Non-standard employment in Kazakhstan: scales, tendencies and social protection measures

Article is devoted to non-standard employment in Kazakhstan. In post-industrial economy of the developed countries three main forms of non-standard employment took roots, the scale of which is changing in different periods of economic development. At the same time the forms themselves are characterized by stability, but the structure of the types of employment entering these forms changes a little, reflecting the features and fundamental properties of the leading economic way. The different types of non-standard employment presenting the possibilities of increase in income and the standard of living of the population, having arisen during the transformational period, have rather wide area of distribution in economy of PostSoviet countries and Kazakhstan. Main types of non-standard employment in modern economy are temporary, incomplete and overemployment of the population. The factors operating in post-industrial economy both on the party of labor demand, and on the party of the offer defined sufficient number of options of a deviation from the standard schedule of which it is possible to carry to the most mass: temporary employment, part-time employment and self-employment.

Since the early 1970s, the monitoring of the population employment in the developed countries has registered the growth of flexible employment forms that have been actively introduced in enterprises and organizations in the form of a part-time work (shortened working day); the use of home-based work, job on call, special working hours and other forms.

In postindustrial economy of developed countries, three main forms of non-standard employment are firmly rooted, the scope of which varies in different periods of economic development. At the same time, the forms are characterized by stability, but the structure of employment types which are included in these forms varies somewhat, reflecting the features and fundamental properties of leading economic structure [1].

The factors operating in postindustrial economy, both for labor force demand and supply, determined a sufficient number of options for deviations from the standard schedule, the most widespread of which include temporary employment, part-time employment and self-employment. While the first two types are non-standard employments for employees, the latter is allocated to a special employment status that differs from the «hired employee» status by a number of exact criteria [2; 89, 90].

The purpose of our research is to assess the scope and dynamics of non-standard employment in Kazakhstan to develop recommendations for enhancing the social protection of these groups.

The research methods were statistical methods of structural and dynamic analysis.

Various types of non-standard employment that provide opportunities for raising the income and living standards of population had originated in the transformational period and are rather widely spread in the economy of post-Soviet countries and Kazakhstan [3].

The main types of non-standard employment in the modern economy are temporary, part-time and overemployment of population.

As we mentioned in the first chapter of research, temporary employment or fixed-term contracts are widely distributed in global economy. Such contracts allow the employer to:

  • hire an employee on probation and assess his capabilities;
  • take into account the requirements of market conditions due to changing situation in the market place and reduce the wage expenditures;
  • hire an employee for a certain scope of work;
  • hire an employee for the required period in the season;
  • hire an employee to execute one-time instruction.

If you look at the trends in 2013–2017 (data is not comparable with earlier years due to changes in the calculation methodology), the agreement permanence generally grows which indicates a stable economic development.

In 2013, permanent employment contracts dominated in all sectors: agriculture – 85.4 %; construction – 89.9 %; service sector – 96.2 %; industry – 98.2 % (Table 1).

Table 1

Sectoral structure of employment agreements by types in 2017/2013, %

Economy sectors

Permanent employment agreement

Fixed-term employment agreement

Certain scope of work

Casual work

Seasonal work

Total

96.5/94.8

2.0/3.1

1.2/1.6

0.1/0.3

0.2/0.3

Agriculture

86.5/85.4

6.8/7.6

5.4/5.4

0.3/0.2

1.1/1.3

Industry

98.7/98.2

0.9/1.2

0.3/0.4

0.0/0.3

0.0/0.0

Construction

91.2/89.9

3.3/5.4

3.9/3.1

0.2/0.5

1.5/1.1

Services

97.6/96.2

1.6/2.4

0.7/0.9

0.1/0.3

0.1/0.1

Note. Prepared based on source [4].

The second in the importance of agreement in agriculture is for a certain scope of work — 5.4 %; in industry — fixed-term agreements — 1.2 %; in construction – fixed-term agreements and agreements for a certain scope of work — 5.4 % and 3.1 %, respectively; in service sector — fixed-term agreement — 2.4 %. Actually, fixed-term agreement which was used most often in industry, construction, and services was the most in-demand in 2013. An agreement for a certain scope of work was the most in-demand agreement in agriculture.

