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Employee Engagement – A Union Perspective

Employee engagement has become an increasingly important aspect of the employment relations landscape over recent years. Within the trade union movement, we are acutely aware of the importance of making working people’s voices heard, and it is one of the fundamental reasons that people join a union. Employers, too, are identifying the link between employee engagement and improved productivity, as the evidence for this is very clear.

However, under the current government’s policies, the balance of power has shifted ever further away from the worker, and I believe that this has been to the detriment, not only of workers, but of the economy as a whole. With weakened redundancy consultation legislation, and the introduction of employment tribunal fees, the avenues for employees to seek a level playing field with their employer are being undermined from all directions. In order to combat this, it is more important than ever that we seek a joint commitment from businesses to open and transparent communication.

Many employers recognise that the best route to employee engagement is consultation and collective bargaining with an independent trade union. The breakthrough partnership agreement which Usdaw signed with Tesco in 1998 is the UK’s largest private sector trade union agreement, covering more than 300,000 staff in 3,000 stores across the UK.

At the core of the Tesco Partnership are staff forums, in which Usdaw plays an integral part. The forums are structured at store, regional and national level and are considered a vital part of the running of the business. Union representatives have been pivotal in helping the business to deal with the challenges that have come its way over the years, from sickness absence to scheduling, by being closely involved throughout the change process, and raising issues at the earliest opportunity via the forums. This gives Tesco invaluable shop floor feedback on its business strategy, and a joint approach to problem solving. The transparency of the structure, and the involvement of the union, lends legitimacy to the process, which helps staff to feel that they have a genuine voice at all levels.

One situation where worker voice is especially important is when there is a threat of redundancy. The consultation framework on redundancies has also been cut back, with the minimum consultation period reduced to 45 days for large-scale redundancies, and 30 days for smaller-scale redundancies. The government claimed that this would increase flexibility for businesses, but our experience as worker representatives tells us that the opposite is true. A meaningful consultation process has benefits for both employers and employees. This was very much in evidence during the recession, when there were many cases of co-operation between workers and employers, to reach a less drastic solution than mass cutbacks. Through the consultation process, unions were able to negotiate agreements that preserved jobs, even in the most difficult of circumstances.

By genuinely engaging with the consultative process, employers can have their eyes opened to new and alternative strategies to redundancy. A recent example of this was a food manufacturing company who announced that they needed to cut 140 jobs. Through early and meaningful discussions with Usdaw about alternatives, and an open minded approach, the company was able to reduce the number of job losses to 79, all of which were met through voluntary redundancies.

The Information and Consultation Regulations, and European Works Council structures, provide a general statutory framework for consultation. Unfortunately, the warm words and good intentions behind this framework have not translated into tangible results for most workplaces, and they have not been taken up with enthusiasm by a great deal of employers.

In an ideal world, employers would engage with unions voluntarily. However, this is not always the case. There is a legal solution which unions can seek through the statutory recognition process. However, unions have to achieve 10% membership before we can even hold a recognition ballot, and a 40% vote of the entire workforce in favour of union recognition – this is an extremely difficult hurdle to overcome if you are dealing with an anti-union employer, particularly in larger companies.

Ideally, we would always seek to avoid having to resort to legal redress, whether that’s tribunal cases or statutory recognition, because it is in everybody’s best interests to resolve issues by agreements wherever possible. However, there is still a perception in some quarters that the trade unions are simply an add-on to the consultative process, or indeed that we are not necessary at all, with staff forums filling the gap where union-led committees once operated. An employer who claims that workplace democracy can be achieved without full and independent trade union representation, or collective bargaining, is at best naïve, and at worst disingenuous.

Usdaw has sought recognition with a number of employers who tell us that they do not need unions because they have staff forums. However, our members repeatedly tell us that representatives in those forums, who are not backed by a union, cannot raise the issues that they want to have heard, for fear of it affecting their own status within the organisation – a valid concern, since they lack the legal protections afforded to trade union representatives. Some employers contend that well-trained and competent managers will engage effectively with workers on an individual basis, and that this is sufficient. This approach fails to recognise the crucial role that trade unions can play in helping businesses to get things right for their people at every level, from national, strategic planning, right down to local representation in the workplace.

With the current level of debate, there is a real opportunity to move forwards towards better employee engagement, in both the public and private sectors. The benefits of this for workers, employers and the economy are obvious. However, if there is to be genuine engagement and not simply lip service to the concept, we must be careful that strong, independent trade union representation is not circumvented in the process.

John Hannett is General Secretary of Usdaw

Are Employee Engagement Surveys leading us astray?

The vast majority of organizations now conduct employee surveys in some form or another and there is no doubt that their use has, for the most part, served organizations reasonably well. However we need to guard against falling into the ‘familiarity trap’, blindly accepting what surveys (and survey providers) are telling us and believing this to be the ultimate ‘truth’.  The reality is that traditional surveys only go so far and recent advances in the fields of neuroscience and behavioral psychology have shown systemic limitations in the approaches adopted by most organizations.

Typical approaches are fundamentally ‘Taylorist’ and whilst appropriate for stable, ordered and predictable environments are insufficiently nuanced to provide the insights which will drive the levels of engagement required for success in the complex and fluid environments that most organizations are facing. Indeed, in extreme cases, reliance on existing approaches may actually prevent organizations from improving engagement by engendering a false sense of security and comfort. If organizations are to take the next step on the engagement journey they need to better understand the ‘emotional’ aspects of engagement and recognize the limitations of approaching it from a predominantly ‘cognitive’ perspective. Specifically they need to consider that:

  1. Engagement is a complex set of psychological and emotional relationships between an individual and their work environment: we therefore need to measure these interactions and relationships in order to understand the psychological factors that drive the brain states and arousal levels necessary for high engagement; traditional ‘engagement measures’ fail to provide the required insights.
  2. Engagement is not a single state but a spectrum which ranges from highly engaged at one end to disaffected at the other extreme: we therefore need to assess where people are on this spectrum in order to really appreciate the true state of engagement within an organization. For example, an organization with 60% engagement and 40% disaffection is likely to be less productive than one with 40% engagement and 60% satisfaction despite the ‘headline figure’ indicating the opposite!
  3. Engagement changes over time and is sensitive to small changes in the work environment: we therefore need to measure the proportion of time that employees spend in different ‘engagement’ states rather than the percentage of employees who are allegedly engaged or otherwise; trying to infer the proportion of the workforce who are ‘engaged’ can often create a very misleading picture and fail to identify the circumstance whereby even highly motivated and committed employees become emotionally detached.
  4. People can be engaged with different aspects of their work environment and the drivers of engagement vary accordingly: we therefore need to understand what people are primarily engaged with (job, mission, colleagues, customers etc) and what matters most to them. Understanding the different ‘loci of engagement’ helps us to understand what energizes people and provides intrinsic motivation, and hence where we need to focus attention.  
  5. Future expectations can influence an individual’s state of engagement: most surveys focus on the here and now but we need to understand how people view the future and how this impacts on their current engagement state; uncertainty about the future can have a powerful effect on our brains and hence on engagement in the present. 
  6. Conversations and relationships lie at the heart of an engaging environment, not processes and systems: we therefore need to pay more attention to the interpersonal interactions that take place within an organization and focus less on formal processes, structures and systems ie we need to understand the ‘conversational landscape’ that exists.
  7. Managers are critical to the creation of an engaging work environment: this fact is well established but we need to put managers at the heart of the survey / measurement process and enable and empower them to ‘own’ the process and outcomes; all too often managers become involved late in the day and as a consequence see engagement as ‘someone else’s problem’ and fail to accept accountability for their role in the creation of an engaging work environment.
  8. Engagement does not equate to performance: this might appear to be a rather contentious assertion but the truth is that, whilst engagement is a prerequisite of sustained performance, on its own it is not sufficient. There is a need to channel engagement and align with the organization’s mission, purpose and operational priorities and to this end there is a pressing need to ensure that engagement principles and practices permeate an organization’s approach to performance management and appraisals and make them engaging experiences.

