Analysis | How proposed reforms can manage the pros and cons of zero-hours contracts

Reviewing employee sentiment on zero-hours contracts

Zero-hours contract jobs don’t have a good reputation, with the majority of the UK public supporting calls for them to be banned outright. However, CIPD’s research has consistently found that these types of contracts may not be inherently bad, with some employees valuing the flexibility they provide above their downsides.   

The measures in the Employment Rights Bill will give workers on zero hours contracts a right to move to a guaranteed hours contract which reflect the hours they regularly work. Zero hours contract workers will also have a right to reasonable notice of changes to shifts or working hours compensation if shifts are cancelled without reasonable notice.  

The bill’s passage through parliament will no doubt prompt further debate about the advantages and disadvantages of these types of contracts. To inform this, CIPD has conducted new analysis of our Good Work Index survey data (2022-24). In particular we chose to compare zero-hours contract jobs with jobs of similar quality and allow for the age breakdown of zero-hours contracts employees and other employees. 

How do zero-hours roles differ from other jobs? 

Zero-hours contracts jobs are slightly different from other jobs, even when adjusted for age of employee and quality of job (see Figure 1 below). 

Figure 1: Characteristics of zero-hours jobs relative to other jobs
(UK, excluding self-employed, owner/proprietors and partners in a business)

*Agree/strongly agree that “I find it difficult to fulfil my commitments outside of work because of the amount of time I spend on my job”.
SOURCE: GWI surveys 2022-2024. 

Zero-hours contract jobs were about 11 percentage points more likely to involve regular work at short notice than non-zero-hours contract jobs (the unadjusted effect). However, jobs of similar quality also involved regular work at short notice. Adjusting for this, zero-hours contract jobs involved slightly less work at short notice (the adjusted effect). 

Notably, zero-hours contract jobs were much less likely to be seen as leading to a long-term career.  However, the upside for employees doing these jobs was that they were much more likely to think they had enough time to complete their work within their allotted hours.  The different dynamic between hours worked and hours paid might also explain why zero-hours contracts employees were less likely to think work got in the way of any personal commitments they had outside of work. 

Zero-hours contract employees were more likely to think their contract didn’t suit their personal circumstances than other employees, even those in similar quality jobs.  This dissatisfaction, though, is generally concentrated among those zero-hours contract employees who would like to work more hours than they usually do (see Figure 2 below). 

Figure 2: Dissatisfaction with zero-hours contracts is mainly among those who want more hours
(UK, excluding self-employed, owner/proprietors and partners in a business, adjusted zero-hours contracts effect) 

SOURCE: GWI surveys 2022-2024. 

The proposed right to a contract with guaranteed hours would be based on hours worked (averaged over a given period, to be settled following consultation), so it is not entirely clear how this provision would actually improves the lives of people who routinely want more hours. 

The impact of zero-hours contracts on wellbeing 

Zero-hours contract employees report roughly similar wellbeing as other employees in comparable jobs across a range of measures (see Figure 3 below). For example, zero-hours contract employees were much more likely to say they intended to leave their job than those employees not on zero-hours contracts. However, it’s worth considering that ‘job hopping’ is more common in low-quality jobs irrespective of contract type, and the adjusted zero-hours contract effect reflects this, not being significantly different from zero. 

One key area of difference regarding wellbeing that should be noted is that zero-hours contracts employees were less likely than other employees to say they felt stressed on a regular basis. 

Figure 3: Wellbeing of zero-hours employees compared to other employees
(UK, excluding self-employed, owner/proprietors and partners in a business)

* “I am keeping up with all bills and commitments without any difficulties”.
SOURCE: GWI surveys 2022-2024.  

Finding a balance between the pros and cons of regulating zero-hours contracts 

The right to guaranteed hours may help employees in circumstances where uncertainty over the number of hours worked is a particularly stressful factor for them.  In addition, the practical management of zero-hours contracts, such as notification of shifts, could be improved in some cases, which may have a significant impact on employee wellbeing.  How the proposed legislation will work in practice depends on decisions that have been left for now but will be the subject of further consultation, most likely next year.  

Regarding employee wellbeing more generally, the scope of the government’s wider goals of establishing more secure and reliable jobs for workers will likely have to look beyond zero-hours contracts in order to have a genuine long-term impact. This is because the negative aspects of zero-hours roles are not just limited to those contract types, with issues of variability and insecurity being prevalent across other types of employment as well.