Job security
Encyclopedia
Job security is the probability that an individual will keep his or her job
; a job with a high level of job security is such that a person with the job would have a small chance of becoming unemployed.
, prevailing business conditions, and the individual's personal skills. It has been found that people have more job security in times of economic expansion
and less in times of a recession
. Also, some laws (such as the Civil Rights Act of 1964
) bolster job security by making it illegal to fire employees for certain reasons. Unemployment rate is a good indicator of job security and the state of the economy and is tracked by economist
s, government officials, and bank
s.
Typically, government jobs and jobs in education
, healthcare and law enforcement are considered very secure while private sector
jobs are generally believed to offer lower job security and it usually varies by industry
, location
, occupation and other factors.
Personal factors such as education, work experience, job functional area, work industry, work location, etc., play an important role in determining the need for an individual's services, and impacts their personal job security. Since job security depends on having the necessary skills and experience that are in demand by employers, which in turn depend on the prevailing economic condition and business environment, individuals whose services are in needed by employers tend will enjoy higher job security.
To some extent, job security also varies by employment laws of each country. A worker in Continental Europe
, if asked about his job security, would reply by naming the type of statutory employment contract
he has, ranging from temporary (no job security) to indefinite (virtually equivalent to 'tenure
' in US universities but across the whole economy). However, people's job security eventually depends on whether they are employable or not, and if businesses have a need for their skills or not, so although employment laws can offer some relief and hedge from unemployment risk, they only have a marginal contribution to job security of individuals. Fact is, individuals need to have the right skill set to have good job security.
In the aftermath of the dot com boom, computer related jobs experienced low job security whereas the situation was just the opposite prior to that. Since 2005 automotive sector jobs have experienced very low job security, and since 2007, real estate and mortgage related jobs have seen a big decrease in job security.
A growing number of American men have dealt with their unemployment and feelings of job insecurity by not returning to work. In 1960 5% of men ages 30–55 were unemployed whereas roughly 13% were unemployed in 2006. The New York Times
attributes a large portion of this to blue collar and professional men refusing to work in jobs that they are overqualified
for or do not provide adequate benefits in contrast to their previous jobs.
) or in the case of a company undergoing restructuring (subject to generous laws on redundancy payments and often with retraining
paid for by the company). In Spain, for example, such employees are entitled to 45 days redundancy pay per year worked. The high cost of redundancy payments is in practice what gives employees job security.
Whilst employees who have such legally-binding, indefinite contracts are in the enviable position of knowing that they (and their family) have complete financial security for the rest of their lives, it is important to realise that these obligations work both ways. In some countries such as Germany
a company may prevent an employee (whose occupational training they have paid for) from leaving to take up a better post elsewhere until compensation
is agreed. Even an employee of a company which is known to be about to fold may find himself compelled to stay with the company until the end even if he is offered work with a different firm.
Every company will have a mix of employees on different types of contract. Indefinite contracts can also exist for seasonal work. These so-called discontinuous contracts mean that a hotel
, for example, may dismiss its staff in the autumn, but it must take the same people back on again the following spring.
The proportion of the workforce
on indefinite contracts has fallen across Europe
in response to increased competition and globalization
. Companies may dismiss an employee just before he reaches the two-year mark and then re-hire him as a new employee. Many economists argue that greater labour market flexibility is necessary. Economics professors argue that the threat of unemployment is necessary to maintain incentives to high productivity. Meanwhile, John Kenneth Galbraith
has argued that some established economics professors simultaneously seek tenure. Jobs which are not backed by an indefinite contract are still poorly-regarded in many European societies, often disparagingly described as "precarious" or "McJobs", even when the company has good prospects.
In less regulated European economies, such as the United Kingdom
, it is much cheaper to sack permanent employees. In Britain, employees are only entitled to a legal minimum of one week's redundancy pay per year worked (one and a half weeks for workers over 40). Instead, private- and public-sector employees who feel they have been unfairly dismissed have the right to take the company to an Employment Tribunal
in order to be re-instated or to obtain extra compensation. It is not necessary to go through the normal court system.
