The New World of Work: recovery driven by rise in temp jobs

bureaux5Denis Pennel, managing director of Ciett, the international organisation for private employment agencies, says attitudes are also changing as technology and globalisation start to reshape the world of work. He thinks we have reached “the tipping-point of the employer-employee relationship” as both employers and some employees — particularly those with valuable skills — seize the chance for more flexibility.

As growth returns to the continent, these reforms will be put to the test. The early indications suggest employers in many countries are still reluctant to offer permanent contracts, although it is too soon to draw firm conclusions. The share of all workers who are temps, which fell in the crisis because they were the easiest jobs to cut, grew again last year in 13 of the eurozone’s 19 countries.

“In spite of reforms to make it more attractive to hire permanent workers, it seems as if temp use is on the rise again, and if anything it’s becoming more prevalent in higher skilled jobs and among young people,” said Bert Colijn, senior economist at ING. “But we don’t know for sure yet whether that’s structural or just a cyclical phenomenon.”

Some analysts believe the reforms did not go far enough to equalise the rights and redundancy costs for temporary and permanent workers. They also say that rules to limit temp use are not always properly enforced, and that employers fear some of the reforms will not last. One exception appears to be Italy, which this year introduced a new open-ended contract where workers accrue rights gradually over time. The share of new contracts that are permanent has climbed from 17 per cent in December to about 50 per cent. Still, Italy has also offered very generous social security discounts to companies that hire permanent workers, something the government is unlikely to be able to sustain indefinitely, since they cost about €5bn a year.

Professor Jansen believes the problem of two-tier labour markets will not go away without more action. But for now the priority for politicians should be to tackle the crisis’s “black legacy” of long-term unemployment — something temp work is helping to do.

“Introducing very strict restrictions on the use of temporary contracts in the current situation might . . . destroy the only bridge between the long-term unemployed and the labour market, if you don’t offer very flexible positions to employers,” he said. “But once the recovery is more solid, we should deal with this issue again.”

The full article from the Financial Times can be read here

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