ben

Last month parliament approved new laws requiring UK-listed companies to publish their CEO to worker ‘pay ratio.’

The disclosures will show what the CEO makes in comparison to the workers at the 75^th, median and 25^th percentile of the pay distribution of the company’s UK employees (i.e. those in the top quarter, in the middle and in the bottom quarter of earners in their company). These comparators have been chosen because companies are already required to calculate them for their gender pay gap reporting obligations. Therefore, the pay ratio reporting ought not to represent a significant additional reporting burden.

A similar reporting requirement has already proved controversial in the US, where 12 S&P 500 companies have reported that their CEO earns more than 1,000 times their median employee. At toy manufacturer Mattel, the ratio was nearly 5000:1.

Ratios in the US are likely to be much higher, owing to the fact that CEO pay packages are much higher in America and the reporting requirements cover the company’s global workforce, rather than just the domestic employees as in the UK. Nonetheless, once the disclosures begin to appear in UK companies annual reports in 2020, they are likely to be of considerable media and public interest. Currently, a FTSE 100 CEO is paid roughly 160 times the average full time UK worker, compared to around 60 times in the late 1990s. Very high pay for top executives and other leading professions including finance, law and consultancy has made the UK one of the most unequal countries in Western Europe. The share of total UK incomes going to the richest 1% of earners has gone from around 6% at the start of the 1980s to the most recent estimate of around 14% according to the World Inequality Database, an international academic initiative. Similarly, the share going to the top 0.1% has risen to nearly 6% from under 3% in 1990.

Inevitably, the first pay ratio disclosures will be sensationalised to highlight individual executives and companies with the widest pay ratio. Critics have seized on this as evidence that the reporting requirements are flawed and will result in the retail and catering industry being traduced (companies in these sectors are likely to have very high pay ratios, because of their large number of low-paid staff) while investment banks get off lightly. However, these criticisms are misplaced.

Most comparisons will be made with companies in other sectors, and even where they are made across corporate Britain as a whole, are likely to provoke a useful debate about pay and working lives. The gender pay reporting sparked an ongoing discussion about, why it is more difficult for women to reach top positions, how this differs across industries and how individual companies have overcome these challenges to enable more women to fulfil their potential. Similarly, ratios can show us the scale of pay inequalities and encourage people to question what it is that causes the gap between those at the top and everyone else, what are the consequences of this gap and what measures could we implement to close it  (in relation to education and skills; improved corporate governance; or workplace voice, for example). Many companies are now taking action to address their gender pay gap – pay ratio reporting will create further pressure to reduce the gap between their highest and lowest earners.

The figures will provide ammunition for trade unions and anti-poverty campaigners, for example. It is currently very easy for executives to suggest that they would like to offer a pay rise for their lowest-paid workers, but the company cannot afford it. When public pay ratios show the difference between what those at the bottom are getting compared to the top earner or top quarter of earners, it becomes a lot more uncomfortable for the Chief Executive to justify to their workers or to public opinion.

Of course, it is not the case that pay ratio disclosure will solve all the problems associated with top pay and inequality in Britain with one stroke of a pen. Multiple problems remain with the UK’s corporate governance system, which concentrates power and influence in the hands of disengaged shareholders while giving workers little say in the running of their companies. Similarly, Directors’ duties in company law elevate the interests of shareholders above all other stakeholder constituencies, meaning that boards are discouraged from running their businesses in a way that accords with the interests of wider society.

However, better transparency over companies’ pay practices is certainly to be welcomed. To achieve a fair pay culture across the UK with full public confidence, we need a clear understanding of how pay is distributed and why. These new requirements are a helpful step in that direction.

Luke Hildyard is Director of the High Pay Centre

Fifty years ago, the sowing machinists at the Ford plant in Dagenham went on strike to demand equal pay for work of equal value. Their stand led two years later to the introduction of the Equal Pay Act, which made it illegal to discriminate between men and women in pay and conditions.

But half a century on, the UK is still scarred by a stubbornly persistent gender pay gap. Hourly pay for women is – on average – 18.4% lower than for men. Part of this gap is due to women being more likely to work in part time roles, which tend to be lower paid, but the pay gap between men and women working full time still stands at 9.1%. While the pay gap is closing, it is closing too slowly. If the current rate of progress continued, it would take another forty years to eliminate the gender pay gap.

In order to accelerate progress in closing the gender pay gap, the Government recently introduced compulsory gender pay reporting. Under the measures, employers with 250 or more employees have to report annually on their gender pay gap – the difference in average pay between men and women at their organisation. IPPR’s analysis of the first wave of data found that four out of five large employers had a gender pay gap, and one in four had a pay gap of 20% or more. 

The Government hoped that – by increasing transparency on the gender pay gap at the firm level – the regulations would focus employer attention on the gap, and stimulate further action to narrow it.

