Professor Colin Lindsay of the University of Strathclyde blogs on recent research by Strathclyde Business School and the University of Portsmouth on drivers of under-employment, and what we can do to build back towards workplaces where people have access to the hours and shifts that they need.

There has been much discussion of the need, and opportunity, to build back better following the Covid-19 crisis. While much of the focus has rightly been on responding to the coming unemployment crisis, there is also a sense that we need to grasp the opportunity to create a ‘new normal’ that addresses some of the long-standing inequalities in the UK labour market.

One recurring problem has been that of under-employment – where workers want and need more paid hours but are not able to secure them. In late 2020, it was estimated that more than 3.5 million UK workers were under-employed (approximately 8.7% of the labour force).

The consistently high numbers of people under-employed is a problem that needs a fix as we re-boot the UK economy post-Covid-19. A recent analysis of EU and US data by David Bell and David Blanchflower suggests that under-employment contributes to limited pay and career progression for some workers. This adds to a growing evidence base that under-employment can impact negatively on employees’ wellbeing; contributes to in-work poverty; and limits opportunities for learning and progression. These negative impacts on employees contribute to socio-economic inequalities and may undermine the performance and productivity of organisations, sectors and regions. So, understanding the drivers of under-employment is important.  

That’s why the Universities of Strathclyde and Portsmouth have been researching the distinctive drivers and impacts of under-employment in different areas of UK, and how the workplace practices adopted by employers either contribute to or help to alleviate the problem. We are grateful for the assistance of the ESRC Productivity Insights Network in funding the research, and to our universities and the Scottish Trades Union Congress for supporting out work. Our report “Matching People to Jobs and Hours: Drivers and Productivity Impacts of Under-employment” is available now and can be downloaded from the Productivity Insights Network website. We also reported our findings at a webinar on Wednesday 4 November 2020 which you can watch in the video below.

https://youtu.be/myWh6t6CDDM

Our research involved a combination of quantitative and qualitative methods. First, we undertook quantitative analysis examining relationships between under-employment, productivity and labour market conditions across local areas. We constructed a dataset for 179 NUTS3 regions across the UK from Annual Population Survey data for 2016-18, so that were able to build an extensive sample of more than 300,000 employee responses. There were a number of key findings about the nature of the labour market inequalities at the heart of under-employment: it is a particular problem in remote rural and struggling urban areas; women are more likely to experience under-employment than men; young people are particularly at risk; and, perhaps crucially, people in service jobs and lower-skilled ‘elementary’ occupations were at greatest risk. From 2016 to 2018 under-employment among ‘sales and customer services’ employees averaged at 15 per cent, almost double the rate for the whole workforce. Overall, under-employment is only weakly associated with lower productivity per hour across local labour markets, although a link is observable. There are clear implications for demand-side strategies for ‘building back better’, which need to be tailored to the specific needs of rural and urban communities and seek to diversify local economies and deliver fair work.    

We also conducted 28 in-depth interviews with business leaders and HR managers in Scotland (17) and the Solent area of South East England (11), the geographies hosting the two universities involved in the research. Here, we were able to identify examples of good practice that we can learn from in seeking to reduce under-employment risks. Specifically, organisations that had invested in workforce planning and had strong HR capacity, and those with strong voice mechanisms through trade union recognition or other forms of employee involvement, were more likely to offer a convincing account of how they had managed down under-employment.

However, some of the employers with whom we engaged acknowledged that a substantial proportion of their employees were likely to be at risk of under-employment. In some cases, employers argued that the time and place-specific nature of work in sectors like retail, hospitality and social care meant that it was difficult to balance spikes in customer demand with the hours and shifts needed by staff. For others, under-employment seemed to be hardwired into their business models, which were partly based on demanding maximum flexibility on the part of employees while minimising staff costs through the elimination of ‘long hours’ contracts.  

Our conversations with employers again point to a number of lessons for policy and practice. We need to support the strengthening of HR capabilities and sharing good practice within and across organisations and ensure that there are opportunities for employee voice and trade union organising. Some jobs are always going to be in time and place-specific services, but we can help people to piece together enough hours by improving access to childcare, encouraging multi-skilling, and challenging employers who demand ‘full flexibility’.

Building back post-Covid-19 may offer an opportunity to arrive at fairer workplace practices that match people more effectively to hours and shifts. Employers and their employees, trade unions and stakeholders, and policymakers at national and regional levels have important roles to play in agreeing the actions that can help us to build back without under-employment.  

Our report “Matching People to Jobs and Hours: Drivers and Productivity Impacts of Under-employment” can be downloaded from the Productivity Insights Network website.

You can also catch-up on our webinar reporting our findings in the video above, which took place on Wednesday 4 November 2020.

You download the PowerPoint presentations from our webinar here: