Zero hours contract reforms risk raising costs and cutting youth jobs, CIPD warns

The CIPD has warned that complex new rights for people on zero and short hours contracts risk raising employment costs and will push employers towards greater use of temporary and self-employed staff. The warning comes in our response to the UK Government's consultation on the reforms, which closes today. 

We're calling for tripartite talks between government, employer bodies and trade unions to agree changes that make the rules workable in practice. Without this, the reforms will undermine workforce flexibility and employment opportunities, particularly for students and other workers unable to commit to regular hours due to their personal circumstances. 

What our data shows 

Our survey of employers who use zero hours contracts found: 

• Two-thirds (65%) expect their HR and management costs to rise because of the reforms 
• A third (31%) expect to make redundancies 
• A third (33%) expect to rely more on self-employed contractors, temporary staff or casual workers instead 

Young people stand to lose out most 

Nearly half a million (479,000) young people aged 16 to 24 are currently on zero hours contracts. That includes 250,000 students who use them to balance study and work. 

CIPD research show that most people on zero hours contracts are classed by their employer as ‘employees’, not ‘workers’, and their job satisfaction is comparable to people working regular hours in similar roles. Nine in ten (89%) say their contract suits them well. Only 18% want more hours in their current job, and just 7% want a different job with longer hours. 

The government's aim is to end what it calls "one-sided flexibility" and give people on zero hours and short hours the right to move to more predictable hours. That's a fair goal, but our evidence shows the current proposals will fail to achieve this and will disadvantage employers, while undermining the provision of flexible jobs for those that need them. 

What we're asking government to change 

Our response is based on focus groups and interviews with HR practitioners, a large-scale employer survey, and analysis of UK and international labour market data. We're asking government to: 

• Change the reference period for measuring hours worked from 12 weeks to 52 weeks 
• Set the hours threshold for guaranteed hours rights at the lowest option on the table: 8 hours 
• Give employers more flexibility on giving advance notice of work schedules, so they aren't penalised when staff volunteer for shifts at short notice 

What this means for employers 

These changes aren't in force yet. They're part of the Employment Rights Act 2025, and the government expects them to take effect in 2027, though no exact date has been confirmed. 

That gives employers time to prepare, but not a reason to wait. HR teams should look now at where they use zero hours or low hours contracts, and work through what a guaranteed hours offer would mean for rotas, costs and workforce plans. We'll keep pressing government for a workable outcome, and we'll update our guidance as the detail becomes clearer.