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Retaining Valuable Workers

The importance of retaining older people in the workforce has been widely recognised as an EU policy goal and is linked to a wide range of economic and social benefits relating to knowledge and skills, financial security, health and social inclusion.

There is also long-established evidence that health, job satisfaction and engagement are enhanced when employees are empowered and respected at work. A recently established project, ‘Workage’, suggests that these factors also influence the retirement decisions of older workers.

Workage is a three year EU-funded project testing the proposition that the engagement and retention of employees aged 50+ will be improved by enhancing employee voice and empowering workplace practices for everyone.  It focuses on removing obstacles to achieving a healthy and productive workforce.  It asks: “What engages you to the organization?  What disengages you?

The project aims to raise policymakers’ and employers’ awareness by demonstrating that targeted workplace interventions to improve job design and work organisation will facilitate enhanced engagement and retention of older workers.

The research is predicated on the knowledge that some older workers start to lose enthusiasm for their job in their final years of employment and may even bring their retirement plans forward as a result. It aims to develop new strategies to help organisations re-engage with their older employees to the benefit of both the organisation and the individual.

Workage is facilitating the transformation of work practices and cultures in two pilot sites: the maternity service in the Southern Health & Social Care Trust, Northern Ireland, and the Place Division, Stoke on Trent City Council.

Interventions are focused on job design, self-organised teamworking, continuous improvement, high involvement innovation, workplace partnership and employee voice in strategic decision making.

The carefully measured outcomes will be of considerable interest to policymakers, employers, trade unions, researchers and others across Europe with an interest in active ageing, employee engagement, workforce health and workplace innovation. 

The Workage partnership led by Nottingham Trent University and Workplace Innovation Limited, part of the UK Work Organisation Network (UK WON) includes a wide range of expert organisations, social partners including trade unions and policymakers ensuring widespread dissemination of project outcomes.

Updates based on early findings will be available in the summer. If you are interested in finding out more, have experiences to share or would like to contribute to on line discussions, please get in touch via www.workage.eu .  

 

Employee Ownership In Britain Today

Employee ownership (EO) is an increasingly important form of company ownership in Britain.  Employee-owned firms are now found in many sectors, including retail/wholesale, ancillary health services, social care, business consultancy, and manufacturing.  The development of employee ownership has escalated since 2010, and we estimate there are 300-400 firms with substantial employee ownership (defined in the report as 25 per cent or more ownership by all or most employees). 

Three main structures of employee ownership are found in Britain.  The first is a trust-based model, exemplified by the John Lewis Partnership.  Here ownership is vested in an Employee Benefits Trust (EBT) acting on behalf of the employees.  The second is where ownership is held directly by employees, who either purchase or are granted shares in the company.  The third is a hybrid of trust and direct share ownership.  As in the US ESOP, shares are often initially held in trust and then passed to employees over time (often using a Share Incentive Plan). 

A variant of direct ownership is the membership model whereby employees become members of the company by each purchasing a single share.  This is found in workers’ co-operatives and the public service ‘spin-outs’ from government, local government, and the National Health Service.  In some instances, service users also become members.  For instance, Explore – the spin-out of library services from the City of York Council – will become two-thirds owned by members of the community and one-third by its staff. 

In our survey 23 per cent of EO companies use an EBT, 40 per cent use direct share purchases or allocations by employees, and 37 per cent use a combination of an EBT and individual, directly-owned shares.  The average level of EO is 83 per cent. 

The choice of the most appropriate ownership structure is a source of continuing debate.  Advantages of the trust-based model include a low reliance on employee wealth and liquidity for ownership conversion, and a lower level of risk for employees.  It may also contribute to greater sustainability of employee ownership.  Against this, advocates of direct ownership argue that individual share ownership promotes more responsible and meaningful ownership.  The hybrid model may embody the best of both worlds.              

The survey shows four main contexts in which employee ownership is typically created: business succession (31 per cent of cases), privatisation (22 per cent), a concern to share ownership where human capital is especially valuable (26 per cent), and start-ups (21 per cent).  No rescue conversions are observed in our survey: this reflects the profound barriers to creating employee ownership when firms are in distress.   

Why has employee ownership become more prevalent?  The answer lies in a combination of long-term contextual developments and more short-term factors.   Political support for employee ownership is clearly a major influence amongst the latter. 

Longer-term factors favouring employee ownership include the shift from manufacturing to services in advanced industrial economies.  This has favoured the development of firms that are rich in human capital and less dependent on physical assets for the generation of value.  Firms dependent on human capital need to attract, retain, and develop high quality human resources to achieve competitive advantage.  It is notable that employee ownership is spreading amongst ‘human capital’ firms providing business consultancy, architecture, and engineering design services, with some world-leading firms such as Arup owned by or on behalf of their employees. 

A second development is increasing economic and employment insecurity.  Globalisation, competition, and deregulation have made it increasingly difficult for firms to offer the implicit guarantees of long-term employment, career progression, and social benefits that became common after the Second World War.   But how can firms achieve employee commitment, more important than ever given the growing dependence on human capital, when less can be committed in return.   Employee ownership signals commitment by companies to their employees by providing participation in profits and control (Pendleton and Robinson 2011).

Government policy initiatives have a clear influence on the extent of employee ownership.  In 2012 the Government initiated a major review (the ‘Nuttall Review’) of employee ownership to consider the barriers to employee ownership (Nuttall 2012).  This led to a series of measures in Finance Act 2014 promoting trust-based forms of EO.    Owners selling 50 per cent or more of their company to an Employee Ownership Trust were exempted from capital gains tax, whilst firms with at least 50 per cent trust ownership became able to award tax-exempt profit shares to employees. 

Privatisation is the other main government activity that has stimulated employee ownership.  Recent privatisation initiatives, implemented by the Conservative-Liberal Coalition Government from 2010 but initiated by the Labour Government preceding it, have involved divestment of local authority, national government, and National Health Service activities into ‘public service mutuals’.  Over 100 ‘mutuals’ have now been spun-out.  Examples include children’s social care, youth services, and libraries, as well as healthcare.   

Although all major political parties support employee ownership, policy initiatives by the Coalition Government are unprecedented.  They are perhaps best explained by competition between the two government parties, with the Liberal Party keen to implement policies that give it a distinct identity within a government in which it is a minority member.   Policy experts, lobbyists, and ‘flagship’ employee-owned firms, aided by ‘policy entrepreneurs’ in the employee ownership community, have been able to exploit this competition to push employee ownership further onto the political agenda.

References

Nuttall, G. (2012).  Sharing Success: The Nuttall Review of Employee Ownership.  London: Department of Business, Innovation, and Skills.

