Saturday, February 05, 2011

Casual, contract & the older worker

Reducing Australian un and under employment 1 introduced some of the problems that PM Julia Gillard must overcome if she is to reduce the two million or so Australians who are un or under employed. In this post, I want to focus on the contract worker and especially the older worker.

We can think of the problems here along two dimensions. Dimension one is the nature of contract work. Dimension two is the age factor.

Over half the Australian workforce is now either contract or casual. Many employers like casual or contract work because it increases their flexibility in matching head count to business. Some, not all, employees like contract work because it gives them greater flexibility.

By its nature, contract work is less certain. Contracts may roll over, but the contractor always faces an uncertain future. Some mind, some don't. In either case, it is quite normal for contractors to experience regular gaps in work. This increases the work churn factor, the number of people looking for work at any one time.

Unlike long term employees where firms can expect some payback for things like training, contractors are used because they have the skills that the organisation needs now. Further, those skills tend to be very specific. There is not much demand for good contract managers, lots of demand for people with specific skills in, say, SPSS (Statistical Package for the Social Sciences) or Excel financial modelling.

I now want to introduce the second dimension, age. Older workers tend to have broader based skills because of experience.  They tend to have less of the very specific skills often required for contract work.

In theory, the answer lies in further training to acquire marketable skills. In practice, there are problems.

Training takes time and is expensive. Age reduces the payback period simply because the remaining working time is less. Further, just having the formal skills is often not enough. Employers want demonstrated skills, so a chicken and egg problem emerges. You need work experience to get a job, but can't get that experience without a job.

Now link this to the PM's objectives.

I haven't checked the demographic data, but quite a proportion of her two million target group are older workers who struggle to get a permanent job because of age, but who also struggle to get contract work for the reasons I have just given. Add in discouraged workers, those who have dropped out because it has all become just too hard, and you are dealing with a very large number.

Can this problem be addressed? To a degree, yes. Will it be addressed by the Government's thinking as so far revealed? Probably not. If I am right, there is going to be a large and growing group of older workers remaining in the un and under employed categories.

Statistically, the PM's objectives are already in trouble.

In my next post, I will look at the young.  


Re-reading this post before publication, I recognise that I am broad-brushing. For example, there is considerable variety in the range of contract work and of contractors. The very definition of contract work is uncertain.

There is no doubt that ageism is an issue, one that applies regardless of the type of work sort. Two comments from a comment thread in the Australian capture elements of this. 

Andrew of Adelaide Posted at 4:02 PM February 04, 2011

The jobs are out there in masses for the over 40 year olds no problems. It is the Gen Y recruitment consultants that are not forwarding the CV of the most skilled people in our economy. Discrimination starts and ends at the recruitment agency, the government need to bring back the CES or something similar on nationalised level with staff on contracted wages. This will fix the problem overnight.

Stan Posted at 4:45 PM February 04, 2011

I lost my job during GFC but could not re-enter the workforce for the last 2 years. "Someone more suitable" is always the reason for my unemployed status despite the fact that I have a professional qualification plus a masters degree completed before the GFC. In other words, my skills and training are up to date. But no one (esp the Gen Y recruiters) mention the age factor but I am over 50. Am I unlucky or is there a structural defect in the whole employment scene? If Julia Gillard is serious in getting jobs for the willing, she should have a talk with the recruitment agencies.

The ageism issue is not always what it seems because it works itself out differently for different types of workers. Later in this series I will look at some of the very specific dynamics involved for both employer and employee. For the moment, I am just getting some initial issues down.

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