As many tech start-ups are forced to operate under zero-hour contracts, they need to ensure they are staffed by people who are able to work 24 hours a day.
A new study by the HR consulting firm HR Solutions shows that companies in the US and UK are increasingly using zero- hours contracts to fill key roles.
The firm’s research suggests that many of the companies employing these employees are not even remotely competitive, with many of them paying a premium to hire people with the right skills.
The HR Solutions study, published in The Journal of the Academy of Management, looked at the recruitment, training, and employment outcomes of more than 8,000 tech start up firms in the United States and the UK.
HR Solutions found that, despite the widespread use of zero-time contracts, most firms were not able to attract or retain highly skilled and motivated employees.
The findings were not surprising, as HR Solutions research shows that employers often face challenges with hiring talent and hiring the right people for specific roles, which can make it difficult to find the right workforce.
In the US, the number of companies that were using zero hours contracts increased from 0.5% in 2014 to 0.8% in 2019, while in the UK, it rose from 0% in 2015 to 1.1% in 2017.
The report also found that the number that had employees who had at least a four-year experience of a job was much lower than the number who had less than two years experience of work experience.
“This is an area that needs to be addressed as we grow our workforce,” said co-author and HR Solutions director, Rob Tippett.
“In the US this year, we saw that companies with employees who are a decade or more older were able to recruit more talent with zero time contracts.”
The HR Solution study found that most start-up firms in these countries were offering zero- or zero-job opportunities to employees for as long as 12 months.
“For a start-off company, the best way to hire the right staff is to find a new team,” said Tippetts.
“However, the most successful start-offs are able and willing to take on a zero-day job to fill a job for a couple of months.
In fact, in many cases, starting a company in the next three to four years is the most productive path for a start up company.”
‘No incentive’ to employ young people The HR solutions report also highlighted that in the most competitive start-to-finish tech start ups, many companies were relying on young workers for the bulk of their workforce.
The study found a wide range of factors that led to this, including the fact that companies were not recruiting the right talent to fill the jobs they were creating.
“Companies are paying young people very little to get into these roles,” said Dr. Michael Pappas, HR Solutions CEO.
“When they are paid more than a year’s salary, they are not hiring them for the roles they’re looking for.”
“Companies that are looking for a few thousand young talent are paying them more than $100,000 for a two-year contract,” said Pappis.
“They’re paying them a salary that is not competitive.
They’re not recruiting people that can get a five-figure pay cut.”
Tippets pointed out that in some areas, young workers had “no incentive” to go to work for zero-sum contracts.
“Most of the people we’re talking about here are the ones who have been offered the first contract, and the company is willing to give them the next contract, but they don’t want to be part of the next one,” said Co-author, Tippert.
“The fact that they’re able to get out of the first one is a positive.
But what’s interesting is that this is not just a young person issue.
There’s no job-seeking pressure. “
So there’s a whole lot of young people that are being used to fill these roles and there’s no incentive to them to join.
There’s no job-seeking pressure.
It’s just a way to make money.”