And finally: The process of measuring engagement itself needs to be engaging; diagnostics have a major role to play (if well designed) but greater emphasis needs to be placed on embedding a management led, ‘dialogue centered’ approach to engagement which is predominantly ‘relationship’  as opposed to ‘process’ orientated.  

Doug Crawford is the Managing Director of Cerus Consulting www.cerusconsulting.co.uk

News in Brief October 2014

Fall in UK unemployment rate but concern for record number of Britons in low-paid jobs

Recent figures from the Office of National Statistics show that for the first time since the recession of 2008, the number of unemployed people in the UK has fallen below two million. The rate of unemployment currently stands at 6 per cent, it’s lowest in six years. Esther McVey, the Employment minister, attributes the positive news to various schemes the government put in place to tackle unemployment in the UK. She believes that the “government’s long-term economic plan to help businesses create jobs and get people working again is proving successful”. According to data from ONS, the largest fall in unemployment has been seen with young people (18-24), down by over a quarter of a million since last year, followed by women, who have seen an increase of 46,000 available jobs in the three months to August. However, Frances O’Grady, TUC general secretary says that many jobs created since the recession are low-paid, casual and zero-hours.

Concerns remain for the number of Britons working in low paid jobs, and who earn less than two thirds of median hourly pay of £7.69 an hour. According Resolution Foundation, a non-partisan and award-winning think-tank, this number rose by 250,000 to 5.2m last year. Warren Ruhomon, senior market analyst at finspeads.com says that this poses a “significant area of concern” in the UK labour market as current prices of goods and services is more than the average wages of individuals. This sentiment was echoed amongst 80,000 to 90,000 members of TUC who protested earlier this month opposing the below-inflation 1 per cent pay offer from the government.

Additionally, The Resolution Foundation’s chief economist, Matthew Whittaker believes that a growing number of people in low-paid jobs also poses a serious problem for the government as “it fails to boost the tax take and raises the benefits bill for working people”. He believes that the way forward to tackle the issue of low-pay is by looking at the “kind of jobs being created in the market, the industries contributing to the growth and the ability of people to move from one job or sector to another”. He also agrees that raising the minimum wage could help the lowest paid workers but a “broader low-pay strategy is required in order to lift large numbers out of working poverty”.

NHS workers strike for the first time in 32 years

Thousands of NHS workers staged a four-hour strike in England for the first time in 32 years, protesting against the 1 per cent pay rise offered by the government. Workers want the pay rise to be applied uniformly across the board and not just for those who do not receive an incremental rise linked to performance (which averages about 3 per cent each year), but Ministers in England have argued that the government could not afford a uniform pay rise as it would lead to substantial pressure on trusts and job losses. Unions have described the offer as “appalling” and that their “staff are being treated “shoddily” by the government.

All this comes at a time when morale is low amongst NHS workers. An internal survey reported that more than 1,000 paramedics left their job in 2013/14, almost double the number during the same period two years earlier. Additionally, three-quarters of paramedics have considered leaving their job in the last 12 months due to “increased demand which meant workers were under pressure”. However, Jeremy Hunt, the Secretary of State for Health insists that a 1 per cent pay rise to people who are already getting an average of 3 per cent every year would mean laying off staff in the NHS, which under the given circumstances would not be the right thing to do.

Making work better

Next year will mark 40 years since Harold Wilson set up his Committee of Inquiry into Industrial Democracy under Lord Bullock. The Inquiry’s report was pushed into the long grass, but the issues that Bullock was considering – the role of unions and collective bargaining, employee involvement, worker directors and European works councils – are just as relevant today. 

The world of work of course has changed a lot since the time of Wilson’s ‘Social Contract’. Typing pools have given way to computers, mining and manufacturing have given way to call centres and retail parks, trade union membership has fallen from 12m to 6m, and half the workforce today have participated in higher education, up from 15% in the 1970s. These are major changes which have been accompanied by advancements in individual employment rights, progress on equalities, reductions in extreme low paid work and some improvements in the work-life balance.

However, as the recently published Smith Institute’s report by Ed Sweeney, ‘Making work better: an agenda for government’, makes clear, despite the improvements we still have big problems in the world of work. And, they are problems which worryingly affect the majority of employees (white collar and blue collar), such as insecurity and injustice at work. They are also problems which in part explain the UK’s poor (and worsening) productivity performance. The report calls for a step change in employment standards, fair pay and more effective employment protection and regulation as the route not just to making work better, but to improving productivity. It also argues that low paid, low skilled jobs in low value business is costing the taxpayer billions in in-work benefits and holding back the recovery. 

The research found that people at work are not only angry about the squeeze on earnings and widening wage inequality, but are worried about their job status and anxious about unfair treatment in the future. Levels of stress at work were also shown to have increased since the recession, especially in precarious workplaces and in the public sector where services had been outsourced.

The report highlights the frustration that employees have with the way they are managed and how their potential is unrecognised and their skills under-utilised.  Many employees feel ignored and excluded; the YouGov polling commissioned for the report found that 40% of those surveyed said that they have no real say in how their work is organised and are neither consulted or involved in management decisions. Nearly half said their job does not make full use of their skills and abilities.

The report argues that management in the UK has serious shortcomings and that the gap between the best and the rest in terms of good employment practices has widened.. Several witnesses quoted in the report also made the connection between poor management and the decline in the HR profession, which the evidence suggest is generally and increasingly undervalued within firms. The report calls for major action on the skills mismatch, improvements in management training and the widespread use of better management standards, such as the HSE management standards.

Whilst the report acknowledges that there are particularly capability and capacity problems with small firms, it quotes evidence from leading businessmen, like Sir George Cox, who claim that management’s obsession with short-termism militates against good employment. The report also quotes from the public forums the Smith Institute held around the country on making work better. At these events it was often said that middle management have a very “British” culture problem, are often out of touch and revert to an “us and them” mentality.

