No dramatic rise in temporary employment expected

Temporary employment will increase in Sweden, but not dramatically so, according to a newly published report. Permanent (ie, open-ended) contracts will continue to be the rule. Nevertheless, according to another recent study, there is a need for improving employment security for those with fixed term contracts. This feature summarises the contents of the reports.

A frequently repeated statement in discussion on industrial relations is that temporary employment will be much more common in the future. This assumption is refuted in a recent report from the National Labour Market Board (Arbetsmarknadsstyrelsen,AMS).

Research findings

AMS has studied how employment relationships have developed on the Swedish labour market during the 1990s, the sectors where temporary employment is most common and which categories of employees work on short-term contracts. It has also undertaken an inquiry amongst 300 large companies, asking how they will provide for their personnel requirements up to 2000. The main findings are as follows.

• The number of permanently employed persons has decreased substantially, from over 3.6 million in 1990 to little more than 3 million in 1996. At the same time, the number of workers with temporary contracts increased from around 400,000 to approximately 500,000. At the beginning of 1997, 13% of workers were in temporary jobs (the proportions vary slightly on a seasonal basis). Many temporary jobs that emerge on an upward economic trend become permanent jobs as time passes.
• Temporary contracts are more common in certain sectors than in others. In personal services, arts and entertainment, agriculture, forestry and fisheries as well as health care, one in five workers is employed for a limited period, while in manufacturing industry only 7% of workers are in temporary employment.
• Since there are many women working in sectors where temporary employment is more common, temporary employment is more frequent among women than men. In addition, young people have a smaller chance of obtaining permanent employment. Of women between 20 and 24, only 50% are employed on a permanent basis whereas the corresponding figure for men is 70%.
• The largest group with short-term contracts, 40% on average, are those recruited as replacements for absent employees. Short-term contracts for specific projects are also common. Probationary employment varies with fluctuations in the economy.
• Women also have the most insecure forms of temporary employment. For example, it is mostly women who are on call to the employer when the need arises to work possibly for only a couple of days. There are also more women than men who work as replacements, under contracts with a duration from a week to several months. In comparison with these forms of temporary contracts, employment on a project basis is regarded as relatively secure. The same goes for probationary contracts, which become permanent employment if the employer fails to take measures to suspend them.
• Of the companies taking part in the inquiry, 20% responded that the coverage of temporary employment is expected to increase in the next three years. Companies seek other solutions to meet their needs for flexibility, for example by varying working time with fluctuations in the economy or recruiting workers who are employed by the employment agencies.

The investigators concluded that predictions that temporary employment will be much more frequent in future are not well founded. On the contrary, any increase is likely to be moderate. The number of young people is declining, and employment in sectors which are dominated by women is not expected to rise very much. The authors estimate that at the turn of the century 15%-17% of employment contracts will be on a temporary basis.

In another study about to be published, Professor Gunnar Aronsson at the National Institute for Working Life investigated forms of employment from the workers' perspective, through a survey of 1,500 people. Half of them were in permanent employment and half had employment contracts for a limited period. Almost all the respondents, 96%, answered that they preferred permanent employment. This preference was so strong that of those who had temporary jobs 58% would be prepared to change to a permanent job that they thoroughly disliked. On the other hand many (28%) of those who were permanently employed wanted to change jobs, but feared that if they did they would be the first to be dismissed by their new employer. They felt locked in to their present jobs. These workers were almost twice as likely to experience health problems as other respondents.

Commentary

Even if there is no dramatic change in employment structure, Professor Aronsson's study shows that there is a need for improving the security of those on temporary contracts. He suggests a form of "risk bonus" payment to the employee concerned.. This might encourage flexibility in a way that could be advantageous for both employers and employees.

It is also necessary to monitor employment agencies which lease personnel to other companies. Formally, their workers are not temporarily employed, but these arrangements makes it possible to circumvent labour law and collective agreements. An official committee has recently proposed that these firms should be subject to more state regulation. (Kerstin Ahlberg, NIWL)