Analyzing the Impact of Contingent Youth Employment on Organizational Reputation

In recent times, employers have continuously introduced positive initiatives to create employment opportunities for young workers. These encompass a wide range of options, including but not limited to internships, apprenticeships, graduate programs, contractor roles, and volunteer expatriation missions to support global business expansion. While these efforts reflect a commitment to fostering diversity and inclusion within their workplaces, some employers have also started falling short in providing stable employment to their young workforce, relying too heavily on insecure contingent work arrangements after their initial purpose has been fulfilled. This analysis will explore the advantages and disadvantages of offering this type of employment and discuss strategies to mitigate the risk of developing an unfavorable employer reputation in the eyes of younger generations of workers.

The Trend of Contingent Work in Youth

In a labor market context, it is crucial to consider the age range that could indicate classification within the youth employment category. The International Labour Organization (2023) states that individuals between the ages of 15 and 29 generally fall into this category, although some variations of this age range may be acceptable depending on the cultural context and country concerned.

A study on the incidence of temporary forms of work shows that young workers have been consistently linked to insecure contingent employment more than any other age group (Eichhorst et al., 2018), and after the COVID-19 pandemic commenced, its usage grew to an even greater extent. As employers dealt with a worldwide crisis and unpredictable labor needs, their priority shifted toward gaining flexibility in workforce management (Lombardo, 2023). During this period, the rate of young workers engaged in contingent labor remained high (Eurostat, 2023), and in some countries such as Italy and Spain, alternative employment rates exceeded the regional average (Soru, 2023). 

The Pros and Cons of Contingent Employment for Youth

Many employers and employees can probably agree that there are several positive aspects to this form of employment, including easy labor market entry, skills development, flexibility, and career exploration. Contingent work can also be a good way for individuals to gain experience and manage the transition from education to work more efficiently. 

However, it unfortunately often becomes a trap into insecure employment that keeps young workers, including the highly skilled, from obtaining secure contracts (Matsaganis et al., 2014). Researchers have also found that youth contingent work is increasingly failing to serve its purpose as a bridge toward job stability (Matsaganis et al., 2014; Silva, 2023). Beyond these concerning findings, there are many adverse consequences linked to job insecurity and contingent work that employers and employees should be aware of.

Defining Job Insecurity

There is a vast amount of existing literature on insecure employment, which makes constructing a definition complex. A logical way to understand the concept is from a dual perspective, meaning job insecurity from both an individual and an organizational point of view. 

From an individual perspective, many agree that the concept can reflect a worker’s subjective or objective perceived threat of becoming unemployed. Numerous studies review the negative consequences of job insecurity (Castro-Castañeda et al., 2023; Chirumbolo et al., 2017; McGuinness et al., 2012; Selenko et al., 2017; Sora et al., 2010). These are some of the frequently mentioned repercussions:

• Negative alterations in physical health.
• Negative alterations in mental health.
• Reduced job satisfaction.
• Increased intentions to quit a job.

From an organizational level, job insecurity can be perceived as a form of survival and competitiveness through mergers and acquisitions, restructuring, early retirement, and downsizing (Sora et al., 2023). Various studies provide insights into the negative consequences of offering insecure employment (Castro-Castañeda et al., 2023; Selenko et al., 2017), some of which include the following: 

• An increase in poor work attitudes of employees.
• Lower levels of organizational trust.
• A negative effect on organizational performance.
• Lower levels of organizational productivity. 

As outlined above, job insecurity causes various undesirable consequences for all parties involved. While it may offer some short-term gains, the unjustified use of this practice can result in significant harm. 

Defining Contingent Employment

Defining contingent work is also a complex process, especially considering the multiple forms of labor arrangements that exist. In this category, we find freelancers, independent professionals, agency workers, on-call workers, and more (Retkowsky et al., 2022). As mentioned, some trending work arrangements for youth nowadays include internships, apprenticeships, graduate programs, contractor roles, and volunteer expatriation missions. Despite these variations, one element remains the same throughout contingent work literature: these individuals have short-term, temporary, and/or discontinued jobs (Haunschild, 2004; Rutledge et al., 2019; Soru, 2023).

Does Insecure Contingent Employment Cause Reputational Harm?

Organizational reputation can be defined as the collective judgment of an employer’s overall character concerning its employees, finances, and stakeholder relationships, reflecting Human Resources Management philosophies, policies, and practices. It relates to equal employment, compensation, benefits, employee relations, recruitment, personnel selection, and career opportunities (Hannon & Milkovich, 1995). Many studies cover the link between a negative reputation and issues related to work environments, leadership, performance, change, and risk management (Friedman, 2009; Kewell, 2006).