The concept of ‘workplace citizenship’ presented in the report chimed with people’s sense that they should not surrender their rights as citizens at the point at which they cross their employer’s threshold.  The evidence gathered in the report from a wide range of workplaces revealed that people are loyal to their employer and understand the constraints on their organisation, but see work as much more than a mere transaction. The report quotes employees speaking about how work gives them meaning; how productive work is achieved by colleagues working together; how success requires workers at all levels having a say over their work; and how fair rewards and security require a better balanced power relationships at work. It also identified a genuine desire by workers to be heard and be involved, both individually and collectively.

The right to voice at work of course is not new and has long been enshrined. Nor is the evidence new that voice and engagement are good for business. Yet, the report shows many employees feel they do not have the means to make use of their rights to voice. This inability to be heard was a common complaint. It was said that “voice alone can easily become like a radio with employers able to turn the volume down if they didn’t like what they heard”.

The report observes that the lack of voice is also impacting the structural problems around pay, such as the decoupling of wage and productivity growth which goes back to the early 1990s and wage inequality which goes back even further to the 1980s and the erosion of collectivism (notably in the private sector). The report argues that we have to move away from becoming an entrenched low pay economy and recommends a package of solutions: including a new power for Acas to promote collective bargaining, changes to the Low Pay Commission, greater pay transparency, living wage contracts in public procurement and a new settlement on public sector pay.

The report notes that union support for works councils is far from overwhelming. However, Part of the solution to the lack of voice could come through reform of the Information and Consultation of Employees (ICE) Regulations, notably by lowering the relatively high threshold to activate the legislation. ICE could then be used to increase (or introduce) collective voice in workplaces, provided it is resourced properly. There seems to be widespread union support for this, although the report states that where unions are recognised, employers should not be required to establish new, parallel structures for information and consultations.

The report interestingly identifies growing public and union support for workers on company boards and calls for regulations to require effective employee representation on the remuneration committees of public companies. It also flags up some signs of growing interest among corporate leaders for employee directors, which would have pleased Lord Bullock. Indeed, if Bullock was conducting his inquiry today in hindsight of all that the Sweeney report tells us about the world of work, maybe we would have had a very different (and possibly better) employment relations system!

Making work better: an agenda for government’ can be downloaded free from the Smith Institute website www.smith-institute.org.uk

What’s the value of business to the UK?

Trust in business has taken quite a knocking in recent years. The shock of the recession and a series of high profile scandals have undermined public confidence. In this article Andy Bagnall, Director of Campaigns at the CBI, explains why we need a Great Business Debate, and calls on people to get involved and have their say.                                                      

“Business doesn’t get it. It doesn’t care about us.” That’s a sentiment we’ve all seen expressed in the papers and on TV quite a lot over the last few years, and it’s one that companies of all shapes and sizes tell the CBI they are increasingly concerned about.

And for good reason. Earlier this year we asked YouGov to help us look into the public’s opinions on business, and what we found made pretty sobering reading.

  • Only 1/3 think the majority of British business behaves ethically
  • Only half think business makes a positive contribution to society
  • Two-thirds say that industry-specific scandals have impacted on their confidence in business as a whole

Perhaps we shouldn’t be surprised.  Business hasn’t always got things right, and in the years since the recession, the contribution it makes to all our lives has been brought into question. Negative stories about business continue to make the headlines at a time when public expectations are rising, and companies have not always responded quickly enough to address the concerns many people have.

This lack of public confidence represents a challenge for us all. Ultimately, our prosperity as a country is closely linked to the success of business. Up and down the country it is businesses that are generating wealth, supporting jobs, serving customers, and strengthening society. As Cardinal Vincent Nichols, Archbishop of Westminster said in a recent article: “A thriving business sector, with people finding fulfilment through productive work at the service of wider society is vitally important. Business and society need each other.”

But business cannot realise its full potential when people don’t see the value it creates for the UK. If businesses do not have the confidence of the people they employ and the trust of the customers they serve then they will not prosper in the long run.

The business community knows it must do more to engage with the on-going conversation about its role and contribution.  This means speaking up about the positive contribution it makes, addressing issues people are concerned about, and demonstrating that it is responding to the public mood.

That’s why the CBI has recently launched The Great Business Debate, focused on building public confidence in business. Through the campaign we are setting out the facts and combatting myths about what business does and the contribution it makes – there is a good story to tell about the contribution of business to the UK. But we are also looking to address some of the big issues people are talking about: how much tax business pays, what businesses are doing to support those employees on the lowest wages, and whether companies are doing enough for consumers.

As part of this debate we are actively seeking people’s views on business and where it needs to do more. At the same time we are providing an opportunity for companies to take part in a constructive conversation about what they do and how they do it. As readers of the IPA bulletin will know, employee engagement has an important role to play when it comes to building trust. That’s why we’re encouraging companies of all shapes and sizes to involve their employees in The Great Business Debate too.

Through doing this we want to develop a shared understanding over time about what more businesses can do to address people’s concerns and ultimately shift the dial when it comes to public confidence.

All of us our touched by business in some shape or form, and everyone has a stake in The Great Business Debate. From our perspective, the more people and organisations we have involved the better. As a starter for ten, I’d encourage you to take a look at our website, www.greatbusinessdebate.co.uk, and follow us on twitter @bizdebate. If you would like further information about the campaign you can get in touch with us directly at [email protected].

 

Andy Bagnall is Director of Campaigns at the CBI, explains why we need a Great Business Debate

News in Brief September 2014

 

Global Workforce Study shows key factors in retaining and engaging employees

 

The 2014 Global Workforce Study conducted by Towers Watson provides an insight into the attitudes and concerns of workers around the globe. This year’s study covers responses from over 32,000 employees across a range of industries in 26 markets.  The survey compares the views of employees and employers.

When considering joining a new organisation, employees gave the most importance to three basic factors – base pay, job security and career advancement opportunities – and employers recognised these factors in their responses.  However, when considering reasons to stay with an organisation, there are three key drivers cited by employees that didn’t even appear on the employers’ list of factors influencing retention; trust/confidence in senior leadership, job security, and length of commute.

According to the survey, there are low levels of highly engaged workers, and close to a quarter of employees are disengaged. Sustainable engagement requires strong leaders and managers. In companies where both leaders and managers are perceived by employees as effective, 72% of employees are highly engaged.

The survey found that labour activity has picked up since the last study in 2012,  with nearly half (48%) of employers reporting an increase in hiring and more than one-third (35%) indicating that staff turnover rose during the same period.  With an improved economic outlook, it is therefore critical for employers to develop a clear perspective on what it takes to attract, retain and engage their workers.

 

CBI survey shows staff want employers to share more about important issues

Employees trust their employer more than businesses in general, a survey by the Confederation of British Industry (CBI) has revealed.

The YouGov poll investigated the public’s confidence in business. The poll found that public confidence in business is generally low.  Only just over half (53 per cent) of the 2,080 respondents thought that business makes a positive contribution to society and more than half (55 per cent) believed that there was a greater expectation on business to ‘do the right thing’ than there was 10 years ago.

When questioned about the survey results, CBI deputy director-general Katja Hall said although confidence was generally low, people did trust their employers more than they trusted businesses in general.

The survey findings were shared at the launch of a new CBI campaign, ‘The Great Business Debate’, which is designed to help tackle the public’s lack of confidence in business. The campaign will consist of an online forum as well as a series of public-facing events. “I think part of this campaign has to be about business leaders talking much more to their employees and that’s one of the groups that we’re focusing on initially in the campaign,” said Hall. “And there is huge interest from employees to hear from their managers, to hear from their leaders about important issues”.

 

Democracy in the Workplace: an idea whose time has come?

In July’s IPA bulletin, the TUC General Secretary, Frances O’Grady, called for a new economic model, in which decent jobs, good wages and better work are explicit goals of public policy. After 35 years of neo-liberal economics, in which the market rules supreme and which has seen a growing divide between the super-rich and the rest, such a situation would be a radical departure for the UK.

But if this is our goal, how to bring it about? There is no single change that could recalibrate the UK’s capitalist model, but a great deal could be achieved if workers were given more say in how their companies are run. This concept is popular in countries such as Sweden, France and Germany, as the TUC showed in a recent publication, ‘Democracy in the Workplace’. Our report set out evidence from interviews with managers and trade unionists in companies such as Husqvarna and Saab in Sweden, AXA and Thales in France and Volkswagen and Siemens in Germany.

Those countries, like the UK, are covered by the EU’s Information and Consultation Directive, which became law in 2002. Unlike the UK, they have implemented this Directive in a way that makes a meaningful difference. In Sweden, information and consultation is available even if just one employee requests it. In France, works councils are established in law in companies with more than 50 people. In the UK, by contrast, 10 per cent of employees must request information and consultation, the so-called trigger mechanism, before a company is required to act. That hurdle is so high that, in many instances, it makes the notion of information and consultation impossible.

In 1980s Britain, the idea of “the right to manage” was often discussed, yet trade unionists in Sweden were surprised at the idea that managers would not wish to engage with their workforce. Why, they argued, would a company not wish to understand what its employees were thinking? In France, agreements reached by unions, even unions with low membership density, have legal force, but so-called ‘social elections’, involving all workers, act as a kind of referendum on agreements negotiated. In both countries, the point of the law is to bring the social partners to the table; once they are there, they are encouraged to develop arrangements that suit their particular workplace.

Participants, including employers, believe the system works well. David Tournadre, Senior Executive Vice President for Human Resources at Thales, the French transportation, defence and security company, told us: “What [the unions] want is to have access to the information. They want to be taken seriously … to make sure that the actual transformation of the organisation is actually done with the people dimension built into it”.

David Tournadre is quite right: when it comes to company reorganisation, ensuring that this takes account of the “people dimension” is central to the role of trade unions.

So what could the UK do to give such a voice to workers here? Most obviously, the ten per cent trigger mechanism to establish a works council must be scrapped. Workers must have the right to a works council, for information and consultation purposes, if a minimum of five employees request one, irrespective of the size of the company. Employers should be obliged to negotiate and agree information and consultation arrangements if requested to do so by a recognised trade union. Where agreement cannot be reached, standard provisions should apply.

In the medium term, it may be appropriate to require all companies to establish a works council once a specified number of workers are employed by the business, without the need for a workforce trigger. As the TUC says in the report: “A new universal requirement to consult could be a powerful lever shifting the UK towards a new democratic workplace culture”.

To make the new regulations effective, we may need tougher sanctions on employers who fail to comply. The right to a works council must be widely publicised, including through government advertising campaigns akin to those which inform workers of their right to a pension or their right to be paid the National Minimum Wage. Works council members must also be entitled to paid time off to attend training courses and, especially, courses in how to understand economic and financial information.

A basic constitution for a works council, stipulating how often it should meet, the range of issues it should discuss, how companies present their information, how far in advance it should be presented and what rights unions have to respond, should be developed by the Department for Business, Innovation and Skills, in discussion with the TUC and CBI. This should be the default constitution for all works councils. Deviations from this constitution should only be possible to improve its provisions, as in France, with the agreement of management and works council representatives.

Democracy in the workplace is an idea whose time has come. The TUC would be delighted to work with government and positive employers to help bring it about.

Tim Page is a Senior Policy Officer at the TUC. The IPA is undertaking a major research project looking back on the impact of the Information and Consultation of Employees Regulations 10 years on. Get in touch if you want to find out more.

 

 

 

Common rights in a single market? The EU and rights at work in the UK

The European Union has played a substantial role in shaping rights at work in the UK over the last thirty years. For Eurosceptics, this is a prime example of the EU over-stepping the mark and undermining national sovereignty. With our future within the European Union looking more uncertain than ever, it is an important time to re-examine the influence it has over employment regulation in the UK. Research released this week by the IPA aims to shed light on this question.

Many of the rights that working people take for granted originated not in the UK, but in Brussels. Take the Working Time Directive for example, which for the first time guaranteed employees a minimum amount of paid holiday. Before this, there was no legal requirement for employers to offer paid leave and one in four British employees had just fifteen days a year or fewer. Or take the TUPE regulations, introduced in response to EU Directives, which have protected many workers in the UK. EU Directives have strengthened rights for working parents, extended protection against discrimination and offered employees a greater voice at work. It was the EU that guaranteed equal rights for a-typical workers – the part-time, temporary and agency employees who are in fact increasingly typical in our modern labour market. Rights for information and consultation at work were introduced in response to EU legislation. These rights have sadly been under-used, but they could help strengthen employee voice at work.

The EU has given working people real, tangible rights. It has made the workplace a fairer place. Millions of British employees have reason to be grateful for the difference it has made.

But how does this employment regulation impact on our economy? Few issues incite the fury of Eurosceptics more than Brussels’ influence over British employment regulation. Those who would repatriate powers from the EU – or withdraw altogether – tend to argue that British businesses are over-burdened by red-tape from Brussels. Excessive and inappropriate regulations are enforced on us, so the argument goes, without our say or consent. With his characteristic rhetorical flourish, Boris Johnson recently decried the ‘back-breaking’ weight of EU employment regulation that is ‘helping to fur the arteries to the point of sclerosis.’

This aversion to EU employment regulation does seem to be shared by some employers. In a poll of their members, the CBI found that one in two said that EU attempts to create similar employment rights across the UK had impacted negatively on their business. The same number said that the UK leaving the EU would have a positive impact on their business in terms of the overall regulatory burden.

However, the argument that Britain is over-regulated just does not bear scrutiny. According both to the OECD and the World Economic Forum, the UK labour market remains one of the least regulated in the developed world. Decent employment rights are by no means incompatible with economic success – the dynamic and successful economies of Germany and Scandinavia are far more heavily regulated than ours. And although some employers voice concern about some regulations, the vast majority see it as a price worth paying for access to the single market. The same CBI poll that highlighted employer concerns over EU regulation also found that the vast majority (71 per cent) saw the EU as having a positive impact on their business.