It is of course early days, and it will be a few years before we can tell if the reporting regulations have contributed to a closing of the gap. But the early signs are very positive.

First, compliance with the regulations has been impressive. 85% of employers reported by the deadline, and the Government Equalities Office have just announced that they have reached 100% compliance, with all eligible employers having now reported. Second, the regulations have really raise the profile of the gender pay gap and pushed the issue up the agenda. The pay gap reporting website received hundreds of thousands of visits and the data provoked a deluge of media attention. This was reflected within organisations too; we’ve come across a number of examples of the regulations prompting board-level conversations about gender pay for the very first time. Third, the regulations seem to have succeeded in stimulating employers both to look in detail at the causes of their gender pay gap, and to think about what else they can do to close it.

In many organisations, this has prompted significant employee involvement in the issue of gender equality. Most employers have reported their pay gap to their workforce, with many doing in-depth communication and consultation, both on what the gap is, what causes it, and what can be done to address it.  

Following the success of the regulations, we should consider how pay transparency in other areas could help contribute to narrowing inequalities. The Government have already announced plans to require large listed firms to report on the pay ratio between their chief exec and the average worker, and they are looking at similar pay reporting regulations on the ethnicity pay gap too.

While pay transparency can play an important role, we should also recognise that it has its limits. Transparency on the gender pay gap can help stimulate employer action, but it won’t address the deeper underlying structural drivers of inequality, from occupational segregation and the undervaluing of women-dominated roles, to the motherhood pay penalty. So Government will have to do more to address these. But transparency seems to be having the desired impact, and it can be a powerful tool in driving action.

 

Joe Dromey is a Senior Research Fellow at IPPR

IPPR are currently conducting research on the impact of the gender pay reporting regulations, and on the potential for wider pay transparency. We are really keen to hear from employers on how the regulations have impacted their organisation, so if you have five minutes, please fill out our short survey.

On 18 May this year, David Sturt and Todd Nordstrom, (researchers, consultants and authors from the O.C. Tanner Institute), posed a number of interesting questions about two important issues for UK employers; employee engagement and employee experience. One of the problems concerning employee engagement, they argued, is the way employers “often overlook the perception of work through the employee’s eyes. As leaders, we’re all trying to manage employees into adopting our workplace culture instead of us adapting to theirs.” I was immediately struck by the lack of middle ground in this and, although this might not be the intention, the message seemed to be that an organisation’s ideas, culture, work, values and results should be a solely bottom-up concept.

They continue this theme by stating that the phrases, “employee engagement” and “employee experience” cannot be used interchangeably because the former is a completely top-down consideration while the latter is completely bottom-up. This does not have to be the case in my experience.  

The two-way employee engagement relationship is based on organisations fully informing their staff – particularly about the dilemmas they face when making decisions – and staff, in return, contributing their ideas based on a sound knowledge of the business with the skills required to present a business case rather than a wish-list. In Sturt and Nordstrom’s vision of the leadership adapting to employees’ workplace culture, an organisation’s ideas, culture, work, values and results would likely be based on an uniformed wish-list. In my view, that would only succeed in disengaging managers and staff alike. For managers, the disengagement would stem from being unable to grant the staff wishes and, for the staff, frustration would arise at management’s apparent lack of listening skills.    

Sturt and Nordstrum write, “employee engagement fanatics might argue that they’re trying to listen to the voices—the thoughts, ideas, desires, and emotions of their people too. And, we don’t disagree with that statement. But, herein lies the simple, but huge, difference between employee engagement and employee experience.” That difference, they state, is that “employee engagement asks the question, here’s what we did. How happy are you?” As a self-confessed employee engagement fanatic, I believe achieving a high level of employee engagement is based on a more complex analysis than asking people how happy they are.

The links between an informed employee voice and higher levels of employee engagement have been established since the MacLeod Report was published in 2009. Since then, this Bulletin has given many examples of sophisticated employee representative structures that are focussed on creating the informed employee voice to get the best ideas out of people. Yet, the tendency is still for organisations to react solely to the disengaged as if there is nothing to learn from those who seem to be enjoying their jobs and are able to put their own issues into the wider organisational perspective. Often a poor engagement score on an employee survey will generate a debate on why the 25% are disengaged rather than the equally important analysis of why 75% seem fine.

Three solutions are proposed in answer to the question posed in the Sturt and Nordstrom article, “how do you become an employee experience-focused company or leader?” These starting points are:

1. “Pay attention to reality. Your culture (team or organization) is a product of the shared beliefs and values of your employees. Watch them. Listen to them. Try harder to understand them rather why they’re not engaging in the leadership’s idea of what the culture should be.”