In 2017, the share of employees employed under permanent employment agreements in aggregated sectors of economy increased everywhere. The above shares in the industry were as follows:

  • agriculture — 86.5 %;
  • construction — 91.2 %;
  • service sector — 97.6 %;
  • industry — 98.7 %.

In agriculture, the most significant group of non-standard agreements are agreements for a certain work scope – 5.4 % and fixed-term employment agreements — 6.8 %.

In service sector the most significant share is fixed-term employment agreements — 1.6 %.

In construction, agreements for certain work scope amount to 3.9 %.

In industry the share of non-standard agreements is extremely insignificant; in aggregate they constitute 1.2 %. The sectoral structure of employment agreements is shown in Table 1.

As a whole, dynamics in economy allows to conclude that for the concerned period the economic growth was stable, as a result of which the share of employment concluded agreements on a permanent basis increased in the economy as a whole, and the shares of all concluded agreements in non-standard form decreased [5].

If we look at separate sectors, it is obvious that the four concerned aggregated sectors can be divided into two groups characterized by multidirectional trends.

In industry and service sector, the share of all types of non-standard agreements reduced, except for the share of agreements «for a certain work scope» in the service sector.

In agriculture and construction the trend is not so definite:

  1. In agriculture the shares of all types of non-standard employment agreements are the most significant in the country economy as a whole, while the share of casual work increased to 0.3 %.
  2. In construction, agreements for a certain work scope are more demanded among all types of nonstandard agreements — 3.9 % (the share increased, compared to 2013 from 3.1 %) and seasonal work — 1.5 % (the share increased by 0.4 %).

If you look through a prism of the employment agreement type, then among the variety of non-standard employment agreements there is a type of «fixed-term employment agreement», the share of which is maximum on average in the economy.

In the service sector there are also its certain types which for the period from 2013 to 2017 are characterized by a growth in the absolute number of non-standard agreements:

  • the share of «fixed-term» agreements increased in such activities as transport and warehousing, information and communication, financial activities, real estate operations, administrative and support services, public administration, education, public health care.
  • the share of agreements «for a certain work scope» increased in such activities as information and communication, financial activities, real estate operations, public administration, education, public health care, art, and other services.
  • the share of «casual work» agreements increased in the administrative services and services of art, recreation and entertainment.
  • the share of «seasonal work» agreements increased in public health care and services of art, recreation and entertainment.

Such data suggests that the service sector with its nature and flexible work schedules is generally more flexible and it is effective in applying various types of agreements based on the specifics of different activity types.

In 2017 the share of service sector increased in indefinite-term agreements, fixed-term agreements and agreements for a certain work scope, while it decreased in casual agreements. Since the latter type of agreements is the most unstable and socially unprotected, we can say that the agreement stability in the service sector has grown [6].

In contracts for a certain work scope, and especially in seasonal and casual contracts, the share of construction increased significantly.

In general, it can be concluded that the most significant change for 3 years in the employment agreement structure for major economic sectors is the increase in the construction share in agreements for fixed term, certain work scope, casual or seasonal work.

The next most common type of non-standard employment is employment with a deviation from standard working day duration for the following variants:

  • overemployment;
  • part-time employment (part-time contract);
  • under-employment (full-time contract, but actual employment has less duration).

Overemployment – working more than the normal number of working hours established by the laws, i.e. more than 40 working hours per week.

At the same time, in the existing system of statistical observations it is impossible to separate part-time employment and under-employment, which are distinguished by a fundamental reason: voluntarily or involuntarily.

At the same time, some conclusions can be drawn based on the following data on employment with a shortened working day (Fig. 1).

Along with the decrease in the number of employed people with a shortened working week, their distribution by groups with different working hours changed.

In 2013, the maximum number of employed people (338.6 thousand) was in the group with a duration of 26–30 hours (0.75 of the rate), and the group with a duration of 21 to 35 hours (761.9 people in total) was half of all employees with shortened working week (1458.3 people).