There is a strong case for the EU retaining a role in influencing employment regulation in member states. The single market requires some common rules to ensure it operates efficiently. Coordination at the EU level is necessary in order to prevent competitive deregulation between member states and a race to the bottom which would harm working people. And the concept of a ‘Social Europe’ has played an important role in building and maintaining consent for the EU. As a poll conducted by the Fabian Society found, the majority of people support the role of the EU in establishing minimum levels of workplace rights.

Now more than ever, we need both to challenge some of the myths around ‘EU red tape’ and recognise the significant benefits that the EU has brought both to British businesses and to working people.

Nita Clarke is Director of the IPA. The research – ‘Common rights in a single market? The EU and rights at work in the UK’ is available to download here.

News in Brief July 2014

Report calls for the end of short-termist behaviour by UK leaders

In October 2013, the APPGM and CMI jointly founded the Commission on the Future of Management and Leadership. Launched this month, the Commission’s report – Management 2020: leadership to unlock long-term growth – brings together interviews and expert testimony from more than 60 individuals and organisations, including the IPA, plus data from a new CMI survey of over 2,000 business leaders and managers. The Commission concludes that short-sighted, short-termist behaviour is squeezing out the long-term, visionary approach needed to achieve real growth.

The report recommends that in order to ensure successful long-term leadership, organisations should review and focus on three critical areas: how they define their purpose; how they lead and develop their people and how they invest in their potential.  With data showing that the UK labour market needs 200,000 new managers a year, developing these new managers’ skills is a priority.

To support change in this area, CMI have developed the Management 2020 Benchmarking Tool, which is freely available from their website. The tool enables managers to benchmark their organisation against best practice.

 

Democracy in the workplace: strengthening information and consultation

The TUC have published new research this month arguing for a strengthening of the Information and Consultation of Employees (ICE) regulations in the UK.

In particular, it suggests that the rule requiring 10 per cent of employees to request information and consultation, the so-called trigger mechanism, should be replaced with a legal requirement for information and consultation procedures to be put in place if a minimum of five employees request them, or if requested by a trade union. In addition, the paper proposes that a basic constitution for works councils and their operation should be established in law.

In support of the case for strengthening the regulations, the TUC points out that information and consultation is one of a range of measures which, taken together, are known as High Performance Work Practices.  Evidence shows that such work practices contribute to higher productivity at the company level. Whilst responsibility for major decisions still rests with management, a voice for workers not only improves decision-making, it also fosters greater trust between management and employees. This according to the TUC is the European experience, and one that is supported by case study examples of the use of information and consultation processes across Europe.

With the 10 year anniversary of the introduction of the ICE Regulations approaching in April 2015, the IPA is embarking on a study of the impact of the regulations on UK organisations, looking at the range of information and consultation mechanisms introduced, and the perceived benefits to employers and employees. To find out more about this research please contact Joe Dromey, Head of Policy & Research.

 

Cable speaks out against Cameron’s strike law reforms

The Conservative Party recently announced that plans to tighten the law on strike ballots will be included in their manifesto for the forthcoming 2015 general election.  Under the plans, any action by unions on behalf of employees will be subject to a 50 per cent vote threshold, meaning at least half of members eligible to vote in a ballot for action will be required to take part for any subsequent strike to be lawful.

Unions will also be required to provide specific details about the nature of the dispute on the ballot paper. The plans will include an introduction of time-limits for action after a ballot.

The Business Secretary Vince Cable said of the plans: “I don’t think there’s any need for them. We have far fewer strikes than we’ve had in the past and industrial relations are generally very good.” TUC General Secretary Frances O’Grady warned that these reforms would “shift the balance of power in British workplaces in favour of the employer” and would have as much impact on non-union members as those in unions.

This follows a significant strike by up to one million public sector workers over pay, pensions and job cuts which took place earlier this month. Unrest seems set to continue into the Autumn as unions ballot 400,000 NHS workers in England, as well as 250,000 PCS members in the public sector for industrial action over long-running disputes.

Indeed, if George Osborne’s planned Autumn Statement announcement, as disclosed by The Telegraph, of a reduction of up to a million civil servant and government department jobs goes ahead, industrial relations in the public sector look set to deteriorate even further.

 

 

The measurement and understanding of human capital – a journey

As has been observed by more and more commentators, we are unequivocally in the ‘age of talent’, where the biggest opportunities and challenges lie with how we develop and build the right organisations with the right people, right skills and capabilities, and right motivations and alignment. We are in a context where despite sustained high youth unemployment, many businesses struggle to find the skills they need. There are concerns about productivity, about under-utilisation of skills and of low wage and low job prospects, concerns about our leadership and management and consequently levels of staff engagement, and we are also debating the challenge of changing behaviours and corporate cultures in many sectors.

It is extraordinary then that we have no common way of measuring or understanding people or human capital. We have no common definition of even the most basic metrics such as headcount and often end up in disagreement between the HR and Finance functions. There is therefore also no common expectation of external reporting, and whilst more businesses are reporting more about their people and their organisation, there is no consistency. Arguably its not for the want of trying given the wide base of research, the focus now on ‘big data’ and analytics, and initiatives such as the BIS/DTI sponsored Accounting for People initiative of 2003.

That is why we initiated the Valuing your Talent research program. We wanted to work together between HR and Finance and other business stakeholders to try and move the agenda forward, to develop a common framework and base of understanding of measurement of people or human capital and to create a positive movement for change. Executives and Boards need to be able to ask the questions and get better answers about the health, performance, sustainability, and agility of their organisations and over time to be able to benchmark and compare. And for external stakeholders, be they shareholders, regulators, analysts or even potential employees, there are many calls for greater transparency – from the make up or demographics of organisations, investments in their workforces, or how or whether their cultures really are changing.

Such metrics are not easy and will consist of both qualitative and quantitative data. Much of this data is hard to make direct connections or causal links with traditional measures of business performance such as profitability or revenue growth. There are lags between investments such as training, and outcomes, and for the most part we will be looking for correlations. We also have to be very mindful of Einstein’s famous quote that ‘not everything that can be counted counts, and not everything that counts can be counted.’

The CIPD working with CIMA and the CMI, with sponsorship and support from UKCES, Investors in People and the RSA are all collaborating on the Valuing your Talent program. The work to date has pulled together and reflected on the state of research and practice and conducted over 100 interviews with CEOs, CFOs, HRDs in more than 50 organisations, as well as with investors and analysts, the risk community, and many of the leading consultants and human capital researchers in this field. We also ran an open forum online collaboration event with the RSA over several months to invite a wider community to participate in the debate.

The intent is to be able to build on what has been done, to find the common ground, to promote a common framework and way of defining the human capital measurement space, and work towards a common language and lexicon which we believe is now critically needed. We have found throughout a great appetite for this and much encouragement in what we are trying to do, but it is also true to say there are disparate views and challenges as well, including some who say that even trying to find commonality of thinking or measurement is unachievable given the huge range of businesses and contexts that exist.

The finance profession is moving squarely in this direction with movements such as integrated reporting clearly identifying the need to better measure and understand the human, organisational and social aspects of business and how they contribute to performance and outcomes. There is little doubt that the HR community needs to develop more insights and measures on people value and there have been too many criticisms in the past of HR’s inability to measure and provide insight.

We set out initially looking at 3 major ‘lenses’ through which to link measures of human capital:

  • how measures of human capital can link to business performance and outcomes
  • how, hopefully the same essential measures, can also be viewed or analysed from a risk perspective
  • how such measures can also be used to value human capital for organisations.

 

Of these 3 views, we have focused mostly on the first one to date, with useful insight but more work to do on the second one on risk.

The third area around human capital valuation is certainly the most contentious. Whilst there are advocates for this within the accounting profession, there are many detractors and those who believe this is a pipe dream. We have not pursued this particular debate any further at this stage, but the debate has certainly been interesting. 

Our report on the work to date, Managing the Value of your Talent, has just been released. It pulls together our work and thinking to date, and proposes a common framework to define the different areas of human capital measurement and the kinds of measures or metrics that can be used. We are developing surveys and other tools to support the understanding and use of the framework and will be continuing this journey with we hope an extending collaboration and debate. This has to continue to be open and non-proprietary, and therefore must continue to be open to challenge and refinement, but we believe it is a positive start. As the key professional bodies and representatives of our communities in HR, management accounting and management practice, we are committed to keep moving this debate forwards and hopefully we will arrive at a common destination.

 

Peter Cheese is Chief Executive of the CIPD

 

Making work better, making Britain better

With the general election looming on the horizon, this is a critical time for the trade union movement and the six million workers we represent. Although growth has returned, the vast majority of workers have yet to benefit from the recovery: stagnant wages, austerity and the casualisation of our labour market are all undermining living standards.

The problems are particularly acute for Britain’s vast army of low-paid workers. The explosion of zero hours contracts, cynical exploitation of agency working loopholes and rapid growth of self employment have all made the world of work yet more insecure. Today, one in six workers is paid less than the living wage. No other country in the OECD has such a long tail of low-quality jobs.

As ordinary working people struggle to get by, those at the top continue to prosper regardless. The typical CEO now earns 162 times more than the average worker. City bankers are raking it in as the government refuses to support an EU bonus cap. And as profitability returns, big business is sitting on a record cash pile.

This winner-takes-all turbo-capitalism is as unsustainable as it is undesirable. Inequality on this grotesque scale means rising household debt, suppressed demand and footloose capital looking for ever-greater, and riskier, returns – not a recipe for long-term economic success. What the great American economist J K Galbraith called “the bad distribution of income” was one of the root causes of the 1929 Wall Street Crash and underpinned the financial meltdown of 2008. We simply cannot allow it to happen again.

That’s why the TUC is pressing politicians of all stripes for change. We want to build a completely new economic model that works for ordinary people: fairer, stronger, more equal. Decent jobs, good wages and better work need to become explicit goals of public policy. Wealth, opportunity and economic power need to be spread more widely. And the relationships between market and state, employers and unions, and capital and labour all need to be reconfigured.

None of this is going to happen overnight. But a smart mix of legislation, regulation, taxation and incentives could certainly deliver positive change by the end of this decade. For the TUC, the status quo cannot be an option. And there are four key areas where change is imperative.

Firstly, we need to rebalance our economy, so we provide those good jobs in the regions that need them most. Rather than allowing financial and property speculation to dominate, we need to nurture the growth industries of the future – aerospace, biotech, pharmaceuticals, renewables, electric vehicles and carbon capture and storage. And we need an intelligent industrial strategy to make it happen and a new state investment bank to fund it.

Secondly, we need to deliver dignity at work. In place of the coalition government’s attacks on basic employment and union rights, we need a fair labour market that provides decency and security for working people. As well as a more extensive framework of workplace rights, we need to promote collective bargaining and stronger unions, because history has consistently shown that workers do best when they are organised. Even the IMF recognises that the relationship between workers and companies has become dangerously lopsided, and is now urging corrective action: a warning we ignore at our peril.

Thirdly, we need fair shares for all. Instead of the proceeds of growth being hoovered up by the super rich and large corporates, we need measures to promote higher pay for ordinary workers. A more generous minimum wage, a living wage and modern wages councils able to set higher pay rates in the sectors that can afford them would all make a difference. Putting workers onto company remuneration committees would also help to crack down on the obscene wage differentials that have opened up between top executives and everybody else.

And fourthly, we need to build better companies. Britain already has some world-class firms with high employment standards and productive relations with trade unions. But we don’t have enough of them. A big part of the problem is a shareholder-centric system of corporate governance that simply isn’t fit for purpose. Rather than the power resting with investors – who are increasingly based overseas – we need much more representative decision-making apparatus which empowers other stakeholders such as workers.

There’s a lot we could learn from Germany. Rather like its world-beating national football team, German companies thrive on teamwork, collaboration and intelligent management. Their system of co-determination – with worker representation in the boardroom – has consistently delivered strong financial performance alongside high levels of welfare at work. While we can’t necessarily transplant that philosophy wholesale to the UK, there is absolutely no reason why workers should not play an active role in the upper echelons of our corporate life. Democracy matters just as much industrially and economically as it does politically.

There can be no doubt that Britain needs a completely new kind of workplace architecture. From stronger employment rights to a fairer distribution of reward and a much more powerful voice for workers, the case for fundamental reform is overwhelming. Incrementalism just won’t cut it: we must summon the political will, the collective courage, to make a decisive break with the past. Free-market fundamentalism has failed working people and failed our economy. It’s time for change.

Frances O’Grady, general secretary, TUC

The one, two, three of employee voice

New research seems to confirm what most of us knew already: engagement works. The report, prepared by the IPA for Acas, shows that the four enablers of employee engagement identified by Macleod and Clarke do produce more committed and motivated employees. Even more encouragingly, employers appear to be making the connection between levels of engagement and levels of productivity and are beginning to understand what they have to do to make engagement a practical rather than a theoretical concept.

Analysing findings from WERS 2011, the research highlights a particularly strong improvement in the strategic narrative enabler. Against the backdrop of the recent economic recession, this may indicate that employers realise that being clear about where an organisation is going and how it plans to manage change in uncertain times, is critically important for everyone.

Although there are also positive signs with regard to two of the other enablers, ‘engaging managers’ and ‘integrity’, there is some cause for concern regarding ‘employee voice’. The report found that despite the positive correlation between senior manager meetings and employee voice, only one in three employees say that their managers allow them to influence decision making. This is a matter of concern.

This point is re-enforced in the IPA report on engagement in the NHS. One aspect of employee voice that is critically important in the NHS post the Francis report is ensuring that employees have the chance to raise concerns with their managers about errors or incidents around patient care. There seems to be a worrying gap between allowing concerns to be expressed and these views having an impact on decision-making. Although 84% of staff said they were encouraged to report errors and incidents, only 62% thought actions would be taken in response.