In all European Union
countries an employee retains his existing contractual rights if his company is taken over under the Acquired Rights Directive
(in the UK, known as TUPE) so the years spent working for the old company would count when calculating redundancy payments, etc.
, such as location, industry, and occupation, as well as external factors, such as technology, outsourcing
, and overseas competition, which is captured in macroeconomic data and trends. Job Security Score also represents the creditworthiness of an individual based on their ability-to-pay by predicting an individual's probability of unemployment
risk. It is similar to the Credit Score
, which represents the creditworthiness of an individual based on their willingness-to-pay by evaluating an individual's probability of paying debts in a timely manner. The Job Security Score is a patent-pending payment risk scoring technology that was first developed by Scorelogix http://www.scorelogix.com/jss.asp, a pioneer in consumer risk analytics.
risk, by location, occupation, and industry. Launched in February 2004 and published monthly since January 2006, Scorelogix Job Security Index http://www.scorelogix.com/bs_jss_index.asp is a snapshot of the nation's job security level.
Scorelogix Job Security Index is based on an analysis of thousands of Job Security Scores for individuals across the nation and represents how global economic factors, internet and computers, international trade and competition, outsourcing
, off-shoring, job migration, etc., are impacting the demand and supply of employment
, job growth, and job security.
Job (role)
A job is a regular activity performed in exchange for payment. A person usually begins a job by becoming an employee, volunteering, or starting a business. The duration of a job may range from an hour to a lifetime . If a person is trained for a certain type of job, they may have a profession...
; a job with a high level of job security is such that a person with the job would have a small chance of becoming unemployed.
Factors affecting job security
Job security is dependent on economyEconomy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
, prevailing business conditions, and the individual's personal skills. It has been found that people have more job security in times of economic expansion
Economic expansion
An economic expansion is an increase in the level of economic activity, and of the goods and services available in the market place. It is a period of economic growth as measured by a rise in real GDP.The explanation of such fluctuations in aggregate economic activity is one of the primary...
and less in times of a recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
. Also, some laws (such as the Civil Rights Act of 1964
Civil Rights Act of 1964
The Civil Rights Act of 1964 was a landmark piece of legislation in the United States that outlawed major forms of discrimination against African Americans and women, including racial segregation...
) bolster job security by making it illegal to fire employees for certain reasons. Unemployment rate is a good indicator of job security and the state of the economy and is tracked by economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
s, government officials, and bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s.
Typically, government jobs and jobs in education
Education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
, healthcare and law enforcement are considered very secure while private sector
Private sector
In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...
jobs are generally believed to offer lower job security and it usually varies by industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
, location
Location (geography)
The terms location and place in geography are used to identify a point or an area on the Earth's surface or elsewhere. The term 'location' generally implies a higher degree of can certainty than "place" which often has an ambiguous boundary relying more on human/social attributes of place identity...
, occupation and other factors.
Personal factors such as education, work experience, job functional area, work industry, work location, etc., play an important role in determining the need for an individual's services, and impacts their personal job security. Since job security depends on having the necessary skills and experience that are in demand by employers, which in turn depend on the prevailing economic condition and business environment, individuals whose services are in needed by employers tend will enjoy higher job security.
To some extent, job security also varies by employment laws of each country. A worker in Continental Europe
Continental Europe
Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands....
, if asked about his job security, would reply by naming the type of statutory employment contract
Employment contract
A contract of employment is a category of contract used in labour law to attribute right and responsibilities between parties to a bargain.On the one end stands an "employee" who is "employed" by an "employer". It has arisen out of the old master-servant law, used before the 20th century...
he has, ranging from temporary (no job security) to indefinite (virtually equivalent to 'tenure
Tenure
Tenure commonly refers to life tenure in a job and specifically to a senior academic's contractual right not to have his or her position terminated without just cause.-19th century:...