Actually it may be said that half workers was employed at 0.5 rate and more hours.

In 2017, the overall picture has changed: there are two peaks in the schedule: the maximum number of employees is at 0.5 rate and employees at 0.25 rate.

It can be concluded that the burden of part-time employees has decreased, which is one of the signs of a forthcoming crisis, when the number of part-time employees and their duration of working time are reduced and their services are primarily refused.

At the same time, the growth of over-employment indicates the desire of people to hold down their job via overtime work.

It should be noted that the share of employees with non-standard working day duration, including both part-time and over-employed workers, decreased during the period of 2013–2015, but in 2016 it increased to 32.3 % and in 2017 it is 32.9 % of all employed people (Table 2).

Table 2

Indicators of part-time and over-employment in Kazakhstan economy, 2013–2017

Indicator

2013

2014

2015

2016

2017

Total employed, thousand of people, including:

8301.6

8,507.1

8,570.6

8,510.1

8,623.8

men

4,250.4

4,375.9

4,389.4

4,389.3

4,446.0

women

4,051.3

4,131.2

4,181.3

4,120.7

4,177.8

Structure of employed group by gender, %:

 

men

51.2

51.4

51.2

51.6

51.6

women

48.8

48.6

48.8

48.4

48.4

Structure of group with non-standard working day duration by gender, %:

 

men

50.9

53.1

52.3

54.7

54.8

women

49.1

46.9

47.8

45.3

45.2

Number of over-employed, thousand of people (working day duration of 41 hours and more):

 

men

701.1

828.1

811.3

1146.7

1,218.7

women

457.9

551.8

585.8

777.1

849.9

Share of over-employed people in the group, %:

 

men

16.5

18.9

18.5

26.1

27.4

women

11.3

13.4

14.0

18.9

20.3

Number of part-time employees, thousand of people (working day duration of 41 hours and more):

 

men

630.3

499.1

388.9

357.8

335.8

women

828.1

622.0

511.0

470.9

430.7

Share of part-time employees in the group, %:

 

men

14.8

11.4

8.9

8.2

7.6

women

20.4

15.1

12.2

11.4

10.3

Share of employees with non-standard working day duration (part-time and over-employment), %

31.5

29.4

26.8

32.3

32.9

Note. Prepared based on source [8].

If we consider the structure of over-employment and part-time employment by gender, then we can draw the following conclusions.

Men prevail in the group with non-standard working day duration: while the ratio of men and women in the employed population in 2017 is 51.6 % and 48.4 %, then in the group with non-standard duration, the ratio clearly changes in favor of men: 54.8 % and 45.2 %.

In general, the share of part-time employees in the men's group decreased structurally by 7.2 % and in the women's group by 10.1 %. At the same time, part-time employment is more typical for women, in the group of which the share of those involved in this type of employment remains higher than in the men's group.

Figure 2 shows the structure of employees with non-standard working day duration by age groups for 2013-2017.

The age group distribution analysis shows that the mode of these two distributions coincides, i.e. both over-employment and part-time employment are most common in the age group of 25-34. This is typical both for 2010 and 2015. In line with the main direction of movement (reduction of part-time employment and growth of over-employment), this group remains the most active. Significant over-employment is typical for age groups of 35-54, and then there is a significant decline associated with natural causes of operational capability restriction.

The disadvantages of the current statistical survey include the fact that the reasons for overemployment, which may lie on the employee's side and on the employer's side, are not found out.

The following trends are observed in the structure of the over-employed population (Table 3).

Table 3 Characteristics of non-standard working day duration by status in the employment of Kazakhstan population in 2013–2017

Note. Prepared based on source [10].

Indicator

2013

2014

2015

2016

2017

Structural shift,

2017/2013

Employees, including those with a workweek duration, hour

 

36-40

78.3

77.2

78.4

72.6

69.5

-8.8

41 or more

16.1

19.0

18.7

24.6

25.9

9.8

less than 36

5.6

3.8

2.9

2.8

4.6

-1

Self-employed people, with a workweek duration, hour

 

36-40

47.7

55.9

61.0

53.9

54.8

7.1

41 or more

9.9

10.6

11.2

18.6

18.7

8.8

less than 36

42.4

33.6

27.8

27.5

26.5

-15.9

Increase in the share of over-employed workers as a whole over the period and decrease in the part-time employment is common for hired employees and self-employed workers. For self-employed people a defined trend of increasing the share of the group with normal working time in the period from 2013 to 2015 was manifested, it has changed to a decline in 2016, but in general for the period up to 2017 the structural shift remains positive.

For hired employees there was a trend to weaken the positions of the normal working day and a negative structural shift was recorded – 8.8 percentage points.

Over-employment is more evident among hired employees: in 2017 – 25.9 %, while among selfemployed workers – 18.7 %. High share of part-time employment is typical for self-employed workers: 26.5 % versus 4.6 % for hired employees. Self-employed workers dominate in numbers in groups with a less than normal working week, i.e. from 36 to 40 hours, and hired employees dominate in the groups with a normal duration and more than 41 hours (Fig. 3).

For a group with employment duration from 16 to 20 hours, the number of hired employees increased and equaled to the number of self-employed workers, i.e. approximately the same number of hired employees and self-employed workers are employed for 16-20 hours per week.

Compared with the previous years, this situation is a result of the beginning of the crisis, i.e. a reflection of the aforementioned fact that a significant number of employees in 2016 shifted to 0.25 rates due to a reduction in the work scope and working time, respectively. The increase in another group with a working time of 0.5 rate did not affect the structural diagram, because the number of self-employed workers with such time is so significant that it is several times higher than the number of hired employees.

It can be noted in more detail that:

  • In fixed-term agreements (permanent employment) the share of employees with standard working hours increased by 2 % and the share of over-employed workers whose work day duration was 41 hours or more increased by 10 %. As a result, on average for a period, the number of hours worked increased from 37 to 41 hours per 1 employed person.
  • In temporary agreements where the share of over-employed people previously was also the largest of all types – 70 %, there was the most significant increase in over-employment by 20 %, and all other options for working time decreased. On average for a period, the number of working hours increased from 38 to 42 hours per 1 employed person.
  • In certain work scope agreements over-employment increased by 20 %, while the average working day duration for the group increased from 37 to 41 hours.
  • In casual and seasonal employment the share of contracts with standard working day duration and over-employment increased. The average working day duration for a group of casual employees increased from 40 to 43 hours. At the same time it increased from 29 to 42 hours in seasonal employment.

Thus, the research of such types of non-standard employment in Kazakhstan as over-employment, parttime employment and temporary contracts allows to draw the following conclusions.

In recent years, temporary employment contracts are spreading in global economy, because employers use their opportunities for flexible HR management, personnel selection, reduction of labor costs during a

crisis. Kazakhstan economy in the period under review does not demonstrate crisis trends, and the share of permanent employment agreements has grown to 90 % or more in all major industries, except agriculture.

The most popular temporary agreement is a «fixed-term employment agreement» type; its share in the national economy is higher than all other options of a temporary agreement. If you look at the dynamics in individual sectors, then agriculture has the most significant share of all types of temporary employment agreements, while the share of fixed-term agreements increased and is now 6.8 %. In construction, temporary agreements are in demand and the most common forms are «certain work scope» – 3.9 % and «seasonal work» – 1.5 %.

In the service sector the most flexible are the following sectors: information and communications, financial activities, real estate operations. In the public administration sectors, public health care, the share of «fixed-term» and «certain work» agreements slightly increased. The share of seasonal work agreements also increased in public health care. The share of casual and seasonal work contracts increased in arts, recreation and entertainment services.

The most significant change in the sectoral structure for each type of temporary employment agreements for the period from 2015 to 2017 is the growth in the share of construction in all types of temporary contracts: fixed-term, certain work scope, casual and seasonal work.