Employer branding is an HRM practice that aims to represent organizations as workplaces and is closely tied to their reputations (Rana et al, 2021). The form in which others view a work organization is a factor that could define an individual’s decision to join and/or remain with an employer (Helm, 2011). Through employer branding practices, employers usually make great efforts to build good reputations, but they also possess negative blindspots that could be influenced by following employment trends without thoroughly evaluating their downside.

Researchers acknowledge that employees are partially responsible for the negative reputation of their employers. Interestingly, despite being one of the most crucial stakeholders, they are frequently overlooked in research that aims to understand this link (Devine, 2021). Despite this, when considering the recent findings related to the misuse of insecure contingent work for youth and its unfavorable side effects, it becomes clear that it can significantly damage an employer’s reputation.

Mitigating the Risk of Reputational Damage

Considering the positive aspects of contingent work for young employees, its usage should continue to be encouraged, but only in suitable situations. When considering the appropriateness of extending contingent labor opportunities, employers should reflect on the specific context in which such missions are offered, as well as the personal characteristics, educational backgrounds, previous professional experiences, and motivations of young job seekers. Here are a few examples to illustrate this.

Internship & Apprenticeship Opportunities:

When mutual interest and benefits exist, such as in the case of work-study programs where a company sponsors academic pursuits with internship or apprenticeship opportunities, these assignments may be appropriate. 

Conversely, if a young worker has already achieved significant academic accomplishments and the reasoning behind offering a brief internship or apprenticeship contract over a stable one is unclear, this practice could be interpreted as an effort to sidestep investing in their professional and financial growth. It could also be perceived as an unethical cost-cutting strategy, especially if the roles demand too much from young workers with precarious contracts. Misusing these arrangements to fulfill the duties of full-time employees could trigger the development of a negative organizational reputation.

Recent Graduate Programs:

These programs offer valuable entry points into companies for recent graduates with little to no work experience. Even if they provide beneficial opportunities, understanding the ambitions of young candidates of different ages, educational backgrounds, and work experiences is essential. 

Individuals with different levels of educational achievements (high school, bachelor, master, doctoral, postdoctoral) will not view this form of contingent employment in the same light. Especially for older candidates with degrees equal or superior to a Masters and various years of accumulated work experience, demonstrating acknowledgment of the significant time and financial investments made in the development of their professional backgrounds is likely to result in a more positive perception of employers, mitigating the risks of reputational damage. In that sense, providing them with additional employment choices, including stable work, may be more appropriate.

Contracting Opportunities:

In line with the previously outlined forms of temporary employment, hiring young workers as contractors offers certain advantages. This approach enables them to acquire proficiency across diverse roles without committing to any in particular, which can assist them in understanding the path they wish to take in their professional lives. 

Nevertheless, employers should understand that contracting is not a substitute for stable employment. Workers could rightfully assume that a hiring entity is evading tax obligations, intentionally sidestepping the provision of social benefits, and targeting them based on age, which can result in a profoundly adverse employer reputation. It is crucial to emphasize that numerous jurisdictions explicitly forbid the incorrect classification of employees as independent contractors and that this practice may violate labor laws in several countries (Pedersini & Pallini, 2016; U.S. Department of Labor, 2022).

Volunteer Expatriation Programs: 

Employers should thoroughly evaluate young candidates’ personal and professional backgrounds when considering them for volunteer expatriation missions. These programs can benefit workers by enhancing their cultural competence and foreign language skills. If a candidate shows motivation to engage in a mission abroad and could genuinely benefit from this kind of experience, then it could be appropriate to extend such an opportunity.

On the other hand, when the motivation to offer young workers a volunteer expatriation mission relates to cost reductions in international business expansion, it is essential to carefully assess the potential reputational risks of moving forward with this kind of opportunity. Should a young individual already hold a track record of experiences abroad and exhibit proficiency in multiple languages, such an offer could be perceived as exploitative and might foster a perception of discriminatory practices based on age within organizations. In such cases, offering a genuine expatriation mission with an appropriate compensation and benefits package may be more suitable.

Strategic Recommendations for Contingent Youth Employment

This analysis has explored the connection between hiring young workers on a contingent basis and its impact on organizational reputation. Although this form of employment provides advantages for both parties, research indicates that the drawbacks may surpass them. Some recommendations for utilizing insecure contingent work include being aware of its documented negative consequences, refraining from abusively targeting young workers for such arrangements, and adhering to relevant labor laws. By doing so, employers will be able to protect their reputation and their organizations will be seen as ethically responsible, forward-thinking, and human-centric places to work.

About the Author

Rossina Gitto is the Founder and creative force behind The Humans of HR. She’s a Licensed Psychologist specialized in workplace dynamics and holds a Master’s Degree in International Human Resources Management from the University of Paris II Panthéon-Assas. Having lived, studied, and worked in 8 different countries across Europe, the Americas, and the Middle East, she brings a unique global perspective to People Management. She contributes, edits, and publishes diverse content across a broad spectrum of topics for The Humans of HR.

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