Pendleton, A. and Robinson, A. (2011) ‘Employee share ownership and human capital development: complementarity in theory and practice’, Economic and Industrial Democracy 32 (3): 439-458.

The report can be downloaded from www.wreoc.org  If you work for an employee-owned firm and would like to participate in the survey please contact [email protected] or [email protected]

 

Diverse Voices – Engaging employees in a diverse workforce

There is a growing body of evidence demonstrating the importance of employee engagement. This was in part driven by the MacLeod report ‘Engaging for Success’ of 2009, which argued that employee engagement was absolutely fundamental for organizational success. The report put forward four enablers of employee engagement – strategic narrative, engaging managers, employee voice and integrity – that were “commonly agreed to lie behind successful engagement approaches.”

There has also been an increasing focus on equality, diversity and inclusion in recent years. This has been driven both by a willingness to do the right thing, by legislation and by a desire to protect organisational reputation and brand. But organisations are gradually seeing that as potential in people previously discriminated against in work is released, diversity and difference has a greater power beyond to drive performance.

As part of the study, we’ve taken a look at how engagement varies across different groups in the workforce using the 2011 Workplace Employee Relations Study (WERS). We looked at the questions relating to engagement, particularly the four enablers, as well as the outcomes commonly associated with engagement. It showed some significant disparities across groups. 

Despite facing labour market disadvantage and barriers to workplace equality, women appear to be far more engaged than men. They are more likely to share the organisation’s values by 68.9% to 61.9% and are more positive about the manager-employee relationship by 65.1% to 57.6%. Women are more trusting of management, they feel more loyal to the organisation and they get more of a sense of achievement at work. The only area in which they are less satisfied is ‘employee voice’ where 46.8% of women feel their views are sought compared to 52.2% of men. There are some interesting findings in terms of age. Younger employees scored higher on the engagement index, with engagement progressively decreasing with age until the former default retirement age of 65 from where it rose sharply. It also appears that disabled employees are far less engaged than those without disabilities. There were no significant variations to be found in terms of ethnicity, religious believe and sexual orientation. We are also conducting a large scale employer survey to understand more about how engagement varies in the workplace, and how organisations approach employee engagement and equality and diversity.

So how are we to explain these significant gaps in terms of engagement between different groups? We have investigated various factors including varying drivers of engagement, flexible working and discrimination at work that might explain these gaps in engagement.

What is clear is that employers need to ensure that they are measuring engagement in their organisation, and taking action to address any gaps. Employers need also to build a diverse and inclusive organisational culture, which helps all employees feel engaged and achieve their potential. We also discuss the important role of senior leaders and line managers in supporting a diverse and inclusive work force. Full findings from the report will be discussed at the launch event on the 2nd of June.

We would like to thank our sponsors, NHS Employers, First Group, DHL, Ernst and Young and Lloyds Bank for supporting this work.

We would be grateful if readers could complete our short survey on employee engagement and diversity and inclusion. As an additional incentive, respondents will also be entered into a prize draw for £50 work of shopping vouchers.

If you would like to find out more about the research or to get involved, please contact Ramya Yarlagadda – [email protected] – 0207 759 1005

 

NHS Success Story – Employee engagement on the rise

‘NHS Success Story.’ Not a headline you see very often but the results of the NHS Staff Survey 2013 show that the NHS is making progress on staff involvement. The NHS Staff Survey is the largest survey of staff opinion in the world involving over 200 000 staff. It asks a range of questions on how staff feel they are being treated and their view of NHS services. The results of the survey are measured on 28 Key Findings related to the NHS Staff Pledges and other national objectives. 21 out of 28 key findings improved and in particular the measures of staff engagement in the service increased. This follows increases in 2012 and comes in the context of financial pressures and rising workload. Strangely this positive story about the NHS generated almost no national media coverage…

Staff Engagement in the NHS-moving in the right direction

Staff Engagement in the NHS is measured in the staff survey using a composite measure that takes into account worker motivation/satisfaction, degree of involvement and willingness to recommend the service (advocacy). Levels of staff engagement improved in all three dimensions with the fastest improvement in advocacy. The indicators are derived from a number of questions which are generally measured on a five point scale (ranging from strongly agree to strongly disagree). This is considered a reliable and methodologically valid approach to assessing engagement. The survey questions are developed in discussion between NHS employers and staff side representatives together with NHS England, which has overall responsibility for the survey. The surveys are undertaken by a number of survey companies working for the NHS and replies are confidential.

The NHS has traditionally had high levels of job commitment amongst its workforce and this has remained true in the 2013 survey with 90% of staff feeling that their role makes a difference for patients. The indicator of work pressure remained steady as did levels of motivation. Perhaps surprisingly job satisfaction even increased during the period from 3.58 to 3.61

The NHS is committed via one of the NHS Constitution Staff Pledges, to enabling staff to be involved in decisions affecting their working lives. There are various measures of involvement in the staff survey. The overall measure of involvement improved slightly from 67 to 68% although the scores were much better for involvement in ward level decisions rather than wider decisions. Staff felt more able to make suggestions for improvement but still did not feel properly consulted about change. It is also clear that there is considerable variation on this indicator between organisations. Those employers that have had a focus on involvement of staff through initiatives or changing culture managed to improve their scores. In some areas for example Wigan and Leigh, Countess of Chester and Nottingham University Hospitals’ staff involvement has helped the Trust generate considerable savings as part of overall programmes. There is though much untapped potential for this as has been shown by the success of NHS Change Day.

Overall perception of communication between senior managers and staff in trusts remained poor with only 29% reporting good communication although this was an improvement from 2012. Many Trusts have improved visibility of senior leaders through “back to the floor” initiatives or face to face discussions and some have begun to use social media as an effective communication tool.

There was a clear positive link between good Partnership Working with Staff Side organisations, and good staff engagement scores in areas such as Guys and St Thomas Hospital, South West Yorkshire and Oxleas Trusts.

There were mixed scores on the line managers’ role. The overall score for line manager support increased from 3.63 to 3.66. Line managers are seen as generally supportive in a personal crisis but not as good at seeking and acting on feedback. There are a range of initiatives underway or planned aimed at improving line manager capacity in these areas.

Whether staff in the NHS would recommend the service has become seen an increasingly important indicator of engagement. The scores on this improved both in terms of recommendation as a place to work (54 to 57%) and a place to be treated 62 to 64%. Overall 10% would not recommend and the remainder were neutral though these figures were poorer in a significant minority of Trusts. From April this year this will now be measured in a different way through a Staff Friends and Family Test. The increase in staff perception of quality of care, these scores and improvements on other measures are a major vote of confidence in the NHS from NHS staff.

