Employers worried about impact of in-work conditionality

A new study looks at what employers think about the policy of sanctioning part-time workers who don’t take on more hours or seek pay progression and finds worries about the impact on labour shortages in already struggling low-paid sectors.

Rising Costs


In-work conditionality rules which mean low-paid workers on part-time hours have to seek more hours or a new job or risk losing benefits could exacerbate labour shortages in certain sectors, according to a new report from Manchester Metropolitan University.

In the first study of its kind, more than 100 employers and stakeholders were interviewed about their views on Universal Credit and labour market policies, including the new rules on in-work conditionality for Universal Credit claimants, which are due to be rolled out to low-paid claimants from September.

In a section of the report on in-work conditionality [IWC], one employer stated: “If anything, if they’re looking for more hours, you’re probably looking at looking for a new job, a new career entirely… You’d be losing talent.”

Concerns have already been raised about some employees’ ability to increase their hours due to caring responsibilities, the cost of childcare and its availability.

Overall, employers disagreed with and were sceptical about in-work conditionality, although some, for instance, in social care, thought it could help them cover labour shortages. However, others said that their employment models – low-cost shift work, for instance, in the hospitality and retail sectors – often favoured part-time work and made offering more hours and/or higher pay unlikely on a consistent basis. There were also seasonal issues in some sectors and even in social care, consistency of hours is an issue, given the care needs of a particular service user may vary. The report says: “Employers appeared to only welcome this push to take on more work so long as it suited their own particular labour demands.”

Employers also said that their ability to pay more was hampered by other financial pressures they are facing and, in sectors such as social care, was often outside their control. Larger businesses and those in busy urban centres were more able to offer more hours, they said.

One employer pointed to a trade-off in terms of how work was distributed across their organisation, arguing that, if IWC were to result in more pressure to offer more full-time roles, this would negatively impact the number of jobs they could offer.

There was also concern that, if employees boosted their hours by taking on second or more jobs, it would affect their loyalty to their first employer. And there was a fear that people might leave if they couldn’t get the progression they needed to satisfy the IWC rules as well as a feeling that the rules undervalued part-time work. Other concerns voiced included JobCentres having more contact with employers on issues such as progression, which some viewed as intrusive.

Although employers felt they should be doing more on progression generally, there were worries that high skilled workers might benefit more with the new policy leading to greater churn in lower-paid jobs where there is a larger supply of candidates to choose from.  Instead, they said, there needs to be more government support, for instance, for childcare and through benefits reform to make it possible for people to work longer hours, and more business support generally.

The report calls for the estabishment of an in-work progression taskforce, comprising service users, employers, employer representative organisations, frontline employment support providers including Work Coaches, unions,
charities and researchers to steer the direction of IWP policy. It also states that the Department for Work and Pensions should recognise the limits of an ‘Any Job, Better Job, Career’ approach, especially where progression in key employment sectors is challenging ad focus instead on progression and longer-term career-development from
the outset, by supporting people into higher paying sectors or organisations where progression from entry level positions is more common.

The report says in work support should be sensitive to the realities of work in the UK labour market and of employee issues such as caring responsibilities. It calls for a locally delivered business support offer focused on people management and development and for a commitment from employers to  the Good Work agenda, including regular reviews of effective progression pathways, especially for part-time staff and the lowest paid in their organisations. I It concludes that, wherever possible, employers should pay the Real Living Wage, dispense with lower ‘youth rates’, guarantee working hours, and provide contracts that reflect hours worked.

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