' in US universities but across the whole economy). However, people's job security eventually depends on whether they are employable or not, and if businesses have a need for their skills or not, so although employment laws can offer some relief and hedge from unemployment risk, they only have a marginal contribution to job security of individuals. Fact is, individuals need to have the right skill set to have good job security.
In the United States
Job security in the United States depends more upon the economy and business conditions than in most countries because of the capitalist system and the minimal government intervention in businesses. Job security in the United States can vary a lot since the supply and demand for jobs depends on the economy. If the economy is good, companies experience more demand for their products and create more jobs, which increases job security. However, in periods of economic slowdown or recession, companies try to cut costs and layoff workers which decreases job security.In the aftermath of the dot com boom, computer related jobs experienced low job security whereas the situation was just the opposite prior to that. Since 2005 automotive sector jobs have experienced very low job security, and since 2007, real estate and mortgage related jobs have seen a big decrease in job security.
A growing number of American men have dealt with their unemployment and feelings of job insecurity by not returning to work. In 1960 5% of men ages 30–55 were unemployed whereas roughly 13% were unemployed in 2006. The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
attributes a large portion of this to blue collar and professional men refusing to work in jobs that they are overqualified
Overqualified
Overqualification is the state of being skilled or educated beyond what is necessary for a job. There can often be high costs for companies associated with training employees...
for or do not provide adequate benefits in contrast to their previous jobs.
Immigration and outsourcing
Immigration and overseas outsourcing may decrease job security for people in certain occupations. For example, telephone call center positions in the information technology sector are increasingly being outsourced to India where the same roles can be filled at a lower cost.In Europe
The main difference vis-à-vis the United States is the system of indefinite contracts. In most European countries many employees have indefinite contracts which, whilst not guaranteeing a job for life, make it very difficult for the employer to get rid of an employee. Employees who have legally acquired these rights, for example because they have been with a company for two years continuously, can only be dismissed for disciplinary reasons (after a number of formal warnings and subject to independent appealAppeal
An appeal is a petition for review of a case that has been decided by a court of law. The petition is made to a higher court for the purpose of overturning the lower court's decision....
) or in the case of a company undergoing restructuring (subject to generous laws on redundancy payments and often with retraining
Retraining
Vocational rehabilitation or retraining is the process of learning a new skill or trade, often in response to a change in the economic environment. Generally it reflects changes in profession rather than an "upward" movement in the same field....
paid for by the company). In Spain, for example, such employees are entitled to 45 days redundancy pay per year worked. The high cost of redundancy payments is in practice what gives employees job security.
Whilst employees who have such legally-binding, indefinite contracts are in the enviable position of knowing that they (and their family) have complete financial security for the rest of their lives, it is important to realise that these obligations work both ways. In some countries such as Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
a company may prevent an employee (whose occupational training they have paid for) from leaving to take up a better post elsewhere until compensation
Payment
A payment is the transfer of wealth from one party to another. A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation....
is agreed. Even an employee of a company which is known to be about to fold may find himself compelled to stay with the company until the end even if he is offered work with a different firm.
Every company will have a mix of employees on different types of contract. Indefinite contracts can also exist for seasonal work. These so-called discontinuous contracts mean that a hotel
Hotel
A hotel is an establishment that provides paid lodging on a short-term basis. The provision of basic accommodation, in times past, consisting only of a room with a bed, a cupboard, a small table and a washstand has largely been replaced by rooms with modern facilities, including en-suite bathrooms...
, for example, may dismiss its staff in the autumn, but it must take the same people back on again the following spring.