 

Steven Weeks is Policy Manager at NHS Employers

 

The IPA are due to release a major project for NHS Employers and HPMA on employee engagement in the NHS. Find out more and sign up for the launch event on our website – www.ipa-involve.com/events

News in Brief February 2015

Poor relationship with manager driving employees to change employer 

The 2014 Towers Watson Global Workforce Study revealed that a third of the UK workforce is likely to leave their current employer in the next two years because of the poor relationship they have with their line manager.

The study, which covers more than 32,000 employees, including 1,863 from the UK revealed that managers often struggle to coach employees, and a quarter fail to accurately evaluate performance in personal development reviews. Although individuals surveyed recognised the managers faced certain challenges in carrying out their roles, 37 per cent said their manager didn’t have enough time to handle the people aspects of management and that this was having a negative impact on the wellbeing for UK workers.

However, when managers were asked the same questions, many said they were not being empowered in their role to deliver effective management – with 21 per cent saying they did not find the online tools and resources provided to help them manage direct reports and just half of them said they had access to information required to update team members of key organisational changes. Radha Chakraborty, UK leader, talent management and organisational alignment at Towers Watson said: “Time and resource pressures are an ongoing theme for UK PLC but implementing efficient and clear processes, as well as equipping managers with the right technology, can help them to improve the working environment for their team members.”

 

The role and future of HR

A recent report by CIPD showed that HR professionals are not developing the right skills to cope with changing operating models. This is despite the fact that almost half of HR departments have been restructured to support a more strategic business approach. Although the role of the HR business partner had become more prevalent in recent years, the latest report suggests the HR professionals need greater specialist skills such as commercial acumen and data analysis to bring value to their organisation. According to the findings, ‘working with the organisation to drive change’ was the most important area for HR to focus on in 2015, but just 76 per cent said that HR understands how the organisation works and how people practices influence the value chain.

The Institute for Employment Studies (IES) came up with similar findings in their annual ‘Perspectives on HR’ study, which urged the HR function to think about replacing more established way of managing change with ‘evolving and fluid approaches’.

Embracing HR analytics and capitalising on the data was another challenge mentioned at the HR Directors Business Summit in Birmingham. HR consultancy Mercer spoke of the importance of handling data to prepare for an increasingly disjointed workforce. Charlotte Harding, Human Capital Project Manager at Mercer said: “We know that the future workforce will be highly fragmented, but we don’t know what capacity this workforce will work in, or in what direction organisations will go”. She also mentioned that analysing people data would help employers focus on the roles and skills needed in future, and that this should form part of every HR professional’s strategic workforce planning.

Unemployment rate at its lowest as calls for increase in wages and inclusive prosperity grow

The UK unemployment rate fell to its lowest levels since 2008 with a record 30.9 million in work, and the unemployment rate at 5.7 per cent. Latest figures from the Office for National Statistics show that the number of working women is also at a record high of 14.47 million.

However, despite evidence that the squeeze on wages is gradually improving, the latest CIPD Labour Market Outlook (LMO) report shows that 42 per cent of UK employees received no wage increase in 2014 and almost two-fifths faced pay freezes last year, while 3 per cent of the UK workforce had their pay cut.

As the general election campaign heated up, David Cameron called on businesses to boost worker pay to make sure that “economic success [is not just] shown in the GDP figures or on the balance sheets of British businesses, but in people’s pay packets and bank accounts and lifestyles.” Labour leader Ed Miliband also called for “fairer distribution of wealth” to boost UK productivity levels. But, Gerwyn Davies, labour market analyst for the CIPD said: “the role for government is not to cajole business into giving more generous pay awards on the back of stronger economic growth and lower costs, but to understand the levers that can help more firms increase their workplace productivity and move up the quality chain.”

NHS Staff Survey 2014-Progress under pressure

The NHS – and its workforce- are facing increasing pressure as the funding squeeze continues. In this article, Steven Weeks of NHS Employers analyses the results of the NHS Staff Survey – the biggest of its kind in Europe. He finds that the picture is mixed; whereas recent progress on employee engagement has stalled in the face of growing pressures for the service, there has still been progress in some important areas.

The NHS staff survey 2014 results were released on 24th February. The survey is the largest of its kind in Europe and surveyed 600 000 NHS staff with 255 000 responses. It is fully confidential with the surveys undertaken by recognised survey providers working with a survey designed by NHS England, NHS Employers and staff side. Individual organisations get their own aggregate results and analysis of trends to take into account in their employment policy.

The results present a challenging picture after a period of sustained progress. The Survey tracks 30 key findings in areas ranging from staff perception of quality of care to views on staff experience in areas such as health and well-being and staff engagement.  This year 11 have shown improvement since 2013, 1 remained the same, 15 have deteriorated and 2 cannot be compared due to changes in the questions. This follows several years of consistent progress across most survey indicators. For example in 2014 all bar three indicators improved. The movements were relatively small on most indicators.

The results reflect the pressure on NHS Staff with the indicator of work pressure rising from 3.06 to 3.09. This together with the discontent over the 2014 pay offer and other negative factors appears to have had an impact on scores. In addition financial problems in a significant minority of Trusts are an additional factor.

Quality of care

Following the Francis report around the Mid Staffordshire scandal there has been a lot of work to safeguard quality in the NHS. The survey shows a mixed picture on this. There has been an improvement in the staff confidence in patient care being the top priority for organisations. Staff remain very confident about the quality of care they provide individually. They are however less willing to recommend the care delivered by their organization. The percentage willing to do so fell from 65% to 64% perhaps reflecting the pressures on the service.

Health and Well Being

There is a mixed picture on health and well being. Levels of reported physical violence from patients fell as did the reported level of bullying and harassment. By contrast the percentage reporting bullying and harassment by colleagues and managers rose (from 23.20 to 23.68 %) which is cause of concern. Perhaps reflecting the work pressure in the service there was an increase in the percentage of staff reporting stress related illness and attending work when unwell. In the main the pressure to do so came from their own commitment to patients and colleagues rather than from managers.

Staff Engagement

The overall staff engagement index slipped from 3.71 to 3.70 following three years of improvement. The overall score is derived from measures of the three dimensions of engagement (satisfaction/motivation, advocacy and involvement). There was a small fall in measures of motivation and satisfaction perhaps reflecting the demands on the service. The unhappiness of staff over pay issues may have influenced the fall in willingness to recommend the NHS as a place to work which fell from 58% to 56 %. By contrast on measures of staff involvement the NHS has maintained or improved its position reflecting the work in many Trusts to seek staff feedback and use staff ideas. Staff feel most able to make and implement contributions in their own work area with 75% reporting that they are able to do so (up from 74% in 2013). Some organisations – including most of those identified as top performers by the IPA in its May 2014 report on engagement in the NHS – improved their scores despite the wider pressures. NHS Employers will be seeking to identify and share experience including from rapid improvers.