In this reality, engagement is all about understanding “why they’re [employees are] not engaging”. In my view it is worth ensuring the already engaged remain engaged rather than becoming disengaged because that is the only way they can get their voices heard. It is as important to listen to engaged employees as it is to hear from the disengaged.

2. “Let their path happen. If employees are sneaking through the back door but your policy suggests they enter through the front door, find out why, and change the policy. This is just an example, but you get the point. Our job is to look for their natural flow. Forcing employees into a culture that doesn’t work for them will definitely lead to disengagement. Of course, this doesn’t mean employees get to do whatever they want. It just means you’re being flexible enough to allow greater success.”

I agree that forcing employees into a culture that does not work for them is likely to lead to disengagement but, it is equally the case that an open and factual explanation of why “pathways” within that culture have to exist can reduce disengagement considerably. Whilst Sturt and Nordstom acknowledge that “of course, this doesn’t mean employees get to do whatever they want” they fail to highlight the importance to employee engagement of having confident line managers who are able to state their case and hold the difficult conversations. Many managers admit they struggle to convince some staff that they cannot “get to do whatever they want” – the disengaged are often the most unrealistic in their expectations.

3. “Tell lots of stories. While it’s true that we’re huge fans of appreciation, we’re also huge fans of storytelling as a tool to fuel, shape, and transform culture.” Also, “encourage effort, reward results, and celebrate careers by telling grand stories about them, and their achievements.”

It is true that storytelling is powerful – in fact, the IPA bases much of its training around it – but the first building block to engaging employees is the organisation’s strategic narrative and that is what is often missing when organisations see engagement scores move in the wrong direction. Strategic narrative is important because it not only proves that decisions are not knee-jerk, it also given employees a clearer line of sight between the organisation’s strategy and what they do on a day to day basis. In turn, this helps employees to gain a greater perspective on issues that would otherwise eat away at them and start affecting their own performance. If employees are unaware of what is really going on and what makes their organisation tick, employee experience will continue to be a bad one and managers will be forever dealing with problems that are out of proportion to their actual impact.  

 

Derek Luckhurst is Training and Development Director at the IPA

When we talk of unions many people may tend to think of collective bargaining and joint consultative committees. And when we talk of big change at work we tend to think of industrial revolutions (many commentators argue we are in the midst of the fourth one). But unions today are influencing working life in much more diverse ways; and this is because the changes at work we face are so wide-ranging and fast moving, both for the organisations and the people.

Take technological change. Acas and the IPA have recently worked together on looking at the impact that the ‘fourth industrial revolution’ is having and will continue to have on the workplace. The research shows that there are particular challenges to be faced around:

• the erosion of job autonomy due to planning and decision-making being taken away from the front-line
• negative impacts on employee well-being as a result of job intensification and social isolation
• ethical concerns about how we programme algorithms to eliminate unconscious bias.

I was struck in the research project how unions so often played a part in the background in tackling some of these knotty issues – whether it be at Jaguar Land Rover in addressing automation on the line, or introducing iPads into a district nurse setting.

Many of the challenges new technology bring are to do with the permanently ‘on’ mind-set that is developing towards work and the drive towards integration between home and work life and private and professional worlds. Acas has always placed great store by the authoritative Workplace Employment Relations Surveys. So I was pleased to see a timely analysis of the 2011 survey by NIESR (Bryson and Forth, 2017). Just looking at the discrete area of work life balance, their analysis found that union strength is associated with:

• better work-life practices at work
• lower levels of job-related anxiety, particularly among women
• lower likelihood of employees working long hours.

But change comes in many guises and we may be in the midst of a cultural as well as an industrial revolution. Acas held an event recently to discuss how to tackle sexual harassment at work. It was clear from the lively debate that a new sets of values were needed to change the unacceptable behaviours that have become normalised in some workplaces. It was heartening to hear from employers at the event who spoke of the value of union engagement in addressing this very emotive issue. I noted that they referred to their engagement with the trade unions on the matter as working in ‘partnership’.

The notion of partnership working between managers and unions isn’t new. It was a subject of considerable discussion in the early 2000s. Did formal partnership agreements involve a trade-off between negotiation and consultation rights? And how did agreements impact on general cooperative working and trust building?

Whatever the labelling, the core features of managers and unions working in partnership today include:

• managers recognising (and demonstrating) the value of voice
• putting trust at the heart of all relationships
• doing the small things well – like sharing agendas, creating communication channels that work for managers and unions, and investing in training for reps and managers in working together
• not shying away from the big change issues that need to be faced together (indeed, the kind of changes I have identified above).

 

The Acas Council is a good example of what can be achieved by this kind of joint working. We would not be able to produce balanced views on evolving workplaces issues and give practical, impartial guidance and support if it weren’t for the consensus reached by a Council made up of union, business and independent members. When people with very different perspectives and values are working for a common cause, it means that what matters most is the bigger picture.

