Are Australians ready to break up with casual work?

Will casual workers be willing to return to tenuous employment arrangements and the same labour market which suffered massive job losses through COVID?

As Victoria and New South Wales exit lockdowns, pubs, cafes and shops across Sydney and Melbourne are opening up again to customers who are eager to get back to normal life. The casual jobs market is rebounding, but employers in sectors with high rates of casualisation such as hospitality and retail are finding it difficult to source adequate numbers of staff. 

The SEEK job site, for example, reported a 28.5 per cent month-on-month increase in jobs posted for hospitality and tourism, and a 20.6 per cent increase for retail and consumer products in September 2021. But Kendra Banks, Managing Director at SEEK ANZ says a large gap between those applying and those advertising meant "many hirers are still finding it difficult to recruit," she says. "Month-on-month applications per job ad are down slightly by 0.8 per cent nationally and remain significantly below pre-pandemic levels, down by 34.9 per cent when comparing September 2021 to September 2019."

While this state of affairs in the job market has led some commentators to declare that supply gaps and possibly higher wages meant workers were 'well placed' to bargain, is that enough to lure Australian workers back into casual work given the events of the past 20 months? A lack of safety nets, such as no leave and poor job security, were woefully exposed in lockdowns in the past year, potentially making casual work a less appealing prospect to job seekers.

Have Australian workers been turned off casual contracts?

According to Dr Evgenia Dechter, Senior Lecturer at the School of Economics at the UNSW Business School, there are downsides to taking on casual work contracts, but there are still clear benefits for both employers and employees.

"Casual contracts allow flexibility," she says. "Casual employment may also benefit certain types of workers. Since casual employment does not provide annual leave or sick leave it provides compensation to reflect these arrangements, termed 'casual loading'. Those seeking higher remuneration for a smaller number of available hours, for example, students and parents with caring responsibilities, might benefit.

"Employers may favour casual contacts over permanent contracts due to higher uncertainty about future demand and market conditions. As we recover from the recent restrictions, access to flexible low-commitment employment contracts may promote faster recovery."

Read more: Price of a life: why food delivery services need a regulation overhaul

But while she suspects we won't be seeing a decline in casual work any time soon, the increase in health risk, uncertainty in hours and decline in job security that workers have experienced over the past two years might see employers needing to offer "higher wages and better arrangements to attract workers to take some of these jobs," she says. "An increase in remuneration or improvement in working arrangements would provide compensation for the increase in higher job insecurity in casual jobs."

Hospitality, retail workers among those rocked by uncertainty

Sectors such as hospitality and retail were hard hit by multiple lockdowns, but with businesses opening back up Dr Dechter says supply and demand dynamics are reflected in job vacancies and conditions in sectors such as hospitality. "We need to take into account that some people who were in these jobs a few months ago or a year-and-a-half ago, may have found other types of employment and are not eager to go back to the hospitality sector with uncertain hours and higher health risk," she says.

"Employers will have to find workers in the pool of those who are unemployed and looking for a job. Currently, the unemployment rate is relatively low and if the recovery continues, it will be more difficult for the hospitality sector to attract workers."

But Dr Dechter also acknowledges that casual work is often the realm of "younger, less experienced or less skilled workers" for whom flexible employment remains the preferred option while they study or acquire skills needed to more desirable jobs. These workers are also more often affected by unemployment rates and job transitions.

Is the 'great resignation' part of a wider trend of workplace dissatisfaction?

In the US and the UK, employees are quitting and switching careers in droves or considering leaving their current workplace, in a trend industry commentators are calling 'the great resignation'. According to Gallup, in the US, 48 per cent of Americans in the workforce are actively looking for new jobs, with resignation rates at 4 million in July 2021.

Burnout, uncertainty, suffering mental health, poor workplace culture and treatment of employees through the pandemic together with a shift in priorities have all been cited as reasons for this shift in job mindsets. In Australia, casual workers accounted for two–thirds of those who lost their job at the beginning of the pandemic, according to ABS data. The security found in full-time and hybrid work is another possible reason for workers not wanting to return to casual arrangements.

Read more: A surge in demand: what record job vacancies mean for Australia

 According to Dr Dechter, the pandemic has marked an increasing gap in benefits for workers wanting a work-life balance. "Some workers have had the opportunity to establish new, more flexible working arrangements, specifically, remote work, which can be considered as an improvement in conditions [meaning it] will remain an option for a large fraction of workers," she explains.

"On the other hand, workers in some industries have seen their working conditions worsen, due to the increasing health risk and employment uncertainty. Workers' compensation in industries such as hospitality will have to catch up to keep their jobs attractive."

So, is this dissatisfaction a factor in employers' ability to hire casual workers, and what does it mean for employers who can't overcome it to hire staff or increase retention rates? "Firms that cannot offer better working arrangements or higher compensation will struggle to hire skilled workers and might be forced to exit the market," says Dr Dechter.