The personal side of job (in)security

Is the casualisation of work affecting our financial wellbeing?

For a growing number of Australians, work is characterised by instability. In recent decades, we’ve seen unprecedented growth in the number of poor quality jobs offering workers little control over their working lives and poor financial security – casuals, contractors, fixed-term employees, freelancers and workers employed through labour hire agencies. Today, around 40% of the Australian workforce is employed in non-standard conditions.

But what impact do unstable working conditions have on workers’ financial wellbeing?

The value of security

According to 2014 research conducted by PwC in the US, job security was the most important factor in achieving future financial goals for Generation X and Y workers. And 12% of all employees said they would be willing to sacrifice future pay rises in exchange for job security.

Unstable working conditions offer little to no security. And that’s reflected in our research into working Australians’ financial fitness – nearly half of all casual workers are concerned about their long-term savings.

In a pinch: the growing ‘precariat’

According to a 2013 study by the Australian Psychology Society, more than a quarter of Australians were concerned about being able to pay for essential needs because of uncertainty about the ongoing availability of work with their employer.

This growing group of people working in unstable conditions has been labelled the ‘precariat’ – and the name reflects their financial wellbeing. Our research found that 30% of part-time workers rate their current financial situation as ‘having difficulty’, and 23% of casuals are accumulating no monthly savings (the national average is 15%). The underinsured are also much more widely represented in this group – 19% of casual workers have life insurance, compared to 39% of full-timers.

Some say this group actually prefers this type of work. For some segments – full-time students picking up shifts on the weekend, young freelancers balancing work with travel – that might be true. But for families and people struggling to live pay cheque to pay cheque, unable to find the stable full-time work they need, the uncertainty can be a real concern.

In fact, in 2007 50% of casual workers said they would prefer ongoing work over their current situation – even if it reduced their income. That’s a pretty solid argument for job security. The same study also found that these workers were most likely to struggle to afford basic living costs, including rent – and casual and freelance workers made up 40% of all homeless people.

The bigger picture

Full-time work offers employees benefits other than their pay cheques – leave, holidays, professional development and a degree of security not afforded to those in the ‘an hour’s work for an hour’s pay’ camp.

The changing work landscape is most certainly affecting the financial fitness of the casual work cohort. And given financially stressed employees are more likely to spend work hours thinking about or dealing with their finances, there are also significant impacts on productivity and profitability for employers.

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