Staff also reported an improvement in the level of support that they feel they get from their immediate managers (the index score on this rose from 3.66 to 3.68. There were less positive rating of senior managers although scores on this had also improved perhaps reflecting the efforts by some senior leaders to be more visible and open.

Raising concerns a concern

There has been a lot of media attention about the issue of staff raising concerns in the NHS (sometimes known as whistleblowing). A new question was introduced on the survey to focus on raising concern about unsafe clinical practice. Almost two thirds of staff stay they would feel safe to do so. One in ten would not and rest did not give a view. There is clearly a need for further work on this issue and NHS Employers will shortly be launching a campaign to raise awareness on this and share best practice.

Other issues

The survey covers a range of others issue from training and appraisal (small improvement) to equalities (overall a good record but differential experience for BME and a clear issue on which more action is needed) through to communication (an improvement from a very low base) to staffing levels (not seen as adequate) and pay (most staff satisfied but rise in dissatisfaction). Individual employers will identify action plans locally to tackle key issues. It is also now used as a key indicator of potential quality issues as research has shown a clear link between staff and patient experience.

Overall the results are a challenge to the service to sustain the progress that has been made in recent years in an ever tougher environment. NHS Employers will work with staff side colleagues to seek to sustain progress, get back on track in some key areas and improve staff experience with the aim of safeguarding patient care.

Steven Weeks is Policy Manager for Staff Engagement at NHS Employers.

Striking the balance – Employment regulation and the labour market

There seems to be a perpetual debate on the correct level of employment regulation. Do working people need more protection to redress the power imbalance? Or are British businesses over-burdened by excessive levels of ‘red tape’. Recent research commissioned by the CIPD finds that the level of employment regulation in the UK is just about right, and there are unlikely to be significant benefits from either introducing more, or from cutting it back. Here, Ben Willmott, Head of Public Policy at CIPD argues that instead of fixating on employment regulation, we should focus instead on improving workplace practices and raising awareness of existing rights.

As we approach the next election one of the perennial battlegrounds will be over the UK employment rights framework and the extent to which it provides the right balance in providing flexibility for employers and job and economic security for individuals.

Those on one side of the argument believe that the UK employment market remains over-regulated and is an obstacle to economic growth, while those to on the other, claim that there is an increasing trend towards the casualisation of jobs, characterised, for example, by an increase in zero hours contracts, which is undermining people’s economic security and wellbeing.

The reality, according to new research commissioned by the CIPD and conducted by Ian Brinkley, chief economist at the Work Foundation, lies somewhere in between. Employment Regulation and the Labour Market is based on an analysis of OECD and EU data looking at:

  • economic and labour market statistical measures across the OECD and the EU, including productivity, employment rates, working hours, the extent of low pay and unemployment measures
  • composite indicators developed by the OECD to measure job quality, job strain and labour market insecurity
  • European employee surveys covering worker perceptions of job quality and job security.

 

A useful starting point when assessing the UK’s employment rights framework is the issue of employment protection. Overall the UK scores low on the protection of individuals, along with other Anglo Saxon economies such as Canada and the US. In contrast, protection is significantly higher in Germany, Italy and France. The same contrast is also true for temporary work, with very strict regulation in Spain, France and Italy and very light regulation in the US, Canada and the UK.

Protection against collective dismissal in the UK is comparatively stronger but still below the OECD average.

However despite the comparatively low level of employment protection in the UK, workers don’t seem much more fearful of losing their jobs than workers in countries with stricter employment protections (12-14% across UK, Germany, France and Italy) and 43% of UK workers agreed they would be able to find another job at a similar wage compared to 40% in France, 30% in Italy and 24% in Germany.

The quality of employment overall in the UK also compares more favourably with other countries than is often thought to be the case.  For example, in comparison to other OECD countries, the UK has a high share of permanent employment – 79% of UK workers in 2013 were on a permanent contract, compared to 77% in Germany and 65% in Italy. In addition, compared with the European average, the UK has a larger proportion of ‘good’ jobs and a smaller proportion of ‘low quality’ jobs. Overall 65% of jobs in the UK are rated as good jobs, compared to just 54% in Italy, 50% in France and 49% in Germany.

Workers in the UK are also on average no more likely than elsewhere in the OECD to work long hours. The average weekly hours worked by employees in the UK in 2013 was 36, which was in line with the OECD average, although the UK does have a comparatively high proportion of long hours jobs (those involving 50 hours or more a week) with 12% falling into this category. Nonetheless, 84% of UK workers say they are satisfied with their working hours (EU 28 average 80%) and 77% report they are satisfied with their work-life balance (EU 28 average 74%).

Another perhaps unexpected finding is that UK workers are more likely than the EU average to agree they are consulted before targets are set at work and that they are able to influence important decisions for their work. However some caution about interpretation is needed given the very different workplace context and consultation structures.

While the research suggests the UK performs well overall, it performs comparatively poorly in three important areas – productivity, low pay and the integration of young people into the labour market.

The issue of productivity is under the spotlight in the UK because productivity levels have stagnated and compare poorly to our main competitors. Of course this is a hugely complex issue but our research suggests that the level of employment regulation is likely to have little relationship to productivity levels. It is not obvious that being a lightly regulated labour market is associated with faster productivity growth relative to the United States. Comparing 1985 and 2013, relative productivity compared with the US fell in New Zealand, Canada and the UK and remained about the same in Australia. Among the more highly regulated economies, relative productivity fell in Italy and increased slightly in Germany and France.

Low pay is another area where the UK scores badly on international comparisons. While the UK doesn’t have the highest share of low-paid jobs in the OECD, it does sit uncomfortably in the top quarter. The UK, US and Canada all have 20-25% of employment in low-paid work compared with 18% in Germany and 10% in Italy. There does seem to be a link between low pay and employment regulation with more regulated economies such as Spain, Greece and Spain having relatively few low-paid jobs typically 10-15% of total employment. However at the same time there seems to be an association between more restrictive labour markets and lower employment rates.

Finally, the UK also sits in the lower half among OECD countries in terms of its youth unemployment rate and in the bottom quartile among EU 28 countries on the youth unemployment ratio. Again, there seems little relationship between the level of employment regulation and youth employment levels.

The overall finding from the research is that the UK is highly unlikely to get much benefit from more employment regulation or from significant deregulation of the labour market, as it already performs well in comparison to many of its OECD counterparts on a number of measures. It’s clear that the UK struggles on productivity, low-pay and unemployment among young people, but the wider picture is much more positive. The link between the stringency of regulation and labour market outcomes such as productivity or job quality is in many areas either weak or complex and thus difficult to predict.

