A new jobs crisis is hitting Gen Z – the rise of the ‘forever temp’

What to do when you have to find people to complete a project, to fulfil a work order, or just keep things ticking over when the finance director has imposed an indefinite hiring freeze? Grab a temp. And then when their contract is up? Grab another.

That is where we are: temp Britain. Welcome. Companies here are increasingly hiring temporary workers instead of permanent staff because of low confidence in the economy and higher cost pressures, according to a report by consultant KPMG and the Recruitment & Employment Confederation. Temp billings – the revenue earned by recruitment companies for supplying temporary and contract workers – have shot up to their highest level for three years. Meanwhile, the number of permanent placements are tumbling.

The reasons for this troubling picture are well known: the war in the Middle East combined with the UK’s domestic political turbulence have combined to shatter confidence. It is a toxic mix at a time when the government has increased taxes on jobs, boosted the minimum wage, making it more expensive to hire, and legislated for day one employment protections, making it more risky.

It’s not as if there are a shortage of people looking for work, any work. Six months going? Sure. At least I’ll get a foot in the door and have money coming in. Three months? I’ll take it. Better than being berated by a job coach.

The report warns of “redundancies and a further drop in demand for workers” which inevitably drove “another rapid increase in labour supply”. The whip hand is now with the employers, who can increasingly dictate terms. Those terms are getting harsher.

All this helps to explain why the number of NEETs (young people not in education, employment or training) has hit a million and is poised to kick on from there).

They’re suddenly at the top of the political agenda. There are lots of people, former politicos, academics, assorted big mouths, opining on them, without ever having been at the sharp end or experienced the state’s lamentable failings. My family has – hence my cynicism when it comes to the likes of Alan Milburn or Pat McFadden or former M&S boss Marc Bolland and their ilk.

To its credit, the current M&S boss Stuart Machin over the weekend did something better than anything they’ve suggested. The retailer announced plans to create a new training scheme, aimed at 16- to 24-year olds. It will open up 1,000 places in the UK and Ireland over the next 18 months. They will be paid, too (as they should be).

But 1,000 places is still a drop in the ocean when set against the sheer number of NEETs. It will take more than M&S going down this route to have a meaningful impact on the numbers. Too many employers are hiding in their bunkers.

NEETs are perceived as risky hires, and now employers can pick and choose, they get passed over unless they catch lightning in a bottle and find a place on something like the M&S scheme. Or maybe find a job as a temp. The same, sadly, is true of disabled people, whom the government has also said it wants to “help” find work. The perception of them as risky is misguided because is if you’re disabled, believe me, you tend to work damn hard to justify yourself if, when, you find work.

Is the future, then, one of Gen Z moving from temp position to temp position? The direction of travel is clear, and it is quite hard to see it improving in the short to medium term. While all this is going on, AI is torching entry level jobs, making a bad situation much, much worse.

A career is meant to be a ladder on which people make the climb towards professionalisation, self-worth and stability. Keep them trapped as ‘forever temps’ and you are hobbling a generation who are already being buffeted by the heavy weather of unaffordable housing and rising living costs.

This has the look of a perfect storm. How do you fix it, or at least create a shelter? Brutally, the answer is to make it cheaper and easier to hire young people. So a lower minimum wage, while letting employers jettison those who don’t work out without the fear of a tribunal.

This isn’t a happy situation. It is not one I find at all palatable, having long advocated for higher wages and more rights at work. Needless to say, it is in direct opposition to current government policy. It takes a similar view to the one I previously held.

But here is the unpleasant truth: sometimes when you’re sick, you have to take hard medicine that hurts your body to cure your problem. Economic disease is no different. Whether Labour is willing to face up to that is an open question. I’m not sure it is.

Hence what I said at the beginning: Welcome to temp Britain.