Resources

The Impact of the Global Rise in Part-time Employment

by
March 27th, 2013

Since the global economic downturn of 2008-2009 there has been a significant rise in the number of part-time workers globally. The reduction in production demand has caused more companies to reduce staff hours as a cheaper alternative to making redundancy payments. Part-time work enables many women to continue their careers after having children, boosting female spending power. Yet part-time employment can contribute to underemployment where employees are not working to their desired capacity.

What is the positive cost impact of increased part-time employment?

The growth in part-time employment is driven partly by employers and partly by employees. One of the main employer reasons is to address the problem of excess manpower to meet reduced production demand due to the ongoing effects of the economic downturn of 2008-2009. Employers may often offer employees the chance to avoid redundancy by remaining in employment on reduced hours. This benefits both the employee, who keeps the certainty of a job albeit on lower hours, and the hope that when business picks up again that their hours will return to normal.

Employers benefit by avoiding redundancy payouts and the minefield of redundancy selection criteria, which if not applied fairly could lay them open to costly legal claims. They also avoid recruitment and training costs involved in hiring new staff when business picks up again.

How is the rise in female employment globally affecting part time employment?

A key driver of the part time employment trend is the rise in the number of working mothers globally and a growing willingness among employers to offer them flexible working hours. Female part time workers far outnumber men in all regions for this reason. The number of female part time employees in Western Europe was 32.3 million in 2012, while the number of male part time employees in the region was 10.8 million in the same year. The female employment rate has risen from 59.1% of the working age female population aged 15-64 in 2007 to 59.7% in 2012 in Western Europe partly as a result of this rise.

What drawbacks are there to part time employment?

The rise in part time employment is contributing to ‘underemployment’, which means that workers who would like to work more hours are not able to do so- this has contributed to weak consumer confidence in key regions and poor growth in income levels. In North America and Western Europe, there were real total declines of 3.3% and 3.7% in per capita annual gross incomes from 2007-2012. This in turn has resulted in cutbacks in consumer spending, particularly on discretionary goods and hit the retailing industry as a result.

Where in the world are the highest numbers of part time employees?

Developed markets in Western Europe and North America have the highest rates of part time employees. The USA is home to the world’s biggest population of part time workers, at and their number has ballooned from 16.3 million in 2007 to 18.9 million by 2012 partly as a result of the Affordable Care act (so-called ‘Obamacare’), which became law in 2010 and compels US employers with 50 staff or more to provide full time employees (defined as those working 30.0 hours a week or more) with healthcare. As a result, many employers taking on new staff limit them to 25.0 hours or less per week to avoid having to make this payment. This is likely to increase underemployment in the country and limit discretionary spending.

Where is part time employment declining?

Many countries in Eastern Europe are seeing declines in the number of part-time employees, the number of part-time employees in the region as a whole has fallen from 7.2 million in 2007, down to 6.8 million in 2012. Part time employment is still a relatively uncommon way of working in Eastern Europe compared to Western Europe and the trend during the economic downturn has primarily been to make redundancies as opposed to reducing working hours.

Have a question or a thought to add? Leave us a comment below.

Euromonitor Research

Popular Posts