Instead, the CIPD is urging policymakers to focus efforts on improving productivity through a much stronger focus on improving workplace practices while increasing awareness of existing rights and enforcing them more effectively.

 The CIPD has suggested the creation of a Workplace Commission to help support a more strategic approach across government to developing policy on the workplace with the objective of improving productivity and enhancing job quality where poor practice exists. More broadly, there also needs to be a fundamental review of skills policy with a stronger focus on improving links between education and business, improving employer demand for investment in skills and improving how skills are utilised in the workplace, particularly among small and medium sized enterprises.

Ben Willmott is Head of Public Policy at CIPD

NHS staff survey results 2015 – Progress in staff engagement despite organisational pressures

The 2015 NHS Staff Survey results were released on 23rd February. The survey is the largest of its kind in Europe and surveyed over 741,000 NHS staff with 299,000 responses. It is fully confidential with the surveys undertaken by recognised survey providers working with a survey designed by NHS England, NHS Employers and staff side. Individual organisations get their own aggregate results and analysis of trends to take into account in their employment policy. In this article, Steven Weeks highlights important findings from the recent survey results.

The NHS Staff Survey released on the 23rd February shows progress in improving staff engagement in the NHS. This is despite the intense pressures on the service and widespread negative media coverage. The increase in engagement levels reflects the high levels of commitment of NHS staff and the sustained efforts by many NHS Trusts to improve involvement over the past year. 

The Staff engagement measure used by the NHS is a composite measure made up of indicators of motivation, levels of involvement and willingness to recommend the service. The overall level is measured on five point scale and rose from 3.71 in 2014 to 3.78 in 2015. The level of engagement is now at its highest since first introduced in 2011 when it was 3.61. There was a particular improvement in the motivation score which rose from 3.83 to 3.92 which is also the highest recorded. The overall indicator of involvement also rose from 3.85 in 2014 to 3.89 in 2015 (compared to 3.82 in 2011). 

The improvement in motivation levels is the most surprising given the pressures on the service. The motivation score is derived from questions on how far staff look forward to going to work and their overall work experience. It does reflect the high level of commitment staff have to their work and their identification with the NHS.

The improvements on involvement reflect the work in many Trusts to give staff more opportunities to share ideas and act on staff input. Examples of these approaches can be found on the NHS Employer website. The overall indicator looks at both individual level of responsibility where staff are generally satisfied and organisational involvement where there picture is more mixed. 69.8 per cent of staff feel able to contribute toward improvements at work (up from 68.1 per cent in 2014). Staff feel more able to share ideas with 75 per cent reporting that they are able to make suggestions for improvement. By contrast only 56 per cent feel they are able to make improvements happen. There is clearly though still scope for improvement as only 32 per cent feel senior management involve them in important decisions or act on feedback. 

There has been also been a recovery in the willingness of staff to recommend the NHS as a place to work. This rose to 59 per cent up from 56 per cent in 2014. 

There is a more mixed picture on other aspects of staff experience. Areas that improved included appraisal rates, confidence that the employer will deal with health and well-being issues and confidence to report concerns. By contrast staff felt under pressure, had concerns over staffing levels and experienced a high level of work related injuries. It is also a cause for concern that rates of bullying and harassment rose from 23.5 to 24.8 per cent and levels of reporting fell. NHS Employers will be working through the NHS Social Partnership Forum to tackle the issue of bullying. 

NHS Employers will be strengthening support for employers in improving staff engagement. In particular looking at how to spread best practice from improving organisations to those that face the greatest challenges and how to sustain staff engagement in the context of intensifying pressures on the service. 

Steven Weeks is a Policy Manager at NHS Employers.

 

News in Brief January 2015

NHS strike called off

UNISON suspended a planned strike action for its members in England after an improved offer from the government. The conciliatory offer made by the government is understood to include – a 1 per cent pay rise for staff up to band 8B which takes in senior nurses, lower paid staff to get an extra £200 a year in their salary, bottom level pay to be increased to £15,100 a year and a commitment from the government that the NHS Pay Review Body will contribute to make future recommendations on pay uplift for NHS staff in 2016/17. Cathy Warwick, Chief Executive of the Royal College of Midwives, said: “I am pleased the government came to the negotiating table to seek a solution” while Jeremy Hunt, Health Secretary said that the current offer doesn’t risk frontline jobs at NHS and that “the NHS pay bill will not increase next year”.

Meanwhile, London bus workers are set to stage three days of strikes next month in a dispute over pay. This comes after a recent 24 hour strike to campaign for a single agreement covering their pay, terms and conditions.

Talent shortages and the role of older people at work

New research by MetLife International showed that over a third (34 per cent) of UK companies will be affected by major talent shortages over the next year, while 42 per cent said that recruiting and retaining staff would be a major challenge. However, the role of older employees to address these talent shortages has gained prominence. Research by the Recruitment and Employment Confederation (REC) showed that businesses need to adjust the way they advertise jobs and provide training opportunities “or miss the best candidates in the over 55-age group.” 34 per cent of companies surveyed admitted that they should be providing more opportunities for older staff to upskill or reskill. Kevin Green, Chief Executive of the Recruitment and Employment Confederation, said: “The UK is suffering from skills shortages across the economy and at the same time businesses are telling us that they are at capacity and can’t take on more work without more staff”.

‘Human Capital Reporting – Investing for sustainable growth’

A new report by CIPD and CMI emphasize the importance of human capital management within companies for sustainable organisational performance. The report suggests a series of recommendations for both increasing the demand among investors for human capital management, and for improving practice among employers. This in turn, they say, “will ensure that more organisations generate, analyse and report on key HCM information to improve decision-making, justify investments in people, and demonstrate to external stakeholder they are led and managed for the long term.” A majority of respondents contacted for the report believed that companies reporting on HCM should be promoted and improved, and that “the materiality of HCM should be discussed in annual reports.”

Key issues for HR Managers and Leaders – IPA Survey

When we are talking to IPA members and clients who come to us needing support to develop employee engagement programmes in their organisations, we often discuss the importance of line and middle managers as either facilitators or, potentially, blockers of change.  It was reassuring then to find that UK organisations have identified up-skilling this group of employees as one of their top three challenges.

Our “Pulse Checker” survey which ran in the four weeks up to 19th December last year, asked respondents, who were human resource managers, directors and chief executives of organisations in both the public and private sectors, to indicate the top three challenges they are currently facing.  Across both sectors, “up-skilling line managers” featured in the top three challenges for 70 per cent of respondents, with “implementing organisational change” a close second with 65 per cent.   “Strengthening the leadership team” featured in the top three challenges of 30 per cent of organisations.

