The narrative about work being increasingly unstable and insecure is unsurprising and seen in fluctuating unemployment rates in Southeast Asia. Unfortunately, it is often the employees who bear the risks of unstable work and job insecurity. 

Stemming from her doctoral research, which coincided with the “Great Recession (from 2007 to 2009),” Assistant Professor of Organisational Behaviour & Human Resources Nina Sirola realised that economic threats can be a source of trauma for both individuals and organisations. Helping both parties navigate such conditions more effectively is of tremendous social and economic value. In her research, she looked to understand how people and organisations can respond to economic adversity more effectively, cope with it with less stress, and continuously adapt. 

In this article, we explore Asst Prof Sirola’s research findings on how job insecurity might have additional overlooked systemic consequences, specifically how it disproportionately undermines the well-being of workers who come from relatively poorer families, regardless of their current financial situation.

An intro to job insecurity

Since the 1970s, work has become increasingly precarious due to several interrelated economic, political, and social changes. Precarious work is employment that, from the worker’s perspective, is uncertain, unpredictable, and risky. Usually, these arrangements come with the absence of job security, limited social benefits, and minimal worker protection. These types of jobs usually come in the form of temporary, part-time, or freelance positions where workers might not have regular hours, a steady income, or assurance of continued employment. This can leave individuals vulnerable to sudden job loss and financial instability, or the feeling of job insecurity.

Asst Prof Sirola defines job insecurity as the fear or risk of losing one's job without having a reliable alternative employment opportunity. According to her, It represents a state of uncertainty about the continuity of one's employment and the potential negative impact on financial stability and career prospects. “Job insecurity is like living in a house with a fragile foundation—while the house might stand firm for now, any shift could cause it to collapse, leaving the inhabitants scrambling for stability” Asst Prof Sirola illustrates.

The causes of precarious work and job insecurity

According to Asst Prof Sirola, many factors contribute to job insecurity. These factors together and separately create situations where job insecurity arises and thrives.

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“The cumulative effect of these factors is a labour market where employment is increasingly characterised by uncertainty, instability, and insecurity. Workers are expected to bear the risks associated with employment, such as income volatility and lack of benefits, rather than these risks being mitigated by businesses or government policies. This shift has fundamentally altered the nature of work, making precarious employment a common experience for many individuals.” says Asst Prof Sirola. “While precarious work poses significant challenges, it also offers flexibility, opportunities for skill development, and accessibility to a broader range of individuals. It can benefit businesses by providing a more adaptable workforce and reducing costs. However, it's crucial to balance these benefits with policies and protections to ensure that workers in precarious positions are not exploited and have access to fair wages and conditions.”

Building better well-being and performance at work

Asst Prof Sirola’s research shows that job insecurity doesn't affect everyone equally. Those who grew up in financially secure environments are better equipped to handle the stress, than those from less financially secure ones. This shows the importance of considering early-life conditions in addressing job insecurity and their implications for employee well-being and equality. 

Higher job loss risk means a higher chance that an individual may be laid off or terminated from their employment. For these individuals, the immediate implication of job loss risk is financial instability.  This can lead to difficulties in meeting daily expenses, paying bills, and maintaining a standard of living. This job loss risk also causes considerable psychological stress and anxiety which can lead to lower job satisfaction, reduced engagement at work, and decreased motivation. Concerns about job insecurity and loss can also contribute to mental health issues such as depression, anxiety, and emotional exhaustion, according to Asst Prof Sirola. 

Asst Prof Sirola believes that policymakers should implement strategies that reduce job insecurity. For instance, the promotion of legislation that protects workers from arbitrary layoffs and ensures more stable employment contracts. This would help mitigate the stress and uncertainty that job insecurity brings, improving the well-being and performance of workers, especially those from disadvantaged backgrounds.

Policymakers should also focus on enhancing social safety nets to support workers who face job loss risk. This might include unemployment benefits, retraining programmes, and mental health services that buffer against the negative impacts of job insecurity and help workers transition to new employment opportunities.

Creating initiatives that promote job stability and career advancement opportunities for low-income workers is also crucial. Since job insecurity has a more negative effect on those from low-income backgrounds, policies that incentivise companies to invest in employee development and provide clear pathways for career progression help workers from poorer backgrounds improve their job security and overall economic standing. “By addressing the root causes of job insecurity and providing robust support systems, policymakers can help break the cycle of poverty and create a more equitable and resilient workforce.” Says Asst Prof Sirola.

For example, in the United States, the Unemployment Insurance (UI) program offers temporary financial assistance to eligible unemployed workers. The programme was expanded significantly during the COVID-19 pandemic to enhance benefits and extend coverage to gig workers and freelancers. Germany also implemented something similar in the Kurzarbeit scheme. This allows companies to reduce employees' working hours rather than laying them off, with the government compensating a portion of the lost wages. This programme is credited with preserving jobs during unstable economic periods like the 2008 financial crisis and the COVID-19 pandemic. Finally, Singapore's SkillsFuture initiative is a national movement that helps citizens develop their skills throughout their lives. This includes credits for training courses, employer grants for workforce development, and sector-specific reskilling programmes to enhance employability and support career transitions.