Macleod’s description of employee voice goes beyond employees “being able to voice their ideas” and clearly anticipates a more active role in decision-making, with “joint sharing of problems and challenges and a commitment to arrive at joint solutions”. As the IPA know only to well, this vision of joint working is often best illustrated by the partnership agreements reached between unions and management.  

I see employee voice as being made up of three component parts – communication, consultation and negotiation. The recent analysis of WERS suggests that, up till now, the focus may have been too narrowly focussed on the first aspect of voice, communication. The danger is that some employers see communication as an end in itself, and evidence in the IPA report implies that “many employees see their managers’ efforts to seek their views as a merely cosmetic exercise that will have no consequence.”

The prominence of strategic narrative in the new report may support the old adage that you manage people through good times and lead them through bad times. As we move gradually out of the shadow of the recession, employee voice may begin to be associated with less passive and more active characteristics – in other words, renewed confidence in job security may encourage employees to expect more of a role in decision making.

But how widespread and effective are the systems for representation and consultation that lie at the heart of employee voice? Recent Acas reports on the incidence and impact of formal channels for consultation give a mixed picture. While the number of union representatives remains stable at 150,000 and representatives are reporting an increase in the range of issues they are can negotiate on, the picture with joint consultative committees (JCCs) is a little more ambiguous.

Although the incidence of these committees in workplaces had remained stable at 8%, the proportion of workplaces covered by higher-level JCCs fell from 29% in 2004 to 20% in 2011. This means that there is less consultation at the higher level where more strategic decisions are being made. And, of course, for representation to be effective at all, it has to be well resourced, so we need to keep an eye on the facilities and time available to representatives. 

There is evidence that some organisations are taking a more integrated approach to employee consultation, with direct forms of communication, via feedback sessions at meetings, for example, going hand in hand with the more formal joint consultative committees.

The good news is that with many organisations embracing the need for strong strategic narratives, communication channels seem to be largely working well. Perhaps the next step, as part of this strategic narrative, is try and set out what might constitute an optimum voice mechanism. In other words, rather than relying on voice to be heard, or not, at meetings and via emails, we might be better off describing the various diverse channels by which employee voice can be effectively harnessed and put to use. This, of course, is as much about listening as talking. 

‘Employees on boards’ takes employee voice into the realm of corporate governance and may be a step too far for those employers who more readily associate voice with surveys and team meetings. But there is no reason why employee voice should not embrace all of the available channels. As trust and cultural values are such an important part of the narrative, why shouldn’t employees have a say in constructing it?

Employee voice is clearly lagging behind the other three enablers of engagement and we need to get it higher up the management agenda. Making this happen may be about changing the way we perceive voice – transforming it into something more assertive, more participatory and more involved in decision making.    

 

Brendan Barber is Chair of Acas

Fair Shares – Strengthening voice and engagement to boost productivity and pay

The UK lags behind most of Europe in terms of employee involvement in decision-making and we suffer from relatively poor productivity. In this article, Mathew Lawrence of IPPR argues that through shifting the balance of power in the workplace, we could address both these issues and build a model of ‘shared capitalism.’ He summarises the findings of recent IPPR research, and calls for a series of changes to promote both employee voice and engagement.

 

There has been much interest in the last few months in Thomas Piketty’s analysis of modern capitalism. Though his work has its critics, it has effectively highlighted the stark inequalities of power, wealth and income that capitalism generates and further strengthens the case for new broad-based institutions of employee voice, engagement and reward.  For the power imbalance in our economy underpins the UK’s poor productivity record. When one third of people are afraid in some way at work, a fifth of workers – and growing – earn less than the Living Wage and the bottom half of the country own only 2 per cent of the wealth, it is not surprising that our productivity rate is now 16 per cent below the average of other G7 nations, the widest gap since 1994.

 

This is both an economic challenge but also an ethical concern.  IPPR’s new report – Fair Shares: shifting the balance of power in the workplace to boost productivity and pay, argues we can address this by building new institutions to disperse both economic power and strengthen new forms of employee voice.  Evidence from the UK, EU and the US showcased in the report clearly demonstrates such reforms could improve both productivity and pay at work and help create a more sustainable, prosperous economy nationally.  The challenge then is to disperse capital ownership claims, democratise the workplace and make finance a useful servant not a dominant master. In essence, a step-by-step democratisation of the marketplace is required to give people a genuine stake and a say in their place of work.  How then can we translate fine words into results?

 

Firstly, firms should be governed more democratically, with strengthened mechanisms for employee engagement and influence at work. As many IPA members are acutely aware, a happy, engaged workforce is key to sustaining success as a company.  Fair Shares therefore sets out new institutions of workplace democracy, such as introducing an ‘employee working life forum’, that would learn from the successful economic democracies of Germany and the Netherlands, and ensure all companies give employees dignity and a voice at work.  We also suggest potential new avenues for collective bargaining in the workplace to help ensure everyone is represented at work.

 

Corporate governance should also be reformed to account for a wider range of interests, including employee representatives on boards. We are an outlier within Europe in terms of not including the voice of employees at a strategic level and evidence clearly shows this places ‘UK plc’ at a disadvantage.  Similarly, stronger rights on consultation and information disclosure, for example by reforming the information and consultation regulation, could ensure more firms benefit from an engaged workforce.

 

Secondly, how power and profit is distributed is profoundly shaped by how a company is owned and structured. The dominance of the PLC model intent on maximising returns to shareholders should give way to greater pluralism that rewards a much wider range of committed stakeholders. We therefore recommend ways to improve funding and support for the mutual, co-operative and employee owned sector. 

 

Similarly, to ensure contribution is matched by reward we recommend introducing a fiscally neutral tax-advantaged profit sharing scheme to ensure all employees share in collectively created success. It would alter the balance of power and reward between labour and capital whilst putting money in people’s pockets. In France, where profit sharing is compulsory for firms with more than 50 people, over €6.7bn was distributed to millions of workers in 2012. Democratic profit sharing, where all employees participate and vote on the levels of the share, has been proven to successfully boost productivity, wellbeing and commitment.

 

Finally, deep concentrations of economic power will only be reversed if finance is made to better serve the productive capacity and social needs of the UK. We need new forms of patient, democratic finance, such as new co-operative capital funds, Solidarity Investment Funds as practiced successfully in Canada and a greater role for public financing of companies through a Small Business Administration unit that has proved so successful in the USA, Singapore and Germany. 

 

For those of interested in building a more productive economy where all employees have voice and are treated with dignity, we need to get the framework right to help companies succeed in engaging and rewarding their workers.  A focus is needed on building new institutions of democratic wealth and influence in the economy that can drive innovation, competitiveness and a future of broad-based prosperity for all. While there are of course significant vested interests that would resist the democratisation of the economy, it is a challenge worth pursuing. After all, as Raymond Williams argued, “to be truly radical is to make hope possible, rather than despair convincing”.

 

Mathew Lawrence is Research Fellow at IPPR

 

News in Brief May 2014

Zero-hours workers feel excluded finds ACAS Research

Recently released research by ACAS has shown that workers on zero hours contracts feel excluded, and that this represents a challenge to employment relations.