We have a tall order ahead of us. I’ve spoken about change in working practices and behaviours as if the traditional employment relationship was here to stay. The 9-5, working for one employer in one place of work model may still be the norm for most people but it is fraying at the edges. Much has rightly been made of how dramatic technological change may affect those on the fringes most. It is certainly true that those on atypical contracts and in low-paid, low-skilled work could do without another reason to feel insecure. I know that unions are working hard to improve representation in those sectors characterised by the self-employed and workers on zero-hours and temporary contracts.

Two heads have to be better than one. Better the chance of addressing these questions if we have a cooperative relationship between managers, employees and their representative unions. These must be built on a commitment to voice and genuine engagement.

Sir Brendan Barber,

Acas Chair

Work-life balance supports provided by employers, often known as flexible working arrangements, include flexitime, job sharing, moving from full-tine to part-time working, compressing working hours, home working, working only during school term and paid leave to care for dependents in an emergency. Such practices are thought to enable employees to better juggle the demands of care and domestic responsibilities with the demands of work, through reducing workloads, interruptions to work, lowered commuting times, and better prioritization of work and time management.

Our latest research shows, however, that these are not the reasons why work-life balance supports improve well-being. Rather, they do so by firstly increasing employees’ job autonomy and secondly by enhancing their perception that their managers are supportive.

Work–life balance supports may increase autonomy in a number of ways. In order to accommodate employees’ use of such supports, managers may design the work so employees have more discretion over how they prioritize tasks or the methods of fulfilling them. Supports typically give employees a greater control over their time and this may make employees more conscious of time and the need to use it effectively. This may in itself create a sense of increased autonomy, of being more in charge of their lives, and having the energy and time to develop their work roles and having more ‘thinking time’. As is most pronounced in home-working, employees may also have less contact with their supervisors and this may have often quite subtle effects on employees’ sense of autonomy. For example, as employees on flexitime may not regularly arrive at work at the same time as their supervisor they are not reminded first thing every day of his/her controlling presence. 

There are two main reasons why using work–life balance supports may strengthen employees’ perceptions that their employer is fair and cares for them. First, managers whose subordinates or peers use work–life balance supports may be more inclined to allow or develop informal arrangements with their staff to aid the integration of work and non-work obligations and cope with emergencies, as work–life balance supports act as a signal to managers that the organization values helping workers to cope with such obligations. Second, work–life balance supports also have a symbolic effect on all employees, signalling that their employer cares for them and that management is supportive of them, but this tends to be greater amongst those that use the supports. Through the use of work–life balance supports, the symbolic effect becomes less of a substitute for real knowledge of the employer’s intentions and more a concrete appreciation of management’s commitment. It gives greater credence to judgements about whether the employer is returning the employees’ commitment and hence adhering to their part of the psychological contract.

These factors have a direct impact on well-being but also have an indirect effect through reducing the extent to which work interferes with family and other non-work activities. The increase in job autonomy may enable employees to work more effectively – for example, they can solve problems when they occur and without having to refer to a supervisor –  and this means they may not bring unsolved problems home or be stressed by them. 

In contrast, the use of work–life supports actually increased job demands, although this did not affect employees’ well-being. Our results, however, show that we should not undervalue these supports on the grounds that the demands on employees are unchanged or may, as in this study, even increase. The implication of the findings for employers is that work–life balance supports should be applied where appropriate. They are a readily implementable means by which an employer can support – and be seen to be supportive of – employees’ needs, and improve the support and job autonomy they experience.

Stephen Wood is Professor of Management at University of Leicester School of Business.

The research is reported in S. Wood, K. Daniels, and C. Ogbonnaya, Work-Nonwork Supports, Job Control, Work-Nonwork Conflict, and Well-Being. International Journal of Human Resource Management. DOI: 10.1080/09585192.2017.1423102

 Further information is available from Professor Stephen Wood, University of Leicester, School of Business [email protected] or 07717377185

Diversity in the workplace

We no longer have to make the case that promoting and supporting diversity in the workplace is an extremely important aspect of people management and, therefore, critical to establishing good work. The vast majority of managers recognise that diversity is all about valuing everyone in an organisation as an individual. It is also accepted by most that, to gain the benefits of a diverse workforce it is critical to have an inclusive environment where everyone feels able to participate and achieve their potential. Although we no longer have to make that case, it is interesting to assess whether a shared understanding exists about what we have all signed-up for.