There was little difference between the public and private sectors – both identified the same top two challenges, but whilst “strengthening the leadership team” was an important challenge for 30 per cent of private and public sector respondents overall, “improving working relationships” scored higher in the private sector with 35 per cent putting this in their top three

IPA director and co-chair of Engaging for Success, Nita Clarke said of the survey results: “it is encouraging that organisations are recognising the importance of enhancing the skills of both their line and senior managers.  Engaging for Success, my review of employee engagement with David MacLeod, clearly showed that engaging managers are one of the four key enablers of employee engagement – alongside a strong and empowering leadership team.  For organisations undergoing change – which let’s face it, in current times is all organisations – investment in both is likely to pay dividends in delivering transformation.

However, the survey also found that over half of the organisations participating did not feel they had the internal resources to meet these challenges.  For Derek Luckhurst, IPA’s training and development director this vindicates the IPA’s continuing focus on developing training and consultancy programmes focussed on the four key enablers of engagement and designed to help deliver real organisational change.   Derek explains: “in addition to training and development for middle managers and senior leadership teams, we also have a successful track record of training employee representatives to deliver a robust and informed employee voice.  Supplementing this, we have recently launched a coaching and mentoring programme for leaders and managers, and training to equip them with the skills to coach their own teams.”

For more information about the IPA’s training and development services, please contact[email protected] or call on 020 7759 1000.

 

Engaging in the new world

As David MacLeod and I were writing our 2009 report Engaging for Success, there was a widespread view that engaging employees, while possibly an interesting workplace approach, was nevertheless a nice-to-do. Many leaders, if they thought about it at all, probably considered it was a typical HR soft and fluffy initiative, which had nothing to do with the hard bedrock of profitability and productivity that kept them awake at night.

But as the impact of the financial crisis hit all sectors of the economy, something began to change. It became clear that those organisations which engaged with their workforces in meeting the challenges of collapsing markets and the credit crunch – in manufacturing particularly, – stood a fighting chance of coming out of the recession on their feet, rather than their knees. There was an increasing realisation that perhaps tapping into the wisdom of the crowd – employees in this case – could help provide solutions to improving efficiency, improving customer relationships and finding new markets. And subsequently in the public sector, the herculean efforts made for example in local government to reconfigure services in the face of unprecedented financial pressures demonstrated clearly that deep engagement with staff could produce a positive outcome for services, even in the most difficult circumstances.

Today as the UK economy builds again, companies and organisations face a whole extra set of challenges, as the impact of the extraordinary changes in the global economy hit home. The pace of change, driven by increasing international competition is bewildering. New technology disrupts established industries at a breakneck pace – just look at the effect of the move to internet banking on employment in the financial sector; think of the likely effect of driverless cars on the automotive sector and drones for delivery on logistics; witness the impact of social media on taxi services, remote control operations and biotechnology on health case. At the same time, customers whether of public services or private utilities have become more demanding, less likely to be fobbed off with the argument ‘ but we’ve always done things like that’, or ‘we’re offshoring to increase our profitability’, even if the call centre drives customers to distraction.

In the face of the breakneck change, too many organisations are trying to run 21st century organisations on last century’s styles. Yet it has become crystal clear that the old view of how people behave at work, based on deference and trust, which command and control and carrot and stick management styles rely on, just does not hold water any more. Neuroscience tells us why these approaches backfire, because people will only embrace rather than resist change – and change their own behaviour – in an environment where it is safe to do so. In the immortal words of Daniel Kahneman: ‘the brains of humans contain a mechanism that is designed to give priority to bad news.’

People are no longer willing to hang their brains on the door when they come into work, they seek meaning and fulfilment, and if their organisation does not or cannot provide a deeper purpose in an authentic way than simply meeting the bills, many will walk to another that does. How telling that in the recent Sunday Times survey of the top 100 graduate employers voted for by graduates themselves, no less than 4 were public sector, with the Teach First programme in second place. Also in the top 10 were the NHS, the Civil Service and the BBC; service sector organisations (including PWC on the top spot) took up another 3 places and although Aldi and Google made the list, they were joined by Britain’s leading retail mutual, the John Lewis Partnership at number 10. Also making an appearance in its first year was Frontline, the new fast track scheme into social work. Hardly a ringing endorsement of our private sector from our future leaders. No wonder the CBI has embarked on a ground breaking campaign to restore trust in British business.

Of course this provides a tremendous opportunity for our public services to proudly proclaim their noble purpose, and place it front and centre in both their recruitment and their operations. Now is the time for public services to convert this in-built advantage of a strong story founded on meaning and purpose, into a prime engagement strategy with both employees and the communities being served.

And of course overlaid on all this complexity is the challenge of transparency with Glassdoor receiving over a million hits a month in the UK alone, and Twitter and Facebook open forums for real-time feedback, exposing the reality that can lie behind the corporate spin. It has become clear that reputational risk is the greatest danger facing even the mightiest organisations today, as the recent experience of Tesco demonstrates.

In this new world, employee engagement is a must have, not a nice to do. Deep engagement with employees, giving them a clear purpose aligned with the organisation, and space and opportunity to grow and flourish; managers and leaders who understand people and how to motivate them; employees with a respected and heeded voice about the work itself but also about the organisation’s strategy and future; and an organisational culture driven by values which are reflected in day to day behaviours, from the top to the bottom. These are some of the key elements that will change organisations from being composed of sullen, despondent and intermittently effective employees, to ones where people face the future with confidence. Remember, the world will not wait for us to get this message. For the sake of individuals at work, organisations themselves, and the UK economy and public sector, we need to start engaging now.

Nita Clarke OBE is the director of IPA and Co-Chair of the Employee Engagement Task Force.

 

News in Brief December 2014

Exodus of senior nurses from NHS

The Royal College of Nursing warns that an ageing working along with staff cuts has led to a dramatic fall in the number of senior nurses – which could have serious consequences for an already under-pressure NHS.

However, Dr Dan Poulter, Parliamentary Under Secretary of State at the Department of Health said that the Government had prioritised the NHS front line, and removed 21,000 administrators to pay for 13,000 more clinical staff. “In doing so [we have ensured] the NHS meets rising demand for patient care,” he said.

 

Spending cults risk further public sector jobs

According to the Office for Budget Responsibility (OBR),up to one million public sector jobs are to be cut under new plans set out by the Chancellor George Osborne in last week’s Autumn Statement.

The independent watchdog of the UK’s public finances found that spending on public services, administration and grants by central government is projected to fall from 21.2 per cent in 2009-10 to 12.6 per cent of GDP in 2019-20.

Analysis from the Institute for Fiscal Studies (IFS) confirmed the estimate by predicting that 1.1m general government jobs could go by 2018-19. Frances O’Grady, TUC General Secretary said that “the IFS report lays bare truth – the deficit is still here because the government failed on growth and wages. The Chancellor now wants us all to pay the price for his failure by cutting public services down to a stump with the loss of a million jobs.”