Non-standard working day duration is present in three options: over-employment, part-time employment (part-time contract), under-employment (full-time contract, but actual employment has less duration) [12].

It should be noted that for 2013–2016 the share of the population that worked for a normal workweek of 36–40 hours increased by 2015 inclusive, while the share of part-time employees decreased by almost two times over the period. Over-employment increased by 10.3 % from 2013 to 2017.

In 2016, a reverse was observed, when the share of over-employed people grew by 6.5 % for one year, which corresponds to the pre-crisis situation and increased competition in the labor market, as well as to the desire of both business and workers to maintain the already achieved measure of income and well-being via excessive working hours.

Along with the reduction in the number of people working for a part-time week, the modal load values have changed. While in 2013 the maximum number of employees worked at 0.75 rate, in the distribution of 2017, there are already two peaks – 0.25 rate and 0.5 rate. It is obvious that with the deterioration of the economic situation within the dominant practice, part-time employees are primarily dismissed or reduced in working time.

In general, the share of employees with non-standard working day duration, including both part-time and over-employed workers, decreased during the period of 2013-2015, but in 2016 it increased to 32.3 %; in 2017 it is 32.9 % of all employed people.

The ratio of men and women in the employed population in 2017 was 51.6 % and 48.4 %. In the group with non-standard duration, the ratio clearly changes in favor of men: 54.8 % and 45.2 %, respectively.

Over-employment increased in both groups, both in absolute terms and in structure: it increased from

  1. % to 27.4 % for men, and from 11.3 % to 20.3 % for women. In fact, in the men's group, a little more than one quarter of workers are employed over normal working hours [13].

Both over-employment and part-time employment are most often observed in the age group of 25-34. In general, the highest shares of over-employed people are typical for 25-54 years old, and over-employment sharply decreases beyond these limits.

Over-employment is more evident among hired employees: in 2015 – 25.9 %, while among selfemployed workers – 18.7 %. High share of part-time employment is typical for self-employed people:

  1. % versus 4.6 % for hired employees.

In the structure of population working 36 hours per week or more, by types of economic activity, the main share is held by the population engaged in wholesale and retail trade (14 %), agriculture, forestry and fisheries (11 %), industry (12 %), education (10 %).

If we consider the structure of the population employed simultaneously by types of contract (perma- nent/temporary hired employment) and working time (standard/non-standard), we can reveal the following processes:

  • Standard working time dominates in permanent agreements (70 % or more) and certain work scope agreements (60–65 %);
  • Over-employment is the most significant for contractors with a fixed-term agreement (70 % or more);
  • In general, increase in over-employment during the period and especially in 2017 is typical for all types of contracts. Over-employment in 2017 reaches 30 % or more in all types of contracts [14].

As per the results of our research, we have developed proposals to enhance social protection of temporary and part-time employees.

An important protection mean for part-time employees may be measures that ensure a guaranteed minimum number of working hours and the establishment of a minimum amount of insurance payments for job losses. At present, these minimums are not specified in the Labor Code or other regulatory documents.

The minimum duration of workweek in countries worldwide ranges from 8 to 24 hours per week [14]. In view of the experience of developed countries and the current domestic experience of part-time employment, it is proposed to establish the lower limit at the level of 10 hours in Kazakhstan. Currently, the amount of social benefit in case of work loss for a part-time employee is more than 2 times lower than the subsistence minimum of KZT 10,519 against KZT 24,459 [15].

In order to prevent discrimination in social protection of part-time employees, it is proposed to accept social payments in case of a loss in the amount of the subsistence minimum.

In general, to ensure decent work for part-time employees the following is proposed:

We propose two priorities in the social protection of such employees:

  • Setting the minimum working time when concluding a part-time employment contract in the amount of 10 hours per week (Now there is no such restriction in the Labor Code).
  • Setting the minimum unemployment allowances for employees from compulsory social insurance system in the amount not less than the minimum wage for a minimum length of service of 6 months established by the RoK's laws for the current period.

 

References

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Year: 2019
City: Karaganda
Category: Economy