Job insecurity is growing and poses a major threat to worker well-being globally. International research shows employees prioritize job security above other job factors like pay and opportunities. While perceptions of insecurity sometimes exceed reality, trends like rising temporary work mean insecurity is increasing and negatively impacting well-being. Younger, less skilled workers are most vulnerable but long-term all workers will suffer from the psychological costs of unstable employment. Governments and companies should implement policies to balance labor market flexibility with stronger social supports to mitigate these costs to individuals and productivity.

1. The EIU: What will be the biggest trend shaping the way we work in the next 10-15 years?
Charles Seaford: From a health and well-being perspective, the big trend will be job insecurity.
Why is job insecurity a problem, and for whom?
Job insecurity is a major problem in the developed world. Ask people in Europe, for example,
whether they feel secure in their work, and 13% of them will say they are “likely” or “very likely” to
lose their job within a year. That particular number is from the EU’s Third European Quality of Life
Survey 2012, but it’s a trend we see confirmed in our own recent research. Our latest qualitative
studies suggest that job security is a top priority among the workforce. They also underline the
fact that security of income is crucial for an individual’s sense of positive well-being. Conversely,
the effects of a lack of security are profoundly negative.
Is it just an issue for Europe?
International research across the OECD shows that employees everywhere rate job security highly.
In fact, a 2009 study [by Andrew E Clark, Work, Jobs and Well-being across the Millennium] showed
that between at least 1989 and 2005 it was consistently their number one concern. At the end
of that period – before the financial crisis hit – 53% of men and 58% of women said job security
was “very important” to them. They ranked it as more important than how much they were paid,
S P O N S O R E D B Y:
Job insecurity
The growing insecurity of jobs will damage the well-being
of workers the world over
Faced with continued globalisation and rapid technological innovation,
businesses are under intense pressure to improve their ability to adapt. It
is widely believed that this pressure will force many companies to pursue
more variable staffing costs by making greater use of temporary or freelance
workers.
This threatens the job security that employees in the developed world have
come to expect. According to Charles Seaford, head of well-being at the New
Economics Foundation, this poses a grave threat to the well-being of workers
everywhere, especially the young.
And, as he explains in this interview with The Economist Intelligence Unit
(EIU), it is a concern for all businesses, as employee well-being correlates
with productivity. Employers should therefore bear in mind the psychological
costs of their policies when setting employment strategy, he advises.
This interview is part of an investigation into the future of work by The
Economist intelligence Unit, sponsored by Ricoh Europe. For more, visit
http://bit.ly/eiufuturework
Charles Seaford
New Economics Foundation

2. whether their work was interesting, whether they could work flexible hours, or whether there were
good opportunities for advancement. So the growth in job insecurity is hitting employees where it
hurts most.
Are workers’ fears about the security of their jobs justified?
There is evidence that perceptions of job insecurity are greater than the reality for some people. Data
also suggest that the average length of time people stay in a job has not declined as fast as people
think. But the problem with averages is that they mask variations. Some segments of the workforce can
suffer quite sharp falls in insecurity, which is masked by average trends. The percentage of people in
temporary or zero-hours contracts has certainly increased. So the perception of insecurity is probably
greater than it is in reality, but the trend is real nonetheless.
Will job security improve as the economy recovers?
Given the trend of much labour-market policy towards greater “flexibility” and the increasing global
competition in traded goods, the damage caused by job insecurity is only likely to increase. For
employers, it’s a well-established fact that a healthy sense of well-being at work leads to greater
productivity. They should keep this in mind. A flexible “hire and fire” policy might have some benefits
for companies, but they should factor in all the costs.
An insecure job might be worrying, but surely it is preferable to unemployment?
Unemployment is very damaging. But the emerging – and concerning – trend is job insecurity. Its
effects are not so well researched, or so well understood. But insecurity is clearly a major driver of
low well-being. If you look at the boost to an individual’s sense of well-being when they get a job
after a period of unemployment, that feeling is cut in half if the job they get is on a contract of less
than 12 months. What’s more, if you take the long-term unemployed out of the equation, people
who go from feeling very safe in their job to feeling that they might very likely lose their job suffer
the same drop in well-being as those who have actually lost their job.
Which parts of the workforce are most vulnerable?
Those who suffer most will be the young and the relatively unskilled. In Europe, we can already see
an emerging “insider and outsider” problem. There are young people on the “outside” – they move
from one insecure job to another. Then there are those on the “inside” – they are older, have been
in stable employment for years and have jobs that are relatively safe. But over the long term, I
think all members of the workforce will suffer equally.
What can be done to tackle this trend?
Governments could look at introducing “flexicurity” measures. By that I mean balancing the
flexibility of labour markets with much stronger social security. They could also create labour
market and adult training policies that are active and supportive, rather than passive and penal –
policies that are focused on getting people back into work.
An active industrial policy would generate stable jobs combined with a much more active
management of the skills system, so that the supply of skills matches the demand. Governments
could also create restrictions on zero-hours contracts and apply extreme care when liberalising
employment protection, to ensure that it is net beneficial to well-being.
It could take years for some of these changes to take effect, but governments could start now.
In the meantime, employees could join trade unions and actively campaign for skills training –
preferably transferable skills training.
Workers ranked job
security as more
important than how
much they were paid,
whether their work
was interesting,
whether they could
work flexible hours,
or whether there were
good opportunities
for advancement
Charles Seaford
New Economics Foundation
S P O N S O R E D B Y: