Exploring the performance implications of precarious work

Abstract

Precarious work, or employment that is associated with temporary contracts, low earnings and limited or no employee representation, is on the rise. From an operations perspective, these practices should enable flexibility and reduce costs. However, from the perspective of most other social sciences, precarious work harms workers and should harm firm performance. The objective of this research is to provide a comprehensive analysis of the performance implications of precarious work. We collected survey data in the UK from multiple respondents (operations and human resource managers) along with secondary data to explore how the use of precarious work affects a company's financial, operational and occupational health & safety performance. The results were mixed. Precarious work did not have a significant influence on occupational health & safety performance and had a negative relationship with cost performance. We also established an inverted u-shaped relationship between precarious work and flexibility and financial performance; low levels of precarious work improve flexibility and financial performance and high levels of precarious work harm both. Finally, we explored if high-performance work practices could moderate these relationships, but the results were mostly insignificant. The results suggest that firms only benefit from relatively low levels of adoption of precarious work.