`Flexible' jobs seen as future face of labour of the future

DIANE COYLE

Economics Correspondent

Nearly half the workforce could be covered by ``flexible'' arrangements such as temporary contracts, self-employment and part-time jobs in 10 years' time, according to a report published today by a leading consultancy.

Flexible working has increased a lot since employment-law deregulation started in the 1980s. The number of people employed in one of these ways will rise to 12.8 million in 10 years, or nearly half the workforce, says the report, by Business Strategies (BSL). This compares with 10.9 million last year.

It reflects the big advantages to employers of such arrangements. Firms can push the impact of a business downturn on to workers by ending contracts or cutting part-time hours. Flexible workers are also more likely to meet the costs of everything from their pension and sick pay to their car and training courses.

BSL predicts the spread of flexible arrangements will boost the growth of suitable financial services. These include mortgages that allow payment "holidays" - one of the demands for change in the housing market made by the Labour leader, Tony Blair, this week.

The growth of flexible work patterns will be driven by temporary work, the report says. It foresees 2.5 million people in different forms of short-term employment by 2005, a million more than last year. ``There are clearly very strong upward trends,'' said Richard Holt, the report's author.

But he expects self-employment and part-time work to continue to grow, although at slower rates than for the past decade. Self-employment is likely to rise from 3.3 million today to 3.6 million in 10 years. The number of part-timers, the biggest category of flexible arrangement, will rise from 6.1 million to 6.7 million.

Most part-timers and temporary workers are women, but most of those in self-employment are men. Men also account for the bulk of the new growth in temporary jobs.

This growth is taking place mainly in service industries such as services contracted out from the public sector, telecommunications and financial services. The report says: ``One reason why temporary employment has spread further and faster in some sectors than others is unionisation.''

However, it adds that the phenomenon is spreading rapidly in some areas of manufacturing, especially engineering and the metals, minerals and chemicals sector. It cites as an example Compaq's manufacturing plant at Erskine, which employs a core workforce of 1,500 and 700 on contracts.