Managers Make Staff Work Harder with Less Reward

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.

UM Studies Support National Health Programs

A University of Michigan (UM) study of workplace wellness programs, in a Midwest utility company, showed it pays to keep employees healthy—it saved $4.8 million over nine years—the program cost $7.3 million and it saved $12.1 million. Dee Edington, director of the UM Health Management Research Center and principal investigator, said the findings are good news for companies looking to implement wellness programs. Well, by the same token, isn't it good news that Obama has brought in the means for ensuring that the whole population stays healthier than it is?

The UM study showed wellness programs work long-term, even though the employees who participated aged during the study, and it showed that those who participated throughout benefited most. Companies are realizing that insurance plans to care for sick employees must include wellness plans to keep healthy workers healthy. Summing up the findings among employers, Edington said:

Employers want a benefit plan that will take care of sick people but also keep your healthy people healthy and working.

Another UM study found that the pressure to keep their jobs in times of high unemployment is stressing out hundreds of thousands of American workers. Workplace stress is estimated to cost US businesses about $300 billion a year through absenteeism, diminished productivity, employee turnover, and direct medical, legal and insurance fees. About 75 percent of Americans list work as a significant source of stress and more than half say their work productivity suffers due to stress.

But companies can benefit from alleviating workplace stress, and possible violence, among workers by providing complementary alternative benefits. Cindy Schipani, professor of business law at Michigan's Ross School of Business, said:

It would seem that a healthy, less stressed and collegial work force would be less prone to resolve conflicts by violence. Not only might stress reduction contribute to a more peaceful society, reduction of employee stress together with the promotion of good health may positively affect the bottom line.

Schipani and Ross School colleague Norm Bishara did a best practice study, looking at companies on the Forbes magazine list of the “best companies to work for” that offer complementary alternative benefits, above and beyond traditional benefits that create value in the workplace by implicating employee stress reduction and positively impacting health.

Complementary alternative benefits may include:

• flexible work hours and working from home
• employer-paid health care premiums
• subsidized health care classes and health club memberships
• onsite fitness centers and medical and dental clinics
• paid leave time and special services for new parent employees
• laundry and dry-cleaning services, valet parking and grocery delivery
• discounted tickets to after-hours social activities, such as movies, plays, museums, sporting events and amusement parks