Fixed-term contracts can be beneficial to both employers and individuals due to the opportunities and flexibility they can offer. In Quarter 1 of 2020, as COVID-19 took hold of Europe, the economy and employment levels suffered significant shocks. As unemployment rose and job vacancies plummeted, fixed-term contracts have developed due to the opportunity and potential they create.  

In Quarter 2 of 2019, fixed-term employment was at a five-year low of 570,000. This data suggests that fixed-term contracts had been declining in number and popularity. However, from 2019 to 2020, fixed-term employment increased by 205,000 to a five-year high of 775,000 in Quarter 4 of 2020. This growth in fixed-term contracts suggests that the benefits of fixed-term employment fit perfectly with the uncertainty of COVID-19. 

HGV Driver - Talent shortage

Fixed-term contacts are a type of formal employment that ends on a particular date or the completion of a specific task. This can include seasonal employment, specialist employees and maternity cover. Temporary contracts of employment such as fixed-term are an important component of the labour market for several reasons.

Historically, fixed-term employment has led to decreasing enthusiasm for companies as employers and has been seen as less desirable than full-time employment. However, in 2020 the rise of fixed-term contracts suggests that the benefits of fixed-term employment can outweigh the uncertainty of unemployment in a global pandemic.

1. Flexibility


Fixed-term contracts allow for flexibility within labour markets and have allowed many businesses to stay afloat without the economic burden of an annual salary. The economic uncertainty of COVID-19 has increased redundancy due to the inflexibility of full-time employment, however, fixed-term employment offers businesses the flexibility of temporary staff and individuals the job security that comes with temporary employee regulations.

2. Opportunity


In 2020 there was a significant drop in job vacancies surrounding the UK March Lockdown. As a result of the COVID pandemic, opportunities became scarce as businesses closed and people began to work from home. Fixed-term contracts help individuals to integrate back into the workforce after unemployment, provide opportunities for networking, grant employee rights and protection, as well as provide certainty to both employers and individuals.

Chef Talent Shortage

3. Experience 


Temporary employment can often be described as a ‘stepping-stone’, this is due to the experience of employment that allows for the development of skills and confidence. Fixed-term contracts can allow individuals to progress their careers and increase their salaries with in-house experience in a phenomenon known as ‘Job Hopping’. 

The economic uncertainty of the COVID-19 pandemic has left individuals seeking employment, opportunity, experience, and job security. Comparatively, employers are unsure of the future and government decisions, seeking to fill the unpredictable gaps in supply and demand. Fixed-term employment offers short term stability to wait out the storm of COVID-19. 

Elizabeth Allen

Quantitative Reasearch Analyst, People Insights

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