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Focus on skills in government’s new industrial strategy

The government has published the first details of its new industrial strategy in January, outlining a 10-point plan for building a robust economy in the face of economic change, increasing automation and the unknown impact of leaving the EU. “Underpinning this strategy is a new approach to government, not just stepping back and leaving business to get on with the job, but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success,” the Prime Minister said.

There was a renewed focus on productivity in the strategy, stating it was important “to ensure that every place meets its potential by working to close the gap between our best performing companies, industries, places and people and those which are less productive.”

MPs call for crackdown on discriminatory dress rules

In the week of “women’s march” demonstrations across the UK and USA, the British government is looking into sexism in our workplaces.

The demand has come from two parliamentary committees, for Petitions and for Women and Equalities. Their report follows the experience of London worker Nicola Thorp, who was sent home last spring for not wearing high heels to work. Her parliamentary petition on the issue gained more than 150,000 signatures. The joint report of the two committees, entitled High Heels and Workplace Dress Codes, found that the Equality Act 2010 should ban discriminatory dress rules at work, but that in practice the law is not applied properly to protect workers of either gender. MPs called for firms to face fines for such discrimination, and for employment tribunals to make awards against employers who transgress the law.

TUC general secretary Frances O’Grady, commenting on the report, said: “Far too many employers are still stuck in the past when it comes to dress codes . . . It is unacceptable that in 2017 bosses are still forcing women to wear painful, inappropriate shoes and uniforms.” Ms O’Grady added that the high cost of employment tribunals meant that “many women can’t afford to challenge sexist policies” and she urged ministers to scrap tribunal fees.

An uncertain future for workers’ rights

The Workers’ Rights (Maintenance of EU Standards) Bill was put forth for debate by Labour MP Melanie Onn, receiving official backing from UNISON. The Bill aimed to preserve, post-Brexit, all the employment protections workers currently enjoy in the UK. The reasons why such a bill might be needed are complex, but boil down to essentially this; while some workplace rights already have their own independent foundation in British law (such as the Equal Pay Act 1970 and Equality Act 2010 which protect against discrimination at work), several other areas of legislation derive either partly or wholly from European directives. These include rights for agency workers, the European Works Council, information and consultation of employees, health and safety, TUPE, the working time directive and the protection of young people at work. This Private Member’s Bill was prevented from being debated in Parliament on the 13th of January due to a four hour filibuster by Conservative MPs on the previous Broadcasting (Radio Multiplex Services) Bill. Theresa May has, however, gone on record to say that workers’ rights “will be guaranteed as long as I am prime minister.”

The Autumn Statement 2016

Chancellor Philip Hammond gave the government’s first major update on economic policy since Britain voted for to exit the European Union when he delivered the Autumn Statement on the 23^rd of November. With the triggering of Article 50 looming there is continued confusion about what Brexit will look like and its impact on the UK workforce, the announcements made have been framed as a way to support the UKs economy.

The chancellor has declared a £23bn investment fund for infrastructure and innovation set to deliver a surge in spending on roads, rail, low-emission vehicles, broadband and 5G. This aims to ensure that the UK is prepared for current and future economic uncertainty and to improve the UKs productive.

Currently the UK lags behind German and the US in terms of productivity by 30%. This has been partly attributed to a deficit in professional management so, to help combat this, Hammond has committed £13m to enact Sir Charlie Mayfield’s proposal to improve management skills across British business. Currently, only one in five businesses invest in management skills. The Chancellor’s comment signals that we need world-class management and leadership to close the gap with our G7 competitors.

CBI Speech

During her keynote speech the CBI’s (Confederation of British Industry’s) Prime Minister Theresa May has backed away from a pledge to require companies to put worker representatives on boards. Speaking to the CBI’s annual conference, while she emphasised the importance of representation she made it clear that her government has no intention of mandating it.

She added: “Some companies may find that these models work best for them – but there are other routes that use existing board structures, complemented or supplemented by advisory councils or panels, to ensure all those with a stake in the company are properly represented. It will be a question of finding the model that works.”

In October, Mrs May said she planned to have “not just consumers represented on company boards, but workers as well”. On the change of message, the TUC general secretary, Frances O’Grady, said: “Theresa May made a clear promise to have workers represented on company boards. The proposals in her speech today do not deliver on this.

“This is not the way to show that you want to govern for ordinary working people.”

May’s official spokeswoman denied the policy had been watered down. “Look at what the PM has said all the way through. This is about how workers’ views are represented on boards. This is consistent with that… I think there will be a number of ways to do it. Part of the approach we will be taking is to put it out to consultation and hear views from stakeholders, employees and businesses on the best way forward. We are absolutely committed to having the voice of workers heard on boards as part of establishing the best corporate governance of any major economy.”

British workers won’t get a pay rise for 10 years

The Institute for Fiscal Studies (IFS) have said that the UK was in line for ‘an additional dollop of austerity’ in the 2020s after Chancellor Philip Hammond admitted in Wednesday’s Autumn Statement that he has given up hope of eliminating the deficit by the end of this Parliament.

Included in the Autumn Statement were changes to the living wage going from £7.20 to £7.50 in April, which equates to a £500 annual increase for low wage workers. However, forecasts from the independent Office for Budget Responsibility suggested that real wages will remain below pre-recession 2008 levels until 2021 – the longest period since the Second World War.

IFS director Paul Johnson said ‘One cannot stress enough how dreadful that is – more than a decade without real earnings growth. We have certainly not seen a period remotely like it in the last 70 years.’

Brexit means Brexit, but workers on boards, it turns out, does not mean workers on boards.  Despite Theresa May making the commitment on the steps of Downing Street, yesterday’s Green Paper on corporate governance reform has shelved the plan.  As Gavin Kelly of Resolution Trust put it, the forward march of labour appears to have been halted yet again as another attempt to reform company law ends up tinkering at the margins.

Rowing back on the decision to ensure worker representation in the boardroom is a step in the wrong direction. Brexit was a rejection of the status quo and a signal that people want more control over their lives.  In the workplace, it is obvious why: the UK ranks ahead of only Bulgaria, Estonia, Latvia and Lithuania in the EU in terms of ensuring employees have formal participation rights and strong voice in their workplace.  At the same time, real weekly earnings remain below their pre-crisis peak. 

The sluggish recovery has of course sharpened the pain.  However, this is a problem that predates the crisis, in which the share of profit going to labour has been in long term decline, reflecting in part our corporate governance code that privileges shareholders above all other stakeholders, including workers. Work for many then is disempowering and unrewarding, both financially and in terms of having a sense of purpose and control.

Ensuring worker representation at the boardroom would not be a panacea.  However, it would help ensure that a broader range of voices were empowered and would help deepen the legitimacy of decision-making within a firm by ensuring the views and interests of more than just shareholders and senior management were properly accounted for. Leaving the UK’s overly narrow corporate governance regime in place does the opposite, concentrating power and excluding vital stakeholders from shaping key decisions affecting the workplace.  This is bad for workplace democracy. It is also bad for our economy.

Worker representation on boards isn’t a radical move, after all. Among our more productive, investment-rich European competitors it is in fact commonplace. In the majority of EU countries it is a legal requirement to have employee representation on the board of companies, although the obligations vary from country to country.  The institution of board-level representation stems from the more co-ordinated form of capitalism prevalent on the continent, a more collaborative model that in turn underpins their better performance on productivity and pay. 

Yet even in the UK, there is clear and broad evidence that ensuring ordinary workers are properly represented with an effective say over their working lives is good for productivity, pay, and performance. Sadly, the watered down proposals still leave us an outlier in terms of the degree to which shareholder primacy and managerial prerogative shape the incentives and actions of British firms, to the detriment of the UK’s economy.

The aim of corporate governance reform, after all, should be to tackle the deep-rooted problems in the UK’s economic model: low levels of business investment and high levels of pay inequality in particular.  Yet by pulling its punches, the government has missed an opportunity to undertake deep-rooted reform of how our companies operate and for whom.

This is one reason why IPPR has recently launched its wide-ranging Commission on Economic Justice, to help rethink economic policy for post-Brexit Britain to make sure the economy – which belongs to us all – works for everyone.  The UK has long-term, structural economic weaknesses that require fundamental reform to overcome.  Reforming corporate governance must be at the heart of this.  The critical point is that the debate around workers on boards is only one narrow part of a broader question of how to reform corporate governance to make our economy more productive and democratic. Corporate governance shapes who has power and voice within a firm. 

By imagining new ways of governing the firm, and building new legal instruments to reshape corporate governance, we can in turn change how powers, responsibilities and freedoms are distributed at work.  The status quo is neither natural nor inevitable. However, changing it will require rethinking the foundational instruments of capitalism, from voting rights, to the limited liability company, to notions of audit and shareholder supremacy.   In doing so, reformed company law can help create better behaviour, from greater long-termism and higher investment rates to fairer pay structures and more productive, inclusive workplace cultures.

We are regularly told how inventive and innovative liberal market capitalism is.  In the case of the form of the company however – how it is governed, for whom, for what purpose – things have barely changed since the Victorian era.  This Green Paper is a narrow window of opportunity to change that. We must try and seize that, for by reforming the constitution of the firm – our corporate governance code – we will help address the deep flaws in the UK’s economic model.  Workers on boards is therefore a necessary step, but only the first of many required to build better firms and ultimately, a stronger, more inclusive economy.

Soon after the Referendum, the IPA sent out a press release stating our thoughts about the accompanying uncertainty for the UK economy that the result would bring and how it would be a difficult time for many UK businesses. We predicted that this sense of uncertainty and anxiety would be shared not only by business leaders, but also by employees in a great many workforces across the country. It would be vitally important to make sure that employees received clear and reassuring communication from their leaders and made to feel properly involved in any important decisions that would be taken about the future of their organisation. We firmly believed then, and still do, that a failure to properly engage with employees during this critical period would have serious repercussions leading to lower productivity, higher turnover and absenteeism and further compound the risks and problems faced by the organisation.

Several key questions have been posed to us following the Brexit vote including:

• What are people’s concerns relating to the future of their work since the referendum?
• What communication have they had from their employer since the referendum relating to Brexit and what reassurance has this provided?
• How confident are workers that their employment is secure, do they feel that their business will benefit or be harmed by Brexit?
• Do they fear outsourcing abroad?
• How do workers feel their jobs might change if EU employment laws were to be repealed in the UK?
• What aspects of Brexit are UK workers most concerned about and what would they like to see the government and business leaders doing more of to reassure them?

It is early days and there is less clarity around what Brexit will actually mean that we might have expected. This may have contributed to the overall uncertainty that we pick up from organisations across all sectors. There is, however, a percentage of UK managers and workers who are certain that the Brexit vote presents huge opportunities for themselves and their organisation. There is a similar percentage that thinks exactly the opposite. This polarisation of opinion tends to obscure the potentially larger percentage of people who are unsure – unsure both in terms of what they think but also unsure about where to find the information to help them to make up their minds.

Amidst such uncertainty, we need to look for as much certainty as possible. What we do know is, regardless of specific circumstances, that UK workers can remain engaged with their organisation even under the most testing conditions. Uncertain times re-enforce the need for a strong strategic narrative and organisations need to tell staff what their plans are – many staff may be under the impression that they do not actually have a plan. A reluctance from managers to share such information is understandable but this is a time for leaders to show strength in planning, communication and – above all – in thorough, decisive strategic decision-making.

This requires knowledgeable and confident leaders supported by skilled line managers – without the latter, the strategic narrative does not translate to operational levels. However, it is equally important that the employee voice is informed enough to contribute to solutions rather than a means of simply highlighting problems. This may seem aspirational but it is worth considering the overall effect on the UK economy and individual organisations if the aspiration is not realised. There is a strong argument that uncertainty amongst workers spreads and grows at an unmanageable rate resulting in reduced confidence in their business, knee-jerk decisions about their future and an unnecessary loss of talent.

Despite this, engaging employees does not appear to be high in most organisations’ priorities. There is a tendency for some leaders to think that workers are not interested in the high-level strategy but this is a view that the IPA has always challenged. Workers are interested when leaders remember to tell them and, despite an inevitable percentage of cynicism that leaders receive when they do so, the vast majority of people feel better for being informed. People do not expect reassurance when none can be given and the cynicism is often disproportionately represented through the various channels for voice.

Uncertain times require a higher level of clarity around all communications whether they are top-down or bottom-up. It is imperative that mangers “tell it like is” and that voice represents the engaged as well as the disengaged. More importantly, this is not a time for leaders to think of employee engagement as something “fluffy” or “nice to have”. It should be their number one priority.

If you are interested in more information about how the IPA could support your organisation in the weeks and months ahead, either through training and consultancy via our “How to deal with the effects of Brexit” programme or through your participation in our research please get in touch via [email protected] or call us on 0207 759 1000.

Survey shows global consumers enthusiastic about AI

In June 2016 Weber Shandwick and KRC Research surveyed 2,100 consumers online in five global markets on their feelings about AI.

Perceptions of AI are undoubtedly coloured by stories about robots, drones, gaming, and speech recognition so understanding of what AI is in practice is limited, with only 18% saying they know a lot about it and one third knowing nothing. The findings suggested that consumers have some concerns about job loss, security issues, and privacy infringement, with the probability of job loss due to AI being the largest concern among respondents. When asked whether AI is more likely to create jobs or lead to job losses, more consumers said job losses (82%) than job creation (18%).

Even with these concerns for the most part consumers are very accepting of AI. Far more saw AI’s likely impact on society as positive (45%) than negative (7%). Many people appear to still be willing to use AI to save time, complete dangerous tasks, and make their lives easier – a majority trusted AI to provide elder care, health advice, financial guidance, and social media content creation. Over 40% trusted AI to cook, teach, police, drive and provide legal advice.

It seems that consumers for the most part agree with the message emphasised by Barrack Obama that ‘’historically we’ve absorbed new technologies, new jobs are created, and standards of living go up”.  

Business leaders broadly supportive as government develops plans for workers on boards

Theresa May has made the issue of reforming capitalism a central theme of her leadership, pledging reform on executive pay and pensions as well as governance. In her speech for the Tory leadership, Theresa May attacked runaway executive pay and said she would put workers and consumers on boards to make companies more accountable to society.

This proposal has been well received – in a poll of more than 60 company bosses and policymakers a clear majority spoke out in favour of employee representation on boards, contrary to predications that big business would be hostile to the idea.

Sergio Ermotti, chief executive of UBS, said the policy was a “worthwhile idea”, in part because of that investor angle. “Our employees taken together are our second-largest shareholder,” he said. “If they held the shares through a single body, one could certainly argue for board representation.”

Even so, there are still many questions left to answer, for example, whether employee representatives have the legal obligation to represent the interests of all stakeholders, not just staff. This proposal is at its early stages and in order to fully assess the impact this will have on the UK workforce and employee engagement more detail is needed.

Millennials first generation set to earn less than their parents according to new study

New research by The Resolution Foundation found that under-35s earned £8,000 less in their twenties than Generation X workers. This generation, also known as Millennials, are set to become the first generation to earn less than their predecessors. Prime Minister Theresa May warned last week of a growing divide between a “more prosperous older generation and a struggling younger generation”.

The think-tank also found that millennials will have spent £44,000 more on rent by the time they reach 30 compared to the baby boomers, and £25,000 more than Generation X. Extra spending on rent and increased cost of living has further contributed to reduced standards of living among young people and made it increasingly difficult for them to save for a deposit to buy a house.

Senior policy analyst Laura Gardiner said: “Britain’s continuing failure to build enough homes means that unless we change course the struggle of young people to own their home is only going to get worse.”

Remarkably, it is nearly 60 years since the publication of the last substantial research-based book on The John Lewis Partnership. That was the noted analysis of the democratic credentials of the partnership by Alan Flanders and colleagues published in 1968. It was a very different time: strikes, trades unions and industrial democracy were to the fore in everyday debate. And there was a Labour Government.

In 2016, there are new and even more pressing reasons for returning to this case. Many things have gone wrong with conventional ways of business, so much so, that it has become self-defeating and unstable even in its own terms of pursuit of shareholder value.

It is against this backcloth that the John Lewis case merits another close look. There is a widespread view that the JLP model is well-known already – a popular middle class retailer, quality goods, excellent customer service from owner-partners in full-assortment department stores and the Waitrose supermarkets. But, from our decades’ long engagement with the organisation, we conclude that the JLP phenomenon is more complex than this standard depiction and at the same time more fascinating.

Operating within the fiercely competitive and volatile retail environment of the UK, JLP seeks to match and indeed exceed the commercial goals of its many rivals while simultaneously safeguarding and promoting the interests of its partners (employees). Indeed, the ‘ultimate purpose’ of the partnership as stipulated by the Founder, and adhered to ever since, is the ‘happiness of all its members through worthwhile and satisfying employment’ within the framework of a ‘successful business’.

The organisation is not answerable to the City and can thus pursue longer-term objectives. It can and does use its own assets to invest and also borrows for the same reasons.  The strategic choices around allocation of resources between investment for the future, rewards to Partners in the form of salaries and the annual bonus, the pension fund, and customer service, represent ongoing tensions. These are recognised and in some ways institutionalised – as for example, in the long-standing practice of encouraging and publishing anonymous, questioning, letters in the house magazine. Letters which the relevant director is expected to answer publicly.

The dual objectives of partner happiness and a successful business are often seen as compatible on the grounds that the one drives the other. On this reckoning it is not a choice between ‘nicer or better’ but both – in an intertwined, mutually reinforcing, way. Such a formula echoes the idea of the customer-service-profit chain made famous by Sears in the USA.

However, as revealed in our new book, A Better Way of Doing Business? Lessons from the John Lewis Partnership, practice is not so straightforward. The book traces and analyses business decision-making over 25 years focusing on responses to growth opportunities and to recession and redundancies. It finds that the model does not automatically deliver the goods. Indeed, in previous decades John Lewis was not always so successful or so celebrated. During the era of de-mutualisation, JLP was sometimes considered dated and dowdy with an air of complacency. Indeed, there is an academic theory going back to the Webbs, at the beginning of the last century, that worker cooperatives were destined to ‘degenerate’. The notion was that they would either indulge their members and seek to protect them from risk and exertion to such an extent that such organisations would fail commercially, or conversely that they would adopt surrounding commercial priorities to such a degree that the democratic element would suffer.

That thesis may be regarded as rather over-deterministic. But it is a useful indicator of inherent tensions that need to be managed. We saw plenty of evidence of numerous attempts to ‘refresh’ the democratic structures and processes. This occurred at the top level with adjustments to the composition and workings of the Partnership Council, and at branch and regional levels to try to ensure healthy grassroots participation.  Likewise, from 1999/2000 when we began our work with JLP, there was a sustained attempt to ‘modernise’ the commercial offer. At that time it should be recalled, the stores were closing at mid-day on a Saturday and not re-opening until Tuesday morning. There was no formal business planning, advertising was rarely used and significant investment in store refurbishment and the growth of the estate were matters for the future. There were allegations of complacency.

The subsequent expansion and indeed the focus on growth both by acquisition and new build have not been without controversy. Some critics questioned the growth strategy. Why not simply protect the interest of current partners? This was one of the issues which raised the underlying question and debate in the Partnership about ‘Who is a member?’ (and by implication, whose interest are being advanced?). Expansion into new outlets such as petrol station convenience stores, motorway services, and overseas locations plus new choices about outsourcing and logistics including distribution centres and transport all raised the question as to whether in all cases these should be staffed by Partners.

The lessons from the book extend beyond this organisation and indeed beyond employee-owned businesses in general. Anyone striving to make sense of the multiple objectives of commercial survival and ethical behaviour can learn from the actual practices of John Lewis managers, and Partners more broadly, over the past 25 years. 

John Storey is Professor of Management at The Open University Business School and a Fellow of the British Academy of Management. He was a former Chair of the IPA. He is currently leading a major study on service redesign in the NHS.

The IPA launched its new Hub for representatives at the event – Unleashing Employee Voice for Business Success – on 29 September in London. This Hub will provide, for the first time, a professional support network for all representatives to share good practice, ideas and practical learning to strengthen the employee voice in their respective organisations.

There is overwhelming evidence that successful organisations listen to their employees and are able to harness the potential of their workforce. As Nita Clarke, IPA Director, pointed out, having a robust and informed employee voice has been linked to numerous positive outcomes; from supporting employee engagement and boosting performance and productivity, to improving decision-making, employee satisfaction and wellbeing.  

Nita quoted her colleague and co-author of the publication “Engaging for Success – Enhancing Performance through Employee Engagement”, David MacLeod, from a more recent IPA report, “Releasing Voice for Sustainable Business Success”. In this publication, MacLeod stated that, “The importance of being listened to and, therefore, valued and respected at work by colleagues, managers and the organisation as a whole cannot be over-estimated. We know that it is one of the key factors influencing how much employees value their organisation, and that being heard is vital for authentic workplace relationships based on trust”.

Staff forums have to be based on a strategic on-going agenda based on the major changes that are affecting the organisation, clarity about what is up for discussion, clarity about the role of the representative and high quality communication to ensure meetings are not seen as talking shops.

Other speakers included; Stuart Inness, Senior Representative of VIVO (The Standard Life Staff Association), Sally Knill, Head of Reward at Victrex, Harriet Molyneaux, Head of Digital Engagement at Hot Spots Movement and Rachel Pinto, from Acas. All made a huge contribution to the event with insightful presentations that facilitated an informative series of discussions.

Inness pointed out that all VIVO representatives are supported in their roles by a leadership development programme, mentoring and coaching designed to maximise their contribution to both the staff and Standard Life’s business. VIVO is a great example of just how much a staff forum can achieve and has gone beyond what was originally envisaged for representative groups of this type – a journey that has taken them from establishing a voice to creating an informed one and through a great deal of its own development from transactional to transformational.

Knill described how a £7,000 investment in IPA’s training and consultancy services saved the organisation £1 million through a major pension change programme. A clear channel for information and feedback eliminated issues as soon as they rose. This was based on up front transparency from the organisation built on the additional confidence of both managers and representatives.

One representative commented, “we were pleased that Victrex were fully committed to the consultation process, not only providing time and resources for the Group but also independent training into what constitutes a successful consultation, the Group feels that this consultation has been successful in addressing concerns raised, has delivered improved outcomes and should be considered as a model for future consultations.” Sally concluded by stating that the IPA’s 5/15 Model is now being used successfully by the Victrex UK Employee Forum and has become business as usual for both representatives and managers.

Harriet Molyneaux, Head of Digital Engagement at Hot Spots Movement noted that a change in the traditional workforce has, over the last few years, created a new deal between employers and talent. The rise of the employee voice has persuaded employers to understand staff priorities, engage in constructive dialogue and “harness the wisdom of the crowd”. This has changed the relationship at work from Parent to Child to Adult to Adult. Furthermore, social media has changed the focus of staff from a negative and reactive position to one that is proactive, constructive and future-orientated. Rachel Pinto, from Acas, emphasised the need for rigorous planning, structure and training if any employee voice mechanism is to be successful.     

A number of key issues were discussed and will continue to be discussed at further regular meetings. These included:

• How do we engage middle managers?
• How does an employee forum contribute to setting business objectives?
• How can Senior Managers be persuaded to support their representatives?
• How do you demonstrate the return on this investment?

The day re-iterated a number of key messages. It was acknowledged that an Employee Voice can only be effective if:

• It is informed
• Representatives are trained, developed and supported
• It is proactive
• It is adult to adult
• It is seen to make a day to day difference
• It influences change
• People feel free to contribute

It is equally clear that representatives of all types need the support of a network like this to ensure they can make all of these criteria happen.

If you want more information about our new Hub for Representatives, please contact me:

[email protected]

07780 697024

The below article is a summary of the full discussion paper published by the IPA and Progress, which can be found here.

In 2016, despite the record high employment figures, the United Kingdom workforce faces an uncertain future. I am not simply referring to Brexit – although a cause of concern for many, it is only the most visible of a series of factors which threaten to throw into doubt much of what we take for granted about working life in the UK. Slower moving but perhaps in the end more important are two emerging macro-trends; the rise of atypical working arrangements and the growth of disruptive new forms of technology that have the potential to change the nature of work itself.

To start with the atypical working, it is really several, related but distinct trends. Remote working, self-employment and part-time employment in the UK have all reached record highs in the past few years. The rate of change appears to be accelerating too – the share of the workforce which is self-employed has risen more since 2008 than in the previous 30 years before that. At its extreme, this takes the form of the emerging ‘gig economy’, where many independent contractors move between short-term engagements – often depending on intermediary platforms such as Uber, Airbnb or TaskRabbit.

This trend brings with it certain advantages; more flexibility and autonomy for employees, low barriers for new entrants and a highly competitive market for consumers. On the other hand the transition from being an employee to a contractor means the loss of many employment rights, including sick pay, holiday pay and job security. Contractors are responsible for their own training and skills. They are not unionised and benefit from no collective bargaining arrangements. All this poses a real challenge to the traditional model of workplace relations, particularly for those who want to protect workers’ rights and promote employee engagement.

Of course, the growth of the ‘gig economy’ and remote working wouldn’t be possible at all without the second of these macro-trends; the spread of new workplace technology. From IBM’s Watson learning to diagnose cancers to Amazon’s automated warehouse picking robots, human workers increasingly find themselves working alongside and around machines rather than fellow humans. In the short term, this poses challenges around dehumanization and disengagement from work when such technologies are introduced (though in some cases technology can also free human workers from drudgery and increase their engagement). In the longer term, it threatens to further erode the bargaining power of labour vs capital in our economy and could lead growing inequality and unemployment.

Finally we return to the third major source of uncertainty for the UK workforce – Brexit. Not a trend so much as a sudden shock – and one we are yet to really feel. At the moment it is rather like a waterfall approaching in the distance; we can hear the roar, know its inevitability, but are yet to see the size and shape of it or what the river might look like on the other side. And there are reasons to fear it will not be good for workers. David Davis may have stated that he has no inclination to repeal most current workplace rights, but once the UK is no longer subject to European Union law that door will always be open for future governments. As for which regulations are most likely to disappear, areas such as the agency workers regulations are top of the list – precisely the areas that need more rather than less attention, given the other trends described above. The time is now for serious thinking about what we want the future of work to look like.

Patrick Briône is Head of Policy & Research at the IPA

Productivity may be essential to economic growth, wage increases and living standards, but it is often seen as too complex and remote a topic to discuss directly with employees. Yet a study by the Smith Institute for a group of trade unions published earlier this year suggests that employees both see productivity as important and have a wealth of views on how it could be improved.

More than 7,500 members of Prospect, Bectu, Usdaw, Community, the Association of Teachers and Lecturers, the FDA and the Society of Radiographers took part in a survey on productivity in their workplace. A large proportion of respondents (46%) were from the retail sector, but the survey received responses from workers across the private and public sectors, plus a smaller number of manufacturing workers.

The vast majority of those surveyed both thought productivity was important or very important to the organisation they worked for (89%) and considered that they knew a little or a lot about their organisation’s approach to productivity (81%). They were hugely positive about the role of technology in meeting the productivity challenge. There were real concerns (especially in manufacturing and retail) about robots replacing jobs, but overall, technology was seen as more of an opportunity than a threat.

Yet the survey suggests that employees feel pessimistic that drives to increase productivity are more likely to result in higher work intensity than working smarter. Asked what changes they thought the drive for higher productivity would result in for them, the top responses were working harder and reduced staff numbers. 

Asked about perceived changes to both work intensity and productivity over the past two years, a majority (68%) felt that they were working harder while half (49%) thought that they were working more productively. Looking at these two measures together, however, few (13%) reported being more productive without working harder, suggesting that only a small minority feel that higher productivity has resulted from working smarter, not just harder. This message came across most strongly in retail, where some staff detailed the metrics used at their stores and warehouses and reported a ratcheting-up effect, with targets becoming harder and harder to meet once achieved, with a perceived negative effect on staff wellbeing and – some employees argued – customer service.

So what do employees think would increase productivity in a more sustainable way? Unsurprisingly, many ideas were highly sector-specific, whether to stress the key role of technology for NHS radiographers, tackling long hours in broadcasting or better longer-term planning and leadership in nuclear energy. We know that there is no silver bullet to boost productivity: employees thought that more effective management, investing in technology and better training and development, for example, all played their part. Management quality and skills were seen as hugely important. But one message came across loud and clear from all sectors: the need for organisations and managers to listen to their employees, both individually and collectively.  Employees believe their organisations could be more productive if managers better listened to, engaged and involved the workforce to a greater degree in how decisions are made, work is organised and results delivered. As one employee said: “Keep people in the loop and not in the dark.”

