidence that suggests employers are actively engaging with this policy directive. The findings indicate that policymakers should not expect a priori that employers will perform the role of custodians of the youngest generation of workers entering an increasingly flexible labour market.

Author(s) of the original publication
Lin Rouvroye