George Osborne argued that the spending cuts were “a price that works for our country,” and that they were part of a long-term plan to reduce the deficit.

 

Employees working remotely recognised as being more productive

The 2014 Global Evolving Workforce Study, which surveyed about 5,000 employees of small, medium and large organisations in 12 countries, found that perceptions of people who work outside the workplace have shifted.

More than half (52 per cent) of respondents reported their remote colleagues were equally or more productive than people based in the office. However, this perception was not the same in some of the countries surveyed – as 4 out of 10 employees in China, India, Turkey and UAE believed those working from home were less productive. Of those who spend any time working from home, half believed they were more productive there than in the office. Of the remaining 50 per cent, 36 per cent believed they were equally as productive at home as in the office, and only 14 per cent reported to be less productive.

There report showed clear benefits of working from home; 30 per cent slept more, 40 per cent drove less and 46 per cent of employees felt less stress, but negative outcomes of working from home were stated too. However, there were distractions from spouses, children, parents and pets in the home!

 

Start with line managers for employee engagement and wellbeing

Employee engagement and wellbeing are among the most important people outcomes in an organisation, as both have been linked to improved performance. Moreover, and perhaps more importantly, achieving both of those outcomes underpins the long-term health of an organisation. If employees are both engaged and well, they are likely to continue to deliver the results, ensuring sustainability of the business.

CIPD (2012) has previously demonstrated how important line manager behaviours are for supporting employee engagement and wellbeing, and have developed a framework of the impactful behaviours. Already about 9 in 10 organisations in the UK are investing in developing line manager capability (CIPD 2013). Yet, many continue to report that the application of managerial skills is not always visible in practice, suggesting that not all manager development translates into how line managers behave day-to-day (CIPD 2013).

A new report by Affinity Health at Work, sponsored by the CIPD, IOSH and the Affinity Health at Work Research Consortium, considered the factors that can either diminish or enhance the effectiveness of manager development programmes. To gather insights, it relied on a combination of sources in an ‘evidence-based approach’, taking into account both academic and practitioner literature, as well as consulting with those who develop and embed manager development programmes in practice.

The research recommends that in order to effectively develop line managers, who support employee engagement and wellbeing, practitioners are mindful of three aspects of the development programmes: 1) the training itself; 2) characteristics of managers who are expected to learn new skills and adopt new behaviours; and 3) the organisational context.

Programme design must be centred on clarity and consistency of messages, as well as relevance of the training content to the immediate line manager duties, as lack of opportunities to practise the newly learned skills is likely to decrease managers’ ability to apply those continuously. Crucially, the training should stress the accountability of line managers to apply learning: this includes taking pledges, taking part in discussion groups, mentoring each other, and seeking feedback from peers and their direct reports.

Individual manager characteristics, in particular, self-awareness and interest in learning, are also important. Managers who prioritise their personal development, and know their strengths and weaknesses, are likely to benefit the most. On the other hand, managers who are initially less engaged with the programme, learning in general, or are less self-aware managers will require preparation for the development course and/or more support throughout the training.

Finally – although not always seen within the scope of training programmes – organisational contextual factors must be addressed by the development programmes. Even where line managers have knowledge and skills to support employees, they sometimes struggle to behave accordingly, simply because the organisational structures and processes present them with contextual barriers, such as lack of empowerment, perverse incentives, and lack of clarity in the job design (CIPD 2014). As much as possible consistency between the programme messages and the organisational environment should be achieved, and supported by role-modelling from the top leadership team.

The range of factors that can either diminish or enhance manager learning call for a considered and systemic approach to designing, implementing and embedding manager development. Organisations that are looking to develop line managers who support employee engagement and wellbeing should consider mapping out how the various factors can impact the success of the development programme, and address the aspects of training, line manager characteristics, and the organisational context, which are within their control.

To help practitioners consider the range of factors impacting training effectiveness, the researchers have designed checklists covering the three areas of impact. These checklists are available at www.cipd.co.uk/hr-resources/research/developing-managers.aspx

Understanding that organisations might be at different stages of their journey in developing managers, the checklists are tailored to those who are:

  • considering conducting a development programme but haven’t started yet
  • have started designing or are currently implementing a development programme
  • have already implemented a development programme in order to support the embedding of learning into the workplace

 

References

CIPD (2012) Managing for sustainable employee engagement. London: CIPD.

CIPD (2013) Real-life leaders: closing the knowing-doing gap. London: CIPD.

CIPD (2014) Leadership – easier said than done. London: CIPD.

Ksenia Zheltoukhova is a Research Adviser at CIPD. You can contact her on [email protected]

Involvement and Participation Association

We were delighted to have Rt Hon Alan Johnson MP as the speaker at IPA’s Christmas Reception – which was held on the 9th of December. He reflected upon his experiences of Employee Relations as a Union Activist, Union General Secretary, Government Minister and a Secretary of State. A copy his speech has been published for this month’s newsletter. Alan recalled Britain’s brief flirtation with industrial democracy and highlighted the benefits of partnership working for employers and employees.

It’s a pleasure to be here with so many friends and to have yet another opportunity to plug my book, “Please, Mister Postman” – available from all good bookshops at £16.99.

The basic theme of the book is that my route from the slums was set out before me via a steady job from which I was unlikely to be made redundant, a council house, and a Union to protect my interests.

That Union, the UPW, then the UCW, and finally, after we merged with the NCU, the CWU, had a long history of seeking the involvement and participation of its members in the decisions that affected their working lives.  It was founded by Guild Socialists who wrote these ambitions into the Union’s rules.

I describe in the book how all postal workers were entitled to ten days of sick leave a year without having to produce a doctor’s note.  As we were only entitled to two weeks’ paid holiday, many of the younger staff, including me, who had trouble getting up in the morning after a night out, would take their full allowance.

These days off without a certificate were known as “Whitleys”.  After you’d taken five a supervisor with a clipboard would come to your sorting frame to solemnly inform you that it had been noted that you’d taken half the allowance, to which the miscreant would respond with thanks for thoughtfully reminding them that there was still another five to take.

These “Whitleys” did, of course, stem from the system of consultation designed to improve industrial relations recommended by J H Whitley, the MP for Halifax and later a distinguished Speaker of the House of Commons, introduced into the Post Office and other parts of the Civil Service in the 1920s.

‘Whitleyism” may have been bureaucratic and unwieldy, but there was practically no industrial action during the 45 years that it operated in an industry with 250,000 workers.

In an essay for the Industrial Relations Journal twenty years ago, Keith Glint, a Fellow in Organisational Behaviour at Templeton College, Oxford, compared the allegedly unique Japanese system of industrial relations with the British Post Office between the wars, noting the similarities.  Dialogue between management and staff was a regular feature and progression through the ranks was encouraged.

