Analysis: The rise and rise of short-term contracts

Temporary work arrangements are on the increase in the sector. Mathew Little looks at why charities use them and their effects on charity workers

The temporary workforce in the charity sector is swelling
The temporary workforce in the charity sector is swelling

All eyes have been fixed recently on the growing proportion of voluntary sector organisations that use zero-hours contracts, but another type of employment contract in the sector has been quietly becoming part of the landscape.

According to May's Labour Market Outlook, a quarterly survey of 1,000 employers by the Chartered Institute for Personnel and Development, 35 per cent of new recruits to the voluntary sector are temporary. Overall, says the CIPD, nearly 25 per cent of the voluntary sector workforce is employed on fixed-term contracts, typically lasting between six and 12 months. This is a larger proportion than in the private sector, which registers 21 per cent, or the public sector, at 15 per cent. Over the past year, 31 per cent of voluntary organisations have increased the number of fixed-term contracts they have; only 9 per cent have reduced the number.

The CIPD figures are not definitive. By contrast, the National Council for Voluntary Organisations says that, at the end of 2012, 11 per cent of the sector workforce – roughly half of the CIPD's figure – was temporary. But it nevertheless seems clear the temporary workforce is swelling.

Gerwyn Davies, public policy adviser at the CIPD, predicts that the "low-cost employment model will continue at many voluntary organisations, especially those that have contracts with the public sector".

Sarah (not her real name) knows what it's like to work in the sector on a short-term basis. Over the past three years, she's had four jobs with environmental charities in London, all of them fixed-term, and some part-time. The length of contract has ranged from two months to 18 months. She feels short-term contracts have definite downsides. "You are often not given enough time to deliver the various projects you have to do and, because you know your contract is going to be up, you need to impress to get another job with the same organisation," she says. "You are more likely to do unpaid overtime, not to complain and to take whatever comes your way."

She says staff on fixed-term contracts are treated differently from others. "There's not a sense that you're investing in somebody, so getting training, for example, is quite hard," she says. But she is aware of a positive aspect, too. "Because I've had various jobs, I've taken different contracts that required very different skills and I've learnt a lot," she says.

When it comes to the reason for the growth of fixed-term contracts, one culprit looms very large – the competition in the sector for public sector contracts. As the contracts have become more short-term, says Davies, "many employers lack the confidence to offer permanent employment and instead opt for temporary arrangements". Employees also fear the contract might not be renewed, and this is reflected in a reluctance to provide permanent jobs.

So many people left the organisation I was working at because of these short-term contracts

Anonymous charity employee

Cost, too, has become much more of an issue as austerity intensifies. "Bidders have to almost under-bid to get the contract," says Davies. "Inevitably that will have an impact on the wages bill, because that's the biggest cost for organisations." Consequently, atypical forms of employment, such as zero-hours and fixed-term contracts, mushroom. Davies says this syndrome is particularly prevalent among charities that provide care, especially for older people.

The deeper question is whether charities are having their hands forced in relation to the employment contracts they can offer, or whether, in reality, they are taking advantage of a wider trend in the economy to reduce their employment costs as much as possible. "I'm not against flexible working," says Paul Jennings, an employment lawyer with Bates Wells Braithwaite. "Sometimes zero-hours and fixed contracts are appropriate. My concern is they are seen as a panacea and that there is a trend towards treating people as disposable."

Jennings says that for some charities, in common with organisations from other sectors, "it's become fashionable to minimise standards and reduce organisational commitment. There's an emphasis on short-term savings and the hidden cost is in the long-term cohesiveness of the organisation."

It is common, says Jennings, for finite project funding to translate into fixed-term employment contracts. "But that's not the complete answer, because lots of people that are put onto these types of contracts are actually indefinitely engaged," he says. "Some are employed on 12-month contracts that roll and roll. The employer wants the minimum commitment."

Sarah agrees with Jennings that reliance on fixed-term contracts ultimately diminishes the experience of service users. She says that many of the projects she has worked on had community outreach elements. "In those projects it's detrimental because creating community ownership of a project takes a long time and, often, you can't achieve that," she says. "It's really hard to build something sustainable."

She believes that, despite the handicap of precarious project funding, charities should attempt a different business model. "So many people left the organisation I was working at because of these short-term contracts," she says. "You could have arranged the projects differently and had permanent staff moving from project to project. I'm sure there are other ways of doing it, or at least work towards better wages."

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