Unconscious bias

Based on several experiences in recent training sessions, particularly where unconscious bias has been the central topic of discussion, it has been argued that the very word “diversity” can unintentionally help to create the mind-set that separates certain people from others in their own minds. As one representatives stated, “surely it’s not about supporting diversity, it’s about supporting inclusivity.” The point was that “these are slightly different things – diversity, the word, shouldn’t cause problems by establishing the idea of outside groups but it does because people who might not regard themselves as being in any way diverse but regard themselves as normal feel left out of the conversation or feel they cannot contribute to it. The word inclusivity, avoids that happening”. The diverse group attending the training unanimously agreed with this observation.   

This question of social identity theory (perceived membership in a relevant social group) is not new   but this interpretation does pose an interesting challenge – are we taking the definition of words too literally or are we inadvertently creating the barrier we are all trying to avoid? UK legislation covering age, disability, race, religion, gender and sexual orientation among others has been successful in setting minimum standards for inclusion but there is a powerful argument that a truly effective inclusion strategy has to go beyond legal compliance. Its core purpose must be designed to add material value to an organisation by contributing to employee well-being and engagement.

Inclusivity

If inclusivity does not become business as usual and is set up as one “initiative” running parallel to, or cutting across others, there is a danger of some people feeling excluded. Research has shown that organisations who do not foster a truly inclusive culture run a serious risk of lower levels of employee engagement (which produces a loss of £26 billion per year in terms of GDP), lower levels of productivity, problems around recruitment, problems around promotion and problems sharing learning and development resources.

This becomes more important when trying to overcome the gender pay gap. Unconscious bias and the resulting stereotyping and the similarity attraction effect have contributed significantly to the problems that are being uncovered by legislation that is forcing organisations to publish data pertaining to this. The pay gap is not the same as equal pay. Equal pay – that men and women doing the same job should be paid the same – has been a legal requirement for 47 years. Under the Equal Pay Act 1970, and more recently, the Equality Act 2010, it is unlawful to pay people unequally because they are a man or a woman. This applies to all employers, no matter how small.

Gender Pay Gap

However, a company might have a gender pay gap if a majority of men are in top jobs, despite paying male and female employees the same amount for similar roles. The Fawcett Society, a group which campaigns for equality, has stated that caring responsibilities can play a big part. As women often care for young children or elderly relatives, they are more likely to work in part-time roles, which are often lower paid or have fewer opportunities for progression.

Discrimination is another cause of the gender pay gap. The Equality and Human Rights Commission (ECHR) has previously found that one in nine new mothers were either dismissed, made redundant or treated so poorly they felt they had to leave their job. This can create a gap in experience, leading to lower wages when women return to work. My own experience as a trade union representative in the 1990’s was one of frustration in this regard. Two female colleagues had worked their way to middle management positions and were on course for progression to senior positions. Both took maternity leave and returned to work in general administration positions where they both remained for several years. At no point were they considered for promotion back to the positions they had held; instead they were treated as if their maternity leave had caused them to forget the skills and knowledge they had developed prior to pregnancy.

The frustration was that this was not a sinister or conscious exclusion – it was, as one senior manager said at the time, that “women coming back from maternity is always in the too difficult to deal with box”. As such, it is hardly surprising that men tend to take up the majority of the most senior roles at a company, which are the highest paid. Many deserve to be in that position but, if the “too difficult to deal with” attitude remains, it will be a long time before the gender pay gap closes and a truly inclusive culture is achieved.        

Contact us for more information.

Choose a job you love, and you will never have to work a day in your life. (Confucius)

 

As the above quote illustrates, in an ideal world, employees should work in jobs that make them happy. In this context, organisational research has shown how managers can redesign the jobs of employees through top-down processes. Specifically, when employees perceive to have larger amounts of autonomy, identity, variety, significance, and feedback in their jobs, they tend to enjoy their jobs more and perform better. However, we also know that idiosyncratic needs of employees in regard to how their work should be designed are often not considered in a top-down job design approach, preventing employees from executing a job they love. In job design, management simply cannot cater to all needs and one size does not fit all. Instead, our research shows that that to meet their own individual needs, employees may take it upon themselves to change their own jobs under their own initiative to increase their meaningfulness of their own job – they engage in job crafting. In particular, our research shows that employees often think about and focus on the following aspects of their jobs as they start to initiate changes:

 

• Their core work tasks – job crafters show initiative in changing the nature of their own work tasks, by increasing or reducing the number and difficulty of tasks they work on. For example, sales assistant might themselves show initiative in aiming to be given greater responsibility in dealing with customers, or in taking on a more complex project.

 

• The social relationships with others at work – job crafters often, independent of their formal requirements in the job, also change who they spend time with at work, which networks to forge and people to spend more vs. less time with. For example, a teacher might choose to enhance the meaningfulness of his/her job by learning more about their students’ background, and by forging more trustful relationships with their colleagues.

 

• The skills they use at work – here, job crafters focus on specific skills they want to hone in their job, or they choose to branch out to become a more general expert in their job. For example, a consultant might choose to take on new projects that broaden his/her experience in different industries, or to stay more focused on becoming an expert in a particular type of industry/client.