It did, however, reflect the harshness of the age in terms of discipline.  Glint studied the records for 1925 and found that postmen were dismissed for reasons varying between “unclean habits” and “a scandal caused by the conduct of his wife”.  My particular favourite was a postman who was sacked for: “marrying a drunkard without official permission”.

In many countries the issue of industrial democracy became a greater central objective of the trade union movement than it did in Britain.  There is some irony in the fact that after the Second World War, Ernie Bevin, as Foreign Secretary, sent a brilliant young TUC employee called Allan Flanders to Germany to help in the re-constitution of the West German trade union movement.  His influence helped to establish the system that would eventually become co-determination – but none of those fancy foreign ideas were wanted in Britain.

In 1975 Harold Wilson set up a Committee of Enquiry into Industrial Democracy, chaired by Lord Bullock, which concluded that in all  companies of over 2,000 employees there would be a right for workers to be represented on the Board.  Two industries were selected to implement the industrial democracy experiment – the Post Office and British Steel.  As a young Branch official in tank-top and flares, I was involved in something that few trade unionists, let alone managers, supported.  The Union declined to put any of its senior officials on the board and the effective decision-making soon moved from the Board to a sub-set of the Board consisting entirely of the pre-industrial democracy directors who met prior to the full meeting, thus excluding the Union representatives from any meaningful involvement.

Mrs Thatcher gave the experiment a decent burial and we certainly never sought to dig up the skeleton during the Blair/Brown years.

The Labour Government did introduce the Partnership Fund and joined the TUC and CBI in encouraging partnership working.  Indeed, as the Employment Relations Minister at the DTi, I handed a Partnership Fund award to Bob Crowe for his work on London Underground.  A couple of weeks later the London Evening Standard reported that there’d been a huge bust-up between the MD of London Underground and Bob during which Bob had thrown an object at the senior manager.  I hoped it wasn’t the Partnership award.

Labour did, of course, sign up to the Information and Consultation Directive and presided over negotiations between the social partners (TUC and CBI) to determine how it would operate in the UK.

I’ve not heard of any companies signing up to that agreement, and indeed the directive seems to have disappeared without trace.

Throughout this entire period, and since long before my potted history began, the IPA has been working to deliver partnership, consultation and employee engagement in the workplace.

There are many large companies in this country that have quietly implemented genuine partnership working – in essence, industrial democracy.

Most small businesses operate in this way as a matter of course.  The failure of major national initiatives could be due to the macho culture of industrial relations.

I’ve always remembered the words of the Japanese industrialist Konoke Matsushita who, in the 1980s, said in a speech to American businessmen:-

“We are going to win and the industrialised West is going to lose out.  There is nothing you can do about it because the reasons for your failure are within yourselves.  With your bosses doing the thinking while the workers wield the screwdrivers, you are convinced deep down that this is the right way to do business.  For you the essence of management is getting the ideas out of the heads of the bosses and into the hands of labour; for us the core of management is the art of mobilising and putting together the intellectual resources of all employees in the service of the firm.”

At around the time he said that, the British trade union movement was not just opposed to the European social model, it was opposed to Europe per sé.  Our mantra then was:-

  • no state interference with free collective bargaining;
  • legal immunities above individual rights; and
  • civil rights at work come with your union card.

Then, the Labour movement was against the minimum wage and in favour of the closed shop.  Now, thankfully, that position has reversed.  I don’t believe that involvement and participation can be foisted upon industry by a single Act of Parliament.  I do believe that government can be an encourager and an exemplar.  And I think that there’s a major company that can be converted to a company owned and run by its workforce.  It’s called Royal Mail.

Alan Johnson is Member of Parliament for Kingston upon Hull West and Hessle

News in Brief November 2014

Impact of holiday pay ruling

The Employment Appeal Tribunal (EAT) recently passed a landmark judgment to include overtime in holiday pay. The decision will see elements of compensation such as overtime and commission included in the calculation of holiday pay – with potential to make backdated claims in some cases. The ruling could affect up to 5 million workers and is thought to have widespread implications for companies where staff are required to do overtime as a regular part of their job.

Employers groups have suggested that UK businesses could stand to lose billions of pounds in higher wage bills, and companies could react by holding back pay rises. A recent survey of business owners by Sage showed that two-thirds did not agree with proposed changes to the way holiday pay is to be calculated.

However, unions argue that low-paid workers in particular rely on overtime to top up their salary, so it should be included in holiday pay. Howard Beckett of Unite who brought the claim said that some workers who were required to do overtime have been penalised for taking the time off that they are entitled to; “this ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order.”

 

NHS workers stage four-hour strike

NHS workers, including nurses, midwives and ambulance staff, staged a four hour strike in England as part of their ongoing pay dispute with the government. Members of 11 unions will walk out for four hours in protest at the coalition’s decision not to accept a recommended 1 per cent wage rise for all NHS employees.

Members of the Royal College of Midwives went on strike this year for the first time in 32 years. Cathy Warwick, their chief executive insisted that “the public are behind us.” However, a Department of Health spokesman said that the Government could not afford a combined pay rise without jeopardising 10,000 frontline jobs.

This comes as the Welsh government, unions and NHS employees agreed a Wales-only NHS pay deal, where 77,000 staff were offered a two-year deal which includes a cash payment of £187, a 1 per cent wage increase from April 2015 and the Living Wage for all Agenda for Change staff. The minister for Health and Social Services in Wales, Mark Drakeford said: “this is an excellent example of working collaboratively…and in Wales we have been able to avoid significant strike action by agreeing a mutual position…”

Additionally, members of the Fire Brigades Union (FBU) and Unite union at the Defence Support Group also staged a four day strike action in a row over pensions and 1 per cent pay increase respectively. 

 

Low-paid workers trapped in poverty

The latest data from Office for National Statistics showed that pay growth excluding bonuses outpaced inflation for the first time in five years, showing the squeeze on wages may be easing.

However, a recent report by Joseph Rowntree Foundation found that record number of working families are in poverty due to insecure, low-paid jobs, with two-thirds of people who found work in the past year taking jobs for less than the living wage.

A report by the Resolution Foundation also found that only one in four workers who were low-paid in 2001 went on to escape poverty and move on to higher pay. Individuals who worked part-time, or those who were disabled, older or a single parent were mostly on low-pay along with employees who worked in hospitality and sales industries.

Vidhya Alakeson, the deputy chief executive at the Resolution Foundation, said: “Britain has a long-standing low-pay problem, with over a fifth of the workforce in poorly paid jobs. But the limited opportunities for escaping low pay is just as big a concern as it has huge consequences for people’s life chances.”