Findings from the survey illustrate that employees rarely have full confidence that their employer will listen to what they have to say. When asked whether their employer listened to employee suggestions for workplace productivity improvements, half (50%) reported that this was sometimes the case but only 14% thought that it was always the case (only 9% in retail). There was also an employee involvement gap around technology, with only one in four employees (24%) agreeing with the statement: “My employer gives me a say on how technology impacts my work.” Civil servants in particular wanted to see far greater investment in technology but complained that often investment was wasted through a failure to “engage with the people who will be using the technology before they buy it.”

Too many employees see productivity as essentially being asked to work harder for the same or lower reward and suspect that job losses may result. In contrast, they want an approach to productivity that is focused on delivering quality and value for the longer term through skills and innovation, underpinned by meaningful employee involvement as well as fair reward. By seeking to understand better the employee perspective on productivity, it is hoped that this report will be useful in informing the workplace debate over what kind of productivity the UK is seeking to grow and how we go about it.

Sarah Welfare is a Research Fellow of the Smith Institute.

Theresa May indicates new direction on industrial strategy

In the only speech of her leadership campaign this month, shortly before becoming Prime Minister, Theresa May outlined her vision of a “country that works for everyone”, with strong indicators of a change in direction for industrial and economic policy in the UK.

She identified productivity as one of the key challenges facing Britain today, saying that “I want to make its improvement an important objective for the Treasury”. In line with research by the IPA and others, she identified employee involvement as a vital plank in this drive towards greater productivity, as part of which she pledged to introduce widespread employee representation on company boards.

This announcement has proved controversial with some big business leaders branding it as “unworkable”, but has been broadly welcomed by organisations such as the IPA who have long advocated a greater role for employees in corporate governance. Theresa May also pledged to crack-down on excessive boardroom pay by introducing binding shareholder votes on pay and greater transparency over pay ratios.

Since taking over in Downing Street, the new Prime Minister has taken further steps to signal a change of direction, with the rebranding of the Department for Business, Energy and Skills as the Department for Business, Energy and Industrial Strategy and installing and the installation of Greg Clark as the new Secretary of State are clear signs that the government intends to pursue a more active approach to business and industrial policy than its predecessor. Time will tell if this positive rhetoric and signalling is borne out by concrete policies and actions to boost employee involvement, engagement and productivity in the UK.

Unconscious bias and ‘the ethnicity gap’

A recent study of 130 minority ethnic senior executive and board leaders by the networking group ‘Engage’ and recruitment firm ‘Harvey Nash’ found that 63 per cent believe unconscious bias of CEOs and leadership teams is one of the leading reasons why there is very little progress in terms of ethnic diversity at board level. Furthermore, 38 per cent of respondents believe that ethnic bias is part of society’s ‘wider culture’ while 1 in 4 believe that bias and discrimination are part of organisational culture. 2 in 3 believe that minority ethnic executives are not in the talent pools or networks of the current non-executive directors and executives or of executive search firms while 7 in 10 felt that their ethnicity/cultural background has been a significant barrier to their progression.

Responding to the findings, Denise Keating, chief executive of the Employers Network for Equality and Inclusion (enei), said: “Organisations with a lack of board diversity need to find out what is really happening, and set standards to achieve progress…this includes using staff surveys, networks and focus groups to get feedback, and developing action plans to address them at every level in the organisation.”

‘UK lagging behind other counties in digital skills’ – Barclays

A report by Barclays looking at digital education, skills and confidence around the world found that nearly a third (31 per cent) of working-age adults in the UK lack basic digital problem-solving skills. This is below the average (37 per cent) across the OECD countries. Worryingly, only 38 per cent of UK employers offer their workers some form of digital skills training.

While Estonia and South Korea are leading in ‘digital empowerment,’ (‘the ability and desire to use one’s digital skills to work productively and creatively, and to have the opportunity to continually upgrade them to keep pace with changing technology’), the UK came fourth in the ranking, following Sweden in third place. China and the USA tied for fifth place, and India, Germany, Brazil and South Africa ranked in the top 10.

Ashok Vaswani, CEO of Barclays UK, said that organisations must ensure that their employees have the knowledge, tools and resources in place to keep pace with the rapid technological changes. “Not even the industrial revolution was as transformative as the coming digital age,” he said. “We can already glimpse the extent of this change in the way we order a taxi, do our shopping or book a holiday – and this is only the beginning.”