Re-Blog – by Judy Palmer-Brown – Senior Training Consultant, TAFE NSW – Western Sydney Institute, http://bit.ly/1dP7aCo
A casualised workforce is a widely accepted reality of the Australian working population, but is it efficient?
Casualisation has been a feature of employment in Australia for several decades. But what are its long term implications for Australian workplaces and more importantly Australian society as a whole?
In the latter half of last century, employers embraced casualisation as a flexible option for increasing and decreasing manpower depending on the workflow of the business. The concept was somewhat akin to the ‘Just in Time’ business strategy introduced to the US by Henry Ford in the 1920s, and is perhaps in line with that philosophy.
Just in Time (JIT) is about producing goods in response to demand instead of in anticipation of demand. It challenges the idea of maintaining a warehouse full of goods awaiting an order by suggesting that products could be produced and shipped to the client on demand. Likewise, why pay for a permanent workforce in idle times? Why not bring in labour and skills as required, and save the organisation the costs associated with maintaining a permanent workforce?
It would seem that many Australian businesses believe in the efficiencies that a casualised workforce can offer them. Almost a quarter of all employees in Australia (23.9 per cent, or 2.2 million people) reported as casual employees.1
The proportion is even higher after adding more than a million contractors and the hundreds of thousands employed through agencies.
Perhaps we should define the term ‘casual’. Casual jobs are commonly understood as jobs that attract an hourly rate of pay but very few of the rights and benefits, such as right to notice, the right to severance pay and most forms of paid leave (annual leave, public holidays, sick leave etc.), normally associated with ‘permanent’ (or ‘continuing’) jobs for employees.2
In theory a casual pay rate should include a 20% loading on the hourly rate awarded to a permanent employee undertaking the same role to compensate for not having these conditions. However, this is open to exploitation with employers often engaging a ‘casual’ in a lower grade role, supervised by a permanent staff member.
There are further disadvantages for the casually employed. Often employees do not have the same access to professional development, eligibility for internal career opportunities and for progression. Other personal disadvantages include impaired ability to access bank loans and long term personal budget planning. Such factors have a significant effect on our society given that the opportunity for home ownership is limited and dependence on welfare is increased to support workers during gaps between employment.
On a positive note, employers are more likely to take on a person who is known to them as a ‘casual’ employee rather than risk choosing a permanent employee from a pool of people whose current skills, and work discipline are unknown. This is known as ‘indirect transition’ to permanent employment.
While the ability to increase and decrease staff numbers is appealing for employers, it should be noted that it is not without risk. Most commentary on the ongoing casualisation of Australia’s labour force focuses on the plight of casual workers who have lower job security and less attractive employment conditions. There has been far less analysis of the implications of this trend for business in the long term.
As previously mentioned, casual employees may have less access to professional development opportunities, and are often less skilled than their permanent colleagues. The ‘casual worker’ who perceives their employment as insecure or short lived may have an equally poor commitment to the philosophy and goals of the workplace.
Levels of productivity may be inferior as they know they will be moving on from the business and therefore the level of security offered by the organisation is reciprocated with an equal share of disengagement. This can leave the organisation vulnerable to poor customer service resulting in a negative public perception and a negative impact on the bottom line.
Less engaged employees may have a negative effect on company culture and employee morale, particularly when casual employees out-number permanent employees in an organisation.
Using casual employment options may suit short term interests of cost saving; however it certainly has the potential to depress innovation and dynamic productivity and therefore not be in the medium or long term interests of individual employers.3
A casualised workforce certainly holds advantages for particular classes of enterprise. The ability to quickly release an inefficient worker or reduce or expand labour costs overnight to meet budget challenges is certainly appealing in the short term; however with a few years of historical data now available, perhaps it would be prudent for the business to analyse how the negative aspects have affected the growth and innovation of the business and the professional maturity of the organisation, particularly when our people can truly be our greatest asset.
1. Independent Inquiry into Insecure Work (2012), Australian Council of Trade Unions.
2. May, R., Campbell I., & Burgess J., (2005), ‘The rise and rise of casual work in Australia.’ http://www.aeufederal.org.au/Women/Risefall.pdf
3. Hall, R. (2000) ‘Outsourcing, Contracting-Out and Labour Hire: Implications for Human Resources Development in Australian Organizations’, Asia Pacific Journal of Human Resources 38 (2), 23-41.
Many enterprises find that their workers hold an invaluable understanding of how the business is operating and what steps can be taken to improve work flow.