Why Do Flexible Work Arrangements Exist?

Ten percent of workers have an IQR of £175 ($234) or more in weekly earnings, which is equiva- lent to 55% of full time earnings for a minimum wage worker during the sample period. [...] ZHC wages are approximately 6% lower than their permanent counterparts in the same occupation-industry in representative national statistics,6 and while some of this may be due to differences in marginal productivities, such as the risk of a ZHC not coming to work when needed, the lower wage sensitivities for ZHC workers indicate that firms have larger monopsony power over them. [...] Approximately 70% of the firm’s workers were on ZHCs in this snapshot, a proportion that is more typical for the low-pay sector. [...] Specifically, I utilise a location-specific wage floor that affects a small number of workers in a given area but is binding for The Company in locations where jobs are paid below the Living Wage. [...] The propensity to transition from ZHC to permanent, and vice versa, for entry-level workers is almost identical, while a far higher proportion of ZHC supervisors transition to permanent. [...] ZHC workers appear to commute farther than their permanent counterparts, and only about 15% transition to having a permanent contract within The Company, roughly the same proportion of permanent staff transitioning to a ZHC. [...] The results are instructive in determining whether certain demographic characteristics are more likely to be selected by the firm for permanent or ZHC positions, and the subsequent applicant decisions on whether to accept the offer. [...] The results suggest that the firm is more likely to make offers to females for both permanent and ZHC positions (by around 2-3 percentage points), and the only other predictor is the likelihood of being an owner-occupier. [...] Descriptive evidence shows that only 15% of ZHC workers apply for permanent posi- tions, which is similar to the proportion of actual transitions documented in 4.5. [...] Only approximately 15% of all ZHC workers within the firm ever apply for a permanent contract job, and they seem relatively wage-insensitive to applying to permanent positions. This suggests that they have a strong preference for their ZHC.