 

• The way they think about their work and their organization, overall – finally, job crafters may simply change the way they think about the role of their work, so this form represents a more cognitive change to one’s job. For example, a hospital cleaner may start to think of themselves as being part of the medical team in caring for patients’ well-being, rather than as a contractor who cleans surfaces.

 

Our research shows across different occupations in the UK that employees of all walks are likely to engage in job crafting at some point in their jobs. Importantly, whichever area employees focus on as they become job crafters has important implications for the way they perform at work: Interestingly, our research suggests that cognitive crafting – so simply thinking about one’s role at work and in the organization in a different way, has overall very positive links to enhancing employees’ own job satisfaction, as well as seems to spur performance at work, too. In contrast, the effects of behavioural job crafting, of changing one’s own tasks, skills and relationships at work, may be beneficial in some organizational circumstances, however, it may backfire in others. – In turn, while employees likely intuitively become job crafters in their work, we recommend that management needs to try and understand employees’ job crafting in order to help guide such efforts and promote the effectiveness of such efforts.

 

In sum, management needs to rethink its role: to motivate employees and improve performance, it may be important to take on an overall facilitator role to enable and guide employees’ active job crafting efforts in organizationally desirable ways. As employees are likely to become job crafters intuitively, and because more generic job design likely does not entirely fit idiosyncratic needs of employees, rather than trying to set in stone employees’ pre-determined jobs, especially if the work environment is dynamic and organisational demands are changing rapidly, management may be well advised to allow employees the flexibility to become job crafters in their own right, to foster motivation and performance.

 

Bindl, U.K., Unsworth, K, and Gibson, C. (2018). Job Crafting Revisited: How needs and moods influence active changes at work. Working paper, LSE.

 

 

 

 

Working with one of our clients who are involving their trade unions in early discussions about the potential effects of new workplace technologies on their business, led me to ask myself if this is a typical scenario in UK businesses? Firstly, are staff and trade union representatives typically sufficiently prepared to engage in high-level, strategic discussions about the connections between the introduction of new workplace technologies and employment relations?  Even if they are, are businesses likely to invite them to contribute to the discussions and at what stage in the organisation’s thinking?

The IPA research report titled: “Mind over Machines” examined the connection between the introduction of new technologies and employment relations, and identified the following ways in which in which new technology will affect employees in the future and, therefore, what all employee representatives will need to think about:

Work intensity or difficulty. Will technology will make employees’ working lives easier or, will it mean greater work intensification?  How can employee representatives highlight ways of avoiding the pitfall of intensification as new technologies are rolled-out.

Cyber Security.    It has been estimated that disengaged employees are responsible for 40% of UK cyber-crime – employee representatives will need to make an important contribution to business stategy in establishing appropriate cyber security processes and making sure employees are fully training in and engaged with them.

Worker autonomy. If new technologies are being used to increase monitoring and control of employees, representatives will need to consider how this might affect employee engagement in organisations that may only be thinking of the bottom line cost savings.

Employee health and wellbeing. Whilst robots may be used more to do the dangerous or physically exerting tasks, some new technologies may increase stress levels where the line between home-life and work becomes blurred.  Employee representatives will need to be aware of and able to communicate to senior leaders if stress levels increase and be part of finding a solutions.

Ability to implement new technology. Good employee relations can be the key to successful introduction of new technologies – the communication of a clear plan, objectives and options will be critical if people are to be convinced that their organisation is not introducing technology for technology’s sake. Employee representatives have an important role to play in effective implementation.

Re-skilling and training the workforce. Successful organisations rely on both formal training and informal peer-to-peer learning but the latter requires autonomy and engagement; two of the factors that could be diminished by the new technologies.

These are all serious challenges that all workplace representatives must rise to in order to contribute to discussions at a strategic level about the future structure of work.  New technologies bring with them the likelihood of significant changes to the workplace and the conversation needs to start well in advance of detailed proposals.   As a result workplace representatives need to be well informed, prepared, skilled and aware of the implications of new technologies, or Industry 4.0,  for their organisations.

For the trades unions, the challenge will be whether the core purpose of a trade union needs to evolve? How a trade union will recruit and serve new and existing members in these changing circumstances now becomes critical to address. Before this can be done, trade unions need to consider who they we be recruiting and what those people will expect from them. It is hard to see the traditional security of the “insurance policy” attracting much interest the in highly individually-minded workers who will need to be convinced that trade unions will be a positive force for their progression and engagement in an ever changing world of work.

Perhaps the biggest challenge for trade unions will be how to develop the flexibility and pragmatism required to meet these challenges.  Can  current decision-making structures within trade unions adapt to keep up with the changing workplace, while maintaining their democratic core, particularly as change will be implemented at an ever-quickening pace? The pressure will be intense.