The report brings together recent research in the area with the views of employers and employees who had used the ACAS helpline about zero-hours contracts. It found that workers on the controversial contracts often feel excluded from the sense of security, fairness and trust that is associated with permanent contracts. It also highlighted a lack of transparency over contractual arrangements for zero-hours workers, with many not even knowing they were on such contracts.

Brendan Barber, Chair of ACAS responded to the report, saying “our analysis reveals that many workers on zero hours contracts experience a deep sense of unfairness and mistrust that go beyond the use of exclusivity clauses. A lot of workers on zero hours contracts are afraid of looking for work elsewhere, turning down hours, or questioning their employment rights in case their work is withdrawn or reduced. This deep rooted ‘effective exclusivity’ can be very damaging to trust and to the employment relationship.”

ACAS have called for new guidance on the use of zero-hours contracts so employers and employees are clear on the arrangements and mutual rights and responsibilities. They’ve raised concerns about the use of exclusivity clauses in such contracts and have called for more research in the area.

Previous research by CIPD showed that workers on zero-hours contracts were no less satisfied with their work than other employees but the Resolution Foundation have shown that zero-hours workers are more likely to be ‘under-employed’ and to be looking for a new job. The increasing prevalence of such contracts has aroused concern. The Government has held a consultation on the issue which closed in March. The Labour party has promised to crack down on zero-hours contracts, saying they would ban exclusivity clauses and give workers the right to a fixed hours contracts after a year.

 

Last minute talks avert tube strike but dispute rumbles on

A planned three-day walkout by London Underground workers was called off after last-minute talks brokered by ACAS.

Members of the Rail, Maritime and Transport (RMT) union had been due to strike for 72 hours from 9pm on Monday 5th May in a dispute over the closure of ticket offices on London Underground. This followed a 48 hour strike in late April.

The RMT is angry about the closure of ticket offices which they say goes against promises given by the Mayor of London, and would lead to the loss of 960 jobs. London Underground however have insisted there will be no compulsory redundancies and that the changes are a vital part of the modernisation of the tube.

The RMT claimed they had secured ‘real movement and significant progress’ including protecting the pay of their members who might be forced to change roles. Boris Johnson though claimed the cancellation of the strike showed that the union had  ‘finally seen that their tactics aren’t working.’

There will be a review of the ‘Fit for the Future’ programme but ticket office closures remain likely. The dispute will therefore rumble on with potential further industrial action over the next few months.

 

Unemployment at a five-year low as growth accelerates

There was more good economic news as the latest employment figures showed that the number of people out of work in the UK had fallen to a five-year low.

The jobless total fell by 130,000 in the three months to march to a total of 2.2 million according to ONS figures. Youth unemployment and the number of people claiming Jobseeker’s Allowance also both fell. The number of people in work rose to a record high of 30.43 million, driven by a large increase in self-employment.

There was more positive news from a CIPD survey of employers which showed an increasing willingness to recruit over the next few months. This was particularly the case among SMEs, leading the CIPD to predict a ‘hiring spree’ among smaller businesses.

Earnings were also up 1.7% on the year before, above the CPI rate of inflation, as the squeeze on incomes showed signs of easing. However, excluding bonuses, earnings only increased by 1.3% and they remained below the higher RPI rate of inflation which factors in housing costs.

Despite the positive figures, some have voiced concern about the steep growth in self-employment. Recent research showed that an increasing number of recently self-employed people would prefer to be an employee.

Weathering the Storm – Employee Engagement during the Recession

The last few years have been really tough for many employees. Not only did many face significant and difficult workplace change in the face of the recession, but most have also had to deal with a prolonged squeeze on wages which is only now starting to ease.

Yet remarkably, as new research released by the IPA today shows, employee engagement seems to have actually increased in the last few years despite the challenges faced by employees. The research, conducted by the IPA for Acas, is based on analysis of the most recent Workplace Employee Relations Study, the largest survey of its kind in Great Britain and a fantastic resource for understanding the world of work.

The research examined the ‘enablers of engagement’ that David MacLeod and I identified five years ago in ‘Engaging for Success’. We found that employee perceptions relating to all four of the enablers of engagement – strategic narrative, engaging managers, employee voice and integrity – had improved since 2004 when the survey was last carried out. There was a particularly strong increase in the ‘strategic narrative’ enabler with two out of three employees (65%) saying they shared their organisation’s values, up 10% since 2004.

However, although there has been a slight improvement in employee voice, the scores here remain worrying low. Just one in two employees (52%) say that their manager seeks their views. Fewer still – just one in three (34%) – say that their manager allows them to influence decision-making. The gap here suggests that even among those who say their managers seek their views, many see this as just a cosmetic exercise, rather than an effort genuinely to involve them and give them a voice. What’s more, there also seems to be an appetite for greater voice at work. Those who feel they are not involved in decision-making are far less satisfied with the extent to which they have a voice.

We found significant variations in engagement by organisation. Employees in the public sector tended to score lower on the enablers of employee engagement than those in the private and voluntary sectors, perhaps reflecting the greater impact of the recession on these workers. There were also lower levels of engagement in organisations with more employees, reflecting a greater challenge large organisations have in engaging their people.

There also seem to be gaps in engagement between some groups of employees. Our research found that men were less engaged than women and that middle-aged employees were less engaged than both older and younger workers. There is a particularly stark and concerning gap in terms of disability with disabled employees being far less engaged than the average worker. Employers should ensure they have robust procedures in place for measuring engagement, and that they can identify, understand and address any gaps there might be. These areas warrant further investigation and over the next few months, the IPA will be looking at how best to manage engagement in a modern and diverse workforce. Do get in touch if you want to find out more about our ‘Diverse Voices’ project.

As our research showed, there are things that employers can do to increase engagement. Contact between senior managers and frontline employees seems to be crucial for giving employees a sense of voice. Employees were far more engaged in organisations where there are meetings between employees and senior managers, particularly when employees are given the opportunity to raise questions or offer views. It seems like a simple thing to do, yet under one in two employers (46%) currently hold regular meetings between senior managers and employees where at least a quarter of the time is given over to employees to raise issues and ask questions. Employers need to ensure that they engage employees in a genuine way which promotes dialogue and involvement rather than simply one way communication.

But why does this all matter? Our research has also added to the growing weight of evidence that shows employee engagement is a key factor in organisational success. We found that managers were far more positive about both labour market productivity and financial performance in organisations with higher levels of employee engagement.

It’s becoming increasingly clear that effectively engaging with employees matters, and that it makes a difference to the bottom line. More and more employers are waking up to this fact. All organisations need to engage with their staff effectively and give them a voice in order both to provide fulfilling employment, to promote employee wellbeing, and to ensure they get the best out of their most important asset.

Nita Clarke OBE is Director of the IPA and Co-Chair of the Engage for Success Taskforce. You can download the research from our website at www.ipa-involve.com/resources/publications.