Everything about Job Security totally explained
Job security is the probability or perception that an individual will keep his or her
job (role).
Definition
A job that offers a high level of job security indicates that a person in such a job would have a small chance of becoming
unemployed whereas a job with low job security suggests that a person in such a job has a high
probability of becoming unemployed.
Factors affecting job security include:
Typical Trends
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.
Job security is dependent on the state of a country's
economy and prevailing
business conditions and it has been found that people have more job security in times of
economic expansion and less in times of a
recession. Unemployment rate is a good indicator of job security and the state of the economy and is tracked by
economists,
government officials, and
banks.
Geopolitical Differences
Job security also has different meanings according to the 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).
In the
United States however, which has more flexible labor laws, it refers more to a worker's sense of having
stability of maintaining a job resulting from the possession of special skills,
seniority, though there are also
protections provided in many collective agreements against unanticipated technical changes.
Job Security in the United States
Job security in the United States depends almost entirely upon the economy and business conditions than in most countries because of capitalism and minimal government intervention to business. Job security in the United States can vary a lot since the supply and demand for jobs depends on economy. If the economy is good, companies make more profits 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 in 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.
(External Link
) The New York Times attributes a large portion of this to blue collar and professional men refusing to work in jobs that they're
overqualified for or don't provide adequate benefits in contrast to their previous jobs.
(External Link) The increase in Americans starting their own business is partially a reaction to decreased job security.
Immigration and Outsourcing
Orthodontists, dentists, surgeons, physicians, and trial lawyers are some of the few professions that truly have a sense of job security. Their work can't be outsourced and illegal immigrants don't put downward pressure on their wages (unlike construction workers and meatpackers).
Job security 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've 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
appeal) 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 practise 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's 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've 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's 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 but 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's 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've 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 isn't 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 so-called
TUPE (Transfer of Undertakings (Protection of Employment)) regulations so the years spent working for the old company would count when calculating redundancy payments, etc.
Industry Differences
Computer Software
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.
Measuring Job Security
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
demographics, 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
(External Link), a pioneer in consumer risk analytics.
Job Security Index
Job Security Index is a measure of the nation’s job security level or
unemployment risk, by location, occupation, and industry. Launched in February 2004 and published monthly since January 2006, Scorelogix Job Security Index
(External Link) 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.
References to job security
The movie Office Space makes a mention of job security when layoffs start occurring in the company that the characters work for.Further Information
Get more info on 'Job Security'.
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