Shaping the future of work

Segmenting the wider workforce disrupts a binary narrative about other forms of atypical work. In one corner, there is a tendency to claim that people are being driven into insecure, exploitative work by unscrupulous businesses; in the other, this work is touted as a choice people are drawn to because it offers more freedom and control. The reality is much more complex. Our segmentation appears to substantiate the theory that there are different degrees of economic security and that experiences of work can range across a spectrum. What this means is how secure a worker is or how rewarding they find their experience of work to be depends on any number of variables, such as their household circumstances or level of autonomy over tasks, as well as what they value in work at this point in their lives. Within atypical work, there are both positive and negative experiences, as is the case in traditional employment. Our seven portraits help us derive greater nuance about the modern workforce, and pinpoint opportunities for policymakers and others to intervene in support.

Overall, there are five key implications from our segmentation.

1. Conventional jobs are no panacea.

There are more than a dozen indicators of a good experience of economic security and work (and these encompass many more variables). Contract type and employment status are certainly factors of workers’ experiences, but they are not proxies for precarity — when we confuse them for such we overlook the many workers in seemingly secure jobs who are struggling to get by.

Taking a wider view of what it means to be economically secure and to have a rewarding experience of work illuminates that there are different kinds of precarity. Some workers — whom we characterise as the chronically precarious — are on typical employment contracts, but are persistently insecure because of low pay and low savings, little in the way of assets, and no one to turn to in times of financial hardship. Their experience of work is similarly bleak; they have no autonomy over when or how they work, nor much prospect of progressing.

Other workers — known as the acutely precarious — do not have the security of a full-time, permanent employment contract, and are thus prone to income volatility and problems managing their finances. Similarly, their experience of work is mostly negative, although they do have some autonomy over when they work. They thus have a greater sense of flexibility and can work in agile ways, manoeuvring around caring responsibilities for example. It’s important to note that even within this group, there is diversity — many workers (44 percent) are highly educated, suggesting that the job they’re in is simply a stop gap whereas others may feel as if they’re ensnared.

Had we simply tried to gage economic security from contract type or employment status we would not have captured these nuances in precarity. Moreover, we would have missed that insecurity is experienced across the income distribution to varying degrees rather than exclusively felt by zero-hour contract workers, for example.

2. Insecurity is both a personal and systemic phenomenon.

Our segmentation takes into consideration that people’s feelings and lived experiences matter alongside objective notions of economic security. What people value in work as individuals affects their feelings and experiences, meaning that it’s possible for two people to be in the same kind of job and have completely different perspectives on whether it is secure enough. As we found in our survey, different beliefs about what is important in work are related to differences in age in particular, or the stage an individual is at in life or in their career. Young workers tend to seek out job security and a high income, whereas older people may sacrifice these traits for greater autonomy.

In general, it’s necessary to accord weight to the subjective when assessing economic security. Indicators such as perceived agency or perceived ability to make ends meet help us capture the social and psychological dimensions of economic security. For example, there are middle and high-income earners who may be objectively secure, but perceive themselves to be ‘just about managing’ because they feel the pressure of being sole breadwinners and are anxious about maintaining their socio-economic status.

However, as personal as insecurity is, it is also influenced by systemic factors. For example, changes to welfare rules, public service provision, and educational opportunities can relieve or heighten insecurity. Wider forces such as globalisation and new technology may reassure some and aggravate others. Likewise, current political and economic trends can instil confidence in the future or exacerbate uncertainty. For example, as Brexit looms, some are forecasting that UK growth will seriously lag behind other EU countries. This is especially worrying given that both productivity and wages are already stagnating, while the cost of living soars.

3. Shared challenges across segments betray common and pervasive problems in and beyond and the labour market.

Although we may have seven distinct portraits of modern workers, there are shared challenges between them. This is evident by the sheer number of workers who are having trouble making ends meet, can’t turn to others in the household for support, feel stressed out by their jobs, haven’t progressed in the last five years and aren’t optimistic about future prospects.

Some problems are ticking time bombs that will be acutely felt in future; for example, the proportion of workers (40 percent) who do not expect to have enough in savings to maintain a decent standard of living in retirement. Others are problems that must be tackled now, such as the quarter of workers who do not feel like they earn enough to maintain a decent standard of living.

These challenges reflect inequality in the labour market, but also more broadly in the economy in terms of asset ownership, for example. The Resolution Foundation has found that wealth inequality is on the rise and can be attributed to falling home ownership. In a recent study, they concluded that wealth is distributed far less evenly than earnings or household income. It was noted that since the financial crisis, home ownership among the least wealthy 50 percent of the population has fallen by about 12 percent while rising by 1 percent for the wealthiest tenth.

This reinforces the point that economic insecurity is more than just a labour market challenge and will likely need policies that extend beyond labour markets into areas such as asset ownership and new institutions for sharing risk and reward.

4. Different places and different sectors can have a significant bearing on experiences of work.

Some segments may be concentrated in particular places or sectors, and these places and sectors can be in turn shape people’s experiences of economic security and work. For example, it can be especially challenging to be a part of the chronically precarious in London because of the high cost of living, but this may be more bearable as a single person living in a smaller, less expensive city. Similarly, we’ve noted that some segments, such as the strivers, are predominantly middle managers or professionals working in transport and logistics, health and social care, and the public sector. The implication is that it is worth pursuing place-based and sectoral approaches to raising the security and quality of work, which reflect the support needs of specific segments.

5. More flexibility shouldn’t mean less security.

As the report from Acas demonstrated, flexibility benefits both businesses and workers. However, in exchange for offering workers greater flexibility, businesses shouldn’t relinquish their sense of responsibility for ensuring that these workers are also able to maintain a decent living. As the Taylor Review advocated, there should be two-way flexibility, meaning that businesses also help workers maintain a level of security even as the particular job or wider labour market becomes more flexible. There could be a revival of the Quaker industrialist tradition, for example, in ensuring that workers have access to housing, transport, and recreational space.

Yet, it’s important to keep in mind that no single reform will improve the economic security and employment experiences of British workers. We do not purport to be offering all of the necessary solutions and our suggested interventions, ranging from local enforcement of the minimum wage to personalised training accounts, are a starting point.

There are three types of interventions that can be made to improve the circumstances of workers in the UK:

1. Alleviating interventions ease challenges that workers are experiencing over the short-term through a targeted approach; they are not designed to disrupt the status quo.

2. Transformative interventions seek to address systemic problems over the long-term to change circumstances for workers.

3. Innovative interventions are efforts to bridge the two, working towards transformation through experimenting with and trialling different approaches.

In our future programme of work we will consider how the portraits we have painted of today’s workplace might be impacted by macroeconomic forces such as automation, demographic change and globalisation.

We will also carry out more detailed research into potential reforms and innovations, including those outlined above that hold the most promise. Over the next two years, the RSA’s Future Work Centre intends to examine different scenarios for the future of work that draws on these seven portraits. We will take a more detailed look at particular sectors where change is rapid and disruptive, collaborating with stakeholders across business, government and the workforce.

Our seven portraits enhance our understanding of workers’ current experiences of economic security and the quality of work in the UK today, as well as offering a glimpse of how workers can enjoy high levels of both. However, it also makes clear the scale of the challenge if we are to realise the RSA’s vision of an economy in which everyone can experience economic security and have access to good quality work that supports their pursuit of a larger life well-lived.