Measuring the casualisation of your workforce

The ‘gig economy’ is the most recent incarnation of a decades-long trend toward under-employment and the ‘casualisation’ of our workforce. But how do you tell if this trend is playing out in your area?

When you think of under-employment, what do you think of?

Uni students working weekend hours at the local shopping centre? Retirees working part-time or casual jobs, just to ‘keep their hand in’?

What about people picking up a few hours in the gig economy, driving an Uber, helping someone on Airtasker move their fridge, or weaving their bike through peak-hour traffic with your bowl of steaming-hot Pho strapped to their back?

These people are all employed, but they’re probably not working 38-hour-weeks.

Therein lies the importance of measuring Full-Time-Equivalent (FTE) employment data, rather than simply ’employment’ data.

We recently sat down with Peter Brain, the founder and chief economist of National Institue for Economic and Industry Research (NIEIR) to discuss how councils can better understand the casualisation of their local workforce.

(NIEIR produce the economic data used in our economic profiles, economy.id; they’re also well known in the local government sector for their annual State of the Regions report)

It’s not actually ‘casualisation’

The term “casualisation” is actually a bit of a misnomer because the shift to more part-time work doesn’t necessarily mean more casual employees. In fact, the percentage of workers in Australia described as “casual” (i.e. workers without paid holiday or sick leave) hasn’t really changed since the 1990’s.

What has changed is the percentage of workers who are working part-time – from less than 10% in the late 1960’s to over 30% today.

The following charts are from the RBA Bulletin report The Rising Share of Part-Time Employment, 2017

Source: Reserve Bank of Australia https://www.rba.gov.au/publications/bulletin/2017/sep/3.html

Why the shift?

The shift to part-time work has occurred for a number of reasons.

The increase in Australia’s population, combined with a growing older age cohort (65+) has given rise to an increase in service industries employment. Many of these service industries (industries which exist essentially to “service” the population, such as retail, accommodation and food services and health care) are more likely to employ part-time workers.

But also, a large part of the change has occurred because it’s what many of the workers want.

A recent HILDA survey (Household, Income and Labour Dynamics in Australia) conducted by the University of Melbourne, suggests that the main reasons for part-time work are for students to study while working part-time, and also for parents to work whilst caring for children.

In the older populations, as older workers transition to retirement, the most common reason for working part-time is simply a preference for that type of work.

Employment vs Full-Time-Equivalent (FTE) employment

The significant change in Australia’s employment landscape means care should be taken when making decisions or plans based purely on employment, or unemployment statistics, because they may not tell the full story – a person can be described as “employed” even if they only one hour per week.

So, to reflect the real trends of employment growth (or decline) in industries within Council areas, it’s more effective to look at Full-time equivalent (FTE) employment.

FTE, calculated simply from hours worked per industry, can reveal if employment growth in an industry is aligned to an increase in overall hours worked – or simply more workers, each working fewer hours.

Compare employment and FTE data for your area

To complete this section you will need access to our community profile and economic profile tools in your area. If your council subscribes to these resources, you can access them via our demographic resource centre here.

The graph below shows a decline in full-time employment and growth in part-time employment – a trend you will see in many community profiles.

Find this data: Open your community profile > What do we do? > Employment status

Chart the trend in part-time employment

The Time series industry sector analysis page in your economic profile lets you easily compare employment (total) and employment (FTE) on a chart, showing how the two have changed over time.

Below is a textbook example, showing a steady increase in employment that belies the underlying drop in full-time-equivalent employment.

Find this data: Open your economic profile > Industry focus > Time series industry sector analysis

Scroll down to see the time series chart above, and use the Measure menu to toggle between Total and FTE employment.

How employment data is calculated in our economic profiles

The employment data used in our economic profiles (economy.id) is developed by the National Institute of Economic and Industry Research (NIEIR). We recently spoke with Peter Brain, the principal of NIEIR, about why they prefer using FTE as a true measure of local employment for Local Government economic analysis.

Have you seen this trend in your area?

If you’ve noticed the impact of an increasingly part-time local workforce, we’d love to hear from you.

If you’re responsible for economic development, how are you measuring and addressing under-employment in your area? Let us know in the comments!