The proportion of the workforce
Workforce
The workforce is the labour pool in employment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic region like a city, country, state, etc. The term generally excludes the employers or management, and implies those involved in...
on indefinite contracts has fallen across Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
in response to increased competition and globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
. Companies may dismiss an employee just before he reaches the two-year mark and then re-hire him as a new employee. Many economists argue that greater labour market flexibility is necessary. Economics professors argue that the threat of unemployment is necessary to maintain incentives to high productivity. Meanwhile, John Kenneth Galbraith
John Kenneth Galbraith
John Kenneth "Ken" Galbraith , OC was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism...
has argued that some established economics professors simultaneously seek tenure. Jobs which are not backed by an indefinite contract are still poorly-regarded in many European societies, often disparagingly described as "precarious" or "McJobs", even when the company has good prospects.
In less regulated European economies, such as the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, it is much cheaper to sack permanent employees. In Britain, employees are only entitled to a legal minimum of one week's redundancy pay per year worked (one and a half weeks for workers over 40). Instead, private- and public-sector employees who feel they have been unfairly dismissed have the right to take the company to an Employment Tribunal
Employment tribunal
Employment Tribunals are tribunal non-departmental public bodies in England and Wales and Scotland which have statutory jurisdiction to hear many kinds of disputes between employers and employees. The most common disputes are concerned with unfair dismissal, redundancy payments and employment...
in order to be re-instated or to obtain extra compensation. It is not necessary to go through the normal court system.
In all European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
countries an employee retains his existing contractual rights if his company is taken over under the Acquired Rights Directive
Acquired Rights Directive
The Business Transfers Directive is a European Union law that protects the contracts of employment of people working in businesses that are transferred between owners...
(in the UK, known as TUPE) so the years spent working for the old company would count when calculating redundancy payments, etc.
Job security score
A job security score is a numerical expression of an individual's unemployment risk based on a statistical analysis of a person's individual demographicsDemographics
Demographics are the most recent statistical characteristics of a population. These types of data are used widely in sociology , public policy, and marketing. Commonly examined demographics include gender, race, age, disabilities, mobility, home ownership, employment status, and even location...
, such as location, industry, and occupation, as well as external factors, such as technology, outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
, and overseas competition, which is captured in macroeconomic data and trends. Job Security Score also represents the creditworthiness of an individual based on their ability-to-pay by predicting an individual's probability of unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
risk. It is similar to the Credit Score
Credit score
A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person...
, which represents the creditworthiness of an individual based on their willingness-to-pay by evaluating an individual's probability of paying debts in a timely manner. The Job Security Score is a patent-pending payment risk scoring technology that was first developed by Scorelogix http://www.scorelogix.com/jss.asp, a pioneer in consumer risk analytics.
Job Security Index
Job security index is a measure of the nation's job security level or unemploymentUnemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
risk, by location, occupation, and industry. Launched in February 2004 and published monthly since January 2006, Scorelogix Job Security Index http://www.scorelogix.com/bs_jss_index.asp is a snapshot of the nation's job security level.
Scorelogix Job Security Index is based on an analysis of thousands of Job Security Scores for individuals across the nation and represents how global economic factors, internet and computers, international trade and competition, outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
, off-shoring, job migration, etc., are impacting the demand and supply of employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
, job growth, and job security.
Other meanings
- Computer programmers half in jest consider complicated or badly documented software as added "job security" because it would be difficult to replace them with programmers unfamiliar with the software.
See also
- First Employment ContractFirst Employment ContractThe contrat première embauche was a new form of employment contract pushed in spring 2006 in France by Prime Minister Dominique de Villepin...
(CPE - a French contract which provoked massive protests before being finally repealed) - Contingent workContingent workContingent work, also sometimes known as casual work, is a neologism which describes a type of employment relationship between an employer and employee...
- PermatempPermatempA permatemp is an employee whose status is somewhere between a temporary employee and a permanent employee. The word is a portmanteau of the words permanent and temporary.There are two types of permatemp employment relationships...
- McJobMcJobMcJob is slang for a low-paying, low-prestige dead end job that requires few skills and offers very little chance of intracompany advancement...