And yet, in IPA’s work with organisations facing these issues, I do regularly  see staff and trade union representatives who are fully equipped, trained and ready to take on such challenges, as well as some who still take an ideological rather than a pragmatic view. If UK organisations are to make a success of Industry 4.0 it is essential that employees and employers work together to develop our future workplaces.

Derek Luckhurst, IPA Training & Development Director

On 8th February, IPA will be launching our report on Good Work, to coincide with the government’s response to the Taylor Review. This publication draws together 16 expert perspectives on what good work means, why it matters and how to bring it about. The introduction and summary of the report are previewed below. The report will be launched at a special event on 8th February – details here.

Introduction

We open this report with a simple question: is our current world of employment ‘working well’ for the UK’s 32 million workers? Certainly the number of jobs available has increased consistently over recent years and current low unemployment levels are to be welcomed. But increasingly attention is being turned to the quality of that work, not just the quantity of it.

In the 21^st century, we recognise that it is not enough for a job to simply provide us with a source of income. Workers deserve jobs that also give them a reason to look forward to going to work in the morning, or at least not to actively dread it. Work is a huge and important component of everyday life for the majority of people for the majority of their existence. It is therefore obvious that working well is a vital ingredient for living well. If we want good lives, we need good work.

The Prime Minister, Theresa May, accurately summed up the importance of good work at the launch of Matthew Taylor’s Review of Modern Working Practices last year:

“The nature of employment is central both to our national economic success, but also to the lives we all lead. From the end of our childhoods until the years of retirement, if we don’t win the National Lottery jackpot, the vast majority of us will expect to devote at least half of our waking hours, on most days of the week, to work. A good job can be a genuine vocation, providing intellectual and personal fulfilment, as well as economic security. With good work can come dignity and a sense of self-worth. It can promote good mental and physical health, and emotional well-being.”

Of course, the converse is sadly also all too true. Despite the genuine success of recent years in increasing the number of workers in employment, for too many of those workers in the UK, work can often be unfulfilling, insecure and poorly paid. Rather than enjoying dignity and self-worth, some workers are unvalued and ignored at best, or at worst endure degrading or bullying treatment throughout the day. Just as good work can promote good mental and physical health, so bad work can lead to poor mental and physical health.

The pursuit of good work, however, is not solely about a moral quest to improve the quality of life of working men and women – though it certainly is that. But it also has real consequences for employers themselves, and for wider society. This report is not the first to make the link between work quality and productivity, nor the connection to the ability of firms to recruit and retain skilled staff, though both of those are explored over the following pages. Likewise there is a huge need to restore confidence and trust in British businesses after a number of recent scandals, something which a focus on good work can only help with.

But what is it that makes for a good job with a good employer? Is it possible to have a bad job with a good employer, or even a good job with a bad employer? And might something that seems like a good job to one worker look like a bad job for another?

The conclusions of the Matthew Taylor Review of Modern Working Practices last year made a major contribution to both addressing some of these questions, through its assessment of the foundations of quality work, but also in bringing attention to and stimulating a wider national debate into the subject of good work. The aim of this paper is to further that debate, with the inclusion of sixteen varied viewpoints from prominent individuals including academics, employers, trade unionists, policymakers and others.

All of the following chapters have their own unique and valuable points to make, about the definitions and measurements of good work, arguments for why it matters, and thoughts on how to bring it about. What they all have in common, however, is a common commitment to working towards the ambition outlined by Matthew Taylor and endorsed by the Prime Minister last year, of ensuring that in future “all work is fair and decent.”

 

Chapters

Jonny Gifford, Senior Advisor – Organisational Behaviour at CIPD opens the first chapter with a call to focus attention on measuring different aspects of good work and defining what we mean by the phrase. He outlines seven key dimensions of job quality, several of which are explored in more detail in the later chapters, notably meaningfulness (Chapter 4), pay, (Chapter 11), terms of employment (Chapter 13) and voice (Chapters 9 & 14).

Petra Wilton, Director of Strategy at CMI makes the case for a greater focus on management skills to address one of the underlying causes of a poor workplace experience. She points to the need to tackle the large proportion of ‘accidental managers’ in the UK who lack the training and ability necessary to foster positive working environments through building inclusive teams and restoring trust with the workforce.

Liz Banks, Director of Communications & Research at the REC writes about the importance of work quality in assisting with recruitment and retention of skilled staff and the need for employers to focus more on ensuring they advertise the good aspects of jobs to attract the talent they need. She also makes the point that temporary work can also be good work and outlines what is needed to make it happen.

