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Temporary workers suffered job losses at a higher rate than non-temporary workers at the beginning of the pandemic. Still, most economies have since seen a rise in newly created temporary jobs.
The change in temporary work is one of the conclusions in the yearly report World Employment and Social Outlook from the International Labour Office [1]. “Temporary work” is an employment situation where the working arrangement is limited to a specific period based on the needs of the employing organisation.
The report states that temporary work is a buffer in times of economic uncertainty [1]. Before the pandemic, temporary employment as a share of total jobs had increased over time, though not uniformly across sectors and countries.
Temporary employment rates are highest in low-income countries.
In general, temporary work accounted for an essential proportion of wage employment in many countries worldwide, with significant variation across nations.
Temporary employment rates are highest in low- and middle-income countries. But the nature of temporary employment varies between developed and developing countries. In the former, although it may be an entry point into a more permanent position, or a flexible and strategic means of entering and engaging in the labour market, temporary workers lack job security and regular incomes. They do not always fulfil the eligibility requirements for access to social protection or employment protection.
On the other hand, temporary work often comes in informal employment with little to no access to social protection systems and employment protection for workers in the developing world.
The occupational composition drives temporary employment.
Temporary employment is structural mainly and driven by the sectoral and occupational composition of the labour market; however, during crises, it tends to serve as a shock absorber as employers scale back on the use of temporary workers. In the longer term, temporary employment can negatively impact the long-term productivity of companies through its effects on job retention, training and innovation. Workers are also adversely affected by short work, given the more important job and income insecurity and lower access to social protection.
The report [1] states that temporary work in developed economies most commonly relates to fixed-time contracts is tied to employment protection legislation and has positive and negative aspects. It can allow individuals to be introduced to different occupations or roles in work; this is mainly for first-time employees. It can provide an opportunity to gain experience in a new firm, enable on-the-job learning and ultimately be a stepping stone to a permanent job. For others, it can provide a means to build networks, gain exposure and experience and secure more work in the long term.
Workers’ concerns are less about employment protection legislation than vulnerability in developing economies, both in work and between jobs. In such economies, a temporary position is more widespread and closely linked to informality. Employment protection legislation may be in place but is not necessarily complied with or enforced. Temporary employment is expected – notably casual employment in agriculture, especially in informal jobs – but quick work has also increased as a share of formal employment in some cases.
The occurrence of temporary positions, whether structurally inherent to industries, occupations or economies, or cyclical, is likely to affect workers negatively. First, because of the prevalence of decent work deficits in developing economies and the lack of rights and benefits for informal temporary workers: increases in the use of temporary employment may exacerbate these pre-existing decent work deficits. Second, the relative absence of social security and the insufficiency of contingency measures for workers contribute to the vulnerability of temporary jobs. However, such issues are more concerning when there is some informality in the labour market. They are then more to do with the underlying informality than with the temporary nature of the work.
A rise in newly created temporary jobs
Temporary workers suffered job losses at a higher rate than non-temporary workers at the beginning of the pandemic. Still, most economies have since seen a rise in newly created temporary jobs. The net effect of these two trends is that the incidence of this kind of work has tended to remain stable through the pandemic. Based on limited available data, the trends are not dissimilar from pre-crisis trends, highlighting the endemic churn of temporary workers before the crisis.
In the early stages of the pandemic, informal employment did not play its traditional countercyclical role of absorbing displaced workers from the formal sector in countries characterised by dual labour markets. In many such countries, informal workers were more likely than legal workers to lose their jobs or be forced into inactivity by lockdowns and other measures. As economic activity gradually resumed, informal employment, especially self-employment, has had a strong rebound, and many casual workers have returned from inactivity.
The increasing use of temporary work is a long term macroeconomy trend.
The report [1] concludes that temporary work has a significant structural element but can also be increased use of “temporary work” during crises due to business uncertainty. There are signs of considerable labour market churn of temporary workers in countries with available data since the onset of the pandemic. Still, the trends have not been dissimilar to those evident the year before the pandemic.
It appears that the dynamics for workers, enterprises and the macroeconomy are long term. A crisis over some years will not necessarily affect tied to the crisis. Although temporary work benefits enterprises and workers, it also adversely affects both enterprises and workers. At the same time, there is no consensus on the optimal mix of flexibility and security.
References
[1] World Employment and Social Outlook: Trends 2022. Geneva: International Labour Office, 2022.
Lucubrate Magazine February 2022
The photo on the top of the article: Adobe Stock
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