Unless you are a banker, one might add!
King’s College London and law firm Speechly Bircham have surveyed 550 senior personnel of firms, with a combined workforce size of more than two million, to discover the state of human resources in the UK. It highlights the problems faced by employers, as they struggle to find ways to address gender pay inequality. They are unprepared for forthcoming changes to the retirement age, and are facing greater workplace unrest as austerity measures, longer working hours, stress and a skills shortage take their toll on the workforce. Richard Martin, Partner and Head of Employment at Speechly Bircham, said:
This sends a clear warning to employers. The combination of increased workplace conflict, longer hours and rising stress levels is a potent cocktail that could lead to a significant rise in tribunals and industrial action, if not properly addressed.
Despite our last survey showing that UK employers regarded employee engagement as their number one priority, reported levels of employee engagement have fallen. Skills shortages are worsening and the rigid cap on immigration means that employers are left with few tools with which to plug the skills gap. Only a small percentage of businesses have any measures in place to deal with pay inequality despite the Equality Act looming.
Perhaps most worrying is what can be read between the lines of the survey about employee wellbeing and engagement. At a time when employers should be focusing on re-engaging with staff and repairing the damage caused by the recession, staff are instead being made to work ever harder, without reward. An economic recovery built on working reduced workforces harder and harder is clearly not sustainable and could lead to major problems for employers—particularly in the public sector.
The gist of the report is:
- More than 50 per cent of firms reported an increase in working hours, while pay rises and bonuses are being withheld. Longer working hours correlated with increased absence, sickness, stress-related problems, and more grievances. Increasing working hours causes workplace unrest and higher staff turnover.
- 42 per cent of respondents employing non-EU workers reported that the immigration cap is affecting their business adversely. One in three businesses have an bigger skills shortage compared to last year when it was 22 per cent. Where there are skills shortages, staff turnover is increasing and more working days are being lost through sickness and absence.
- Deteriorating employee relations, high stress levels and workforce disputes appear endemic, particularly in relation to bullying, harassment and relationships with line managers.
- 46 per cent of respondents said that stress-related problems have gone up, while 30 per cent had seen grievances increase over the past year. Organisations that noted higher levels of stress showed a direct correlation with higher levels of sickness absence.
- In 2011, 40 per cent of respondents expect worse employee relations, 42 per cent expect higher stress levels and 29 per cent see rises in employee grievances.
- Most firms say they have equality of pay but admit they do not have any ways to check it. 84 per cent claimed no material gender pay inequality, but only a third had any means to monitor gender equality of pay.
- Most businesses are unprepared for the scrapping by law of the compulsory retirement age from April 2011. 78 per cent of respondents still had a retirement age of 65, and another 5 per cent had some other compulsory retirement age. Only a third of organisations thought it was an issue.
- Downsizing of workforces remains largely unchanged and flexible working continues to increase. 70 per cent were still having to make compulsory redundancies in 2010, hardly any improvement on the 72 per cent who downsized in 2009. Flexible working continues to be a popular workforce strategy in difficult conditions, with 36 per cent of respondents identifying an increase in the use of these arrangements.
- Macho management remains the fashion, even though poor relations with staff are the biggest source of grievance, formal grievances arising from employee relations with senior/line managers for 40 per cent of firms.
- Though job design, employee participation and procedural fairness have more impact on employment than supposedly more effective leadership and management, macho management continues to retain its appeal among management.
Stuart Woollard, Managing Director of King’s HRM Learning Board and co-author of the survey report, says the survey…
…should worry all business leaders and HR directors as the results question the sustainability of current strategies to keep workforces performing at the required level. Organisations must carefully consider the likelihood of erosion in employee productivity, work quality and performance as a consequence of lean workforces and additional working hours. With an apparent leadership/management disconnect with staff, firms may also not realise the nature and extent of the problems ahead.
Organisations that are able to understand and alleviate employee anxieties and provide effective ways to counter the impact of high pressure work environments will ensure that they retain more engaged and productive workers, making a route through the economic uncertainties far clearer. There is evidence in our survey that those firms who are able to implement effective HR strategies that drive higher levels of engagement may find that these initiatives will differentiate them in terms of organisational performance.
Anyone looking on with a critical eye cannot fail to wonder why bankers need huge bonuses to motivate them to work, but people doing something useful, making things we need in a factory, or distributing them, whether laborers or skilled technicians, need to be threatened and bullied according to the continuing fashion for macho management. The macho managers haven’t the wit to realize that cutting and cutting staff levels, and forcing people to do more for less, while refusing to train the staff in the skills they, and we, need is destroying our potential for surviving. Moreover, the more people have to work and the less they have to spend and the less leisure time in which to spend it, the less will be bought. It forces us into depression. In short, our governments and the management they represent could hardly do worse.