The number of workers on zero-hours contracts has increased by 288% since 2020; however, plans by the government to crack down on unfair zero-hours contracts are likely to affect small businesses across the UK.
The government's Employment Rights Bill will introduce changes to laws around zero-hours contracts, with the King's Speech confirming that a ban on "exploitative" zero-hours contracts will be tabled.
The anticipated changes to employment law are likely to affect a number of key business sectors in the UK, especially hospitality, where 27% of staff are on zero-hours contracts. The number of people on zero-hours contracts has increased by 288% since 2020.
Digital staffing platform Coople has analysed the potential impact of changes to employment law and says that if zero-hours contracts are restricted, UK businesses may need to find alternative ways to manage staffing, particularly when both the business and the worker want flexibility in the contract. However, it suggests that a likely scenario would be that businesses could offer zero-hours contracts as long as they also offer candidates a contract with set hours.
"All companies who rely on workers on zero-hours contracts should pay close attention to the coming changes. It may be that businesses will have to find new ways of working in order to remain compliant with UK employment law." John Dawson, vice president of customer success, Coople.
Several models for flexible contracts could be considered by the government, including contracts that offer a set number of hours of work, spread out over a specific time period, while still allowing for varied hours. The UK could follow the example of countries like Germany, for example, where employers must offer a minimum number of hours per day or week.
Business insurance provider Uswitch has analysed the latest data from the Office for National Statistics (ONS) showing the number of zero-hour contract workers in the UK by industry, age and region.
Zero-hour contracts in numbers
- Over one million people in the UK are on zero-hours contracts.
- 10% of 16-24 year olds are on zero-hours contracts; many of these are students.
- 5% of people over 65 are on zero-hours contracts.
- 27% of those working in the accommodation and food industry are on zero-hours contracts.
- London and the West Midlands are the UK's zero-hours contract hotspots.
Andy Elder, Uswitch business insurance expert, said: "Businesses preparing for a world without zero-hours contracts must prioritise flexibility through strategic workforce planning. This involves investing in employee training, fostering a culture of adaptability, and leveraging technology to optimise scheduling.
"By creating clear, predictable work patterns and engaging in transparent communication, companies can maintain operational efficiency and employee satisfaction without relying on zero-hours contracts."
Written by Rachel Miller.