Katie Bailey, Professor of Work and Employment at KCL discusses the concept of finding meaning in work. Drawing on her own research in this area, she explains how meaningfulness is created, why it is important and what organisations can do to foster it without trying to mandate or manipulate employees into a form of ‘existential labour’.

Neil Carberry, Managing Director of People & Infrastructure at the CBI talks about the importance of restoring trust in UK businesses through a renewed focus on the everyday experiences of the workforce. He makes a persuasive argument for why business leaders should take action and adopt a new long-term approach to managing, developing and engaging their people, or risk falling behind in a changing world.

Christina McAnea, Head of Health at UNISON describes the challenges facing the 1.5 million workers in the frontline adult care sector in the UK. Despite a strong sense of purpose and meaning in their work, pay and conditions are so poor for many workers in the sector that they could not be described as enjoying good work, and retention levels suffer as a result. Christina outlines an alternative approach based around UNISON’s ethical care charter, which may offer a better model for workers in this sector.

Sir Brendan Barber, Chair of Acas draws on 40 years of Acas insights into workplaces to build up a picture of what everyday good work looks like for employees and the key factors in enabling it. He points to the importance of clarity in the working relationship, having trusted procedures to address concerns, a healthy respect for work-life balance, voice, fair and transparent pay structures, a work environment that is conducive to both physical and mental wellbeing and a positive approach to diversity and inclusion.

Niall Ryan-Jones, Head of Employee Experience at Harrods writes from an employer’s perspective about the connections they have made between good work for their employees and good customer service. By adopting new approaches to their employees’ engagement and work experience based on their customer relationship management practices, they have seen major improvements to their turnover, absenteeism, sales and customer satisfaction ratings.

Janet Williamson, Senior policy officer at the TUC presents the case for employee voice and representation as one of the key pillars of what makes for a good job. As well as being valuable in its own right, individual and particularly collective voice and consultation also supports and enables many of the other aspects of good work such as higher wages, better work-life balance, better and safer working conditions, more skills and training and a healthier workplace culture with reduced bullying.

Dan Warne, Managing Director of Deliveroo UK discusses Deliveroo’s vision of what makes for good work in the on-demand economy. As well as the need for fair pay for hours worked, active engagement and a meaningful voice at work, this also involves finding the right approach to managing the trade-off between flexibility and security that characterises the sector.

Stefan Stern, Director of the High Pay Centre sets out the link between good pay and good work and explains how paying workers a good wage would benefit not only their wellbeing, but the success of their employers. He counters the argument that this also justifies current levels of executive pay in Britain and instead makes a powerful case for the need for greater fairness in pay levels across the board.

Dean Royles, Director of HR at Leeds Teaching Hospitals NHS Trust outlines the ways in which the technologies of the Fourth Industrial Revolution are reshaping work within the public sector and the need to make sure that they are being used to improve the quality of work rather than intensify work. He talks about the need for employers to role model good digital behaviours, seek the views of staff and focus on the sense of community, while embracing the opportunities offered by AI and other technologies.

Diane Gilhooley, Global Head of Employment and Pensions at Eversheds Sutherland lays out the various ways in which the legal environment supports and defines work and good work. She explains the law around employment status as it stands and proposals for reform under consideration, as well as the importance of clear contracts and rights in supporting good work. She also discusses the responsibility of employers to ensure good work not only for their own employees, but throughout their supply chains.

Stuart Innes, Vivo Principal Officer at Standard Life describes the way in which Standard Life has used its staff association, Vivo, to establish an effective system that provides employees with an informed, collective voice. He explains the key principles that underlie the success of their approach and how it helps to provide one of the key pillars needed for a good work experience.

Tony Danker and Jessica Northend, Chief Executive and Corporate Affairs Director of Be the Business together set out the scale and background of the productivity challenge that is facing the UK economy. They write about the case for stronger business leadership in the UK to address this and the need for both ‘will’ and ‘skill’ to embark on the journey towards better management, something which can lead to both better productivity for firms and better jobs for workers.

Juani Swart, Professor in Human Capital Management and David Cross, Research Associate at University of Bath School of Management conclude this report with a look towards the future and how changing technology might cause us to re-evaluate what we think about work. They ask the big questions about the future of work – might AI and automation replace human labour for many or most tasks? Will there be any obligation for humans to work at all? Or are there still aspects of human work that are worth valuing and preserving in such a world?

We hope that readers find this publication both interesting and enlightening. Most of all, however, we hope that the ideas and opinions from these sixteen valuable perspectives help to push forward the ongoing debate around good work in the UK, the case for why it matters, and how the vision of good work outlined in the Taylor Review can ultimately be realised. If that debate leads to genuine improvements in the daily working conditions of just some of the UK’s 32 million workers, that would be doing good work indeed.

Patrick Brione, IPA Head of Policy & Research

Nita Clarke OBE, IPA Director