Definition and Examples of Job Insecurity

Job insecurity occurs when a worker’s employment is less than stable—or the worker feels like it is. It’s the opposite of job security, when a worker has confidence that their continued employment is more or less guaranteed.

In some ways, it doesn’t really matter whether job insecurity is objective or subjective. The negative effects of job insecurity—stress, anxiety, and mental and physical health impacts—are real, regardless of whether job loss is imminent.

• Alternate name: insecure employment

One example of job insecurity would be working in an industry that hires seasonal workers. You may find it easy to land a job as a fulfillment center associate before the winter holidays, but lose your contract after the rush ends; or you may make good money as a swim instructor at a resort during the summer, but unless you work in a tropical location, the gig may come to an end at the close of the season.

Types of Job Insecurity

There are two main types of job insecurity: acute and chronic. For example, if you suspect you’re about to be laid off in the coming weeks, you are experiencing acute job insecurity. On the other hand, if your company is doing well and your boss seems fairly satisfied with your work, but there are no guarantees this will remain the status quo and your industry is prone to layoffs, you are experiencing chronic job insecurity.

If the latter type feels familiar, it’s because the majority of U.S. employees are working under those conditions. In 49 states and the District of Columbia, private-sector workers are considered to be employed at will unless covered by an employment contract that states otherwise.1 Only Montana requires employers to demonstrate “good cause” when terminating employees, and only after a mandatory probationary period.2 This means that in most states, workers can be released from their jobs at any time, for almost any reason, without notice or explanation. 

Even if you are employed at will, your company can’t fire you for a reason that’s considered discriminatory under federal or state employment law.

At the federal level, protected characteristics include sex, pregnancy, race, religion, national origin, genetic information, and age (40 and older). Your employer also can’t terminate you to retaliate against you for making a discrimination complaint.3

There is another type of job insecurity, which is loss of job status. For example, let’s say your company is restructuring. You retain your job but are transferred to another department or role—one that is less satisfying or less well-aligned with your goals. The new job may even pay less or offer fewer opportunities for advancement.

While not as financially stressful in the short term as losing your job, this kind of job insecurity can eat away at your job satisfaction and engagement.

How Job Insecurity Impacts Workers

Job insecurity can have severe negative effects on workers’ physical and mental health. Studies have shown a connection between job insecurity and heart disease, diabetes, ulcers, headaches, back pain, and insomnia. In addition, job-insecure workers were more likely to engage in unhealthy behaviors, such as smoking.4

Studies have shown that even the perception of job insecurity can be hazardous to workers’ health. Researchers attribute this to a lack of support and coping strategies. In other words, if you get laid off, you may have some idea what to do next—contact HR about the next steps, ask about any severance or training assistance, research unemployment benefits, etc. But if you only suspect your position is insecure, you may not know what your next step should be.

Job Security vs. Job Insecurity

Job security means being able to expect continued employment, generally at the same job or company. Some employers and positions offer unusual amounts of job security for the current work environment. These include union jobs, government jobs, and jobs covered under an employment contract or collective bargaining agreement.

Most other private-sector jobs are insecure to some extent, meaning they come with no guarantee of continued employment.

You may experience more job insecurity if you work in a job role or industry that’s in decline, or for a company that’s not doing well financially. Startups are potentially lucrative but highly insecure because many fail.

In addition, some company cultures are organized around short-term results instead of worker tenure. It’s not uncommon for very successful tech companies to have median employee tenures of only a year or two.6

There is also a growing segment of the workforce where job insecurity may be inevitable. Freelancers, contractors, and entrepreneurs may need to work by the project or on a limited basis with clients instead of employers. These self-employed workers don’t necessarily know where next week’s or month’s paychecks are coming from, and, depending on the amount of clients, may not have the flexibility to scale up or down their business as needed.

How To Handle Job Insecurity

Unless you have a government or union job, you will likely experience some level of job insecurity throughout your career. The best way to cope with it is to acknowledge that reality and plan accordingly. Here are some tips.

• Be loyal to yourself, not an employer: Even if you love your job, your team, and your company’s mission, recognize that very few U.S. workers stay at the same employer for many years. Keep your resume updated, your skills refreshed, and your eyes and ears open, both for job opportunities and for signs that a layoff may be imminent.
• Target more secure opportunities: Can’t live with the uncertainty? Pivot your career in a more secure direction. Look for jobs in government, union-backed industries, or at employers with a reputation for employee longevity.
• Research in-demand skills in your field: Add these skills to your toolbox. Having a hot skill or certification might not help you keep a job, but it will certainly help you find a new opportunity should you need or want one

Key Takeaways

• Job insecurity is a worker’s state of uncertainty—actual or perceived—about their continued employment.
• Most private-sector U.S. employees are employed at will, which means their employer can fire them for almost any reason or no reason at all, without notice.
• Job security is more common in union jobs, government jobs, and jobs that are otherwise covered by an employment contract.
• Ways to deal with job insecurity include being loyal to yourself and not the employer, targeting more secure opportunities, and researching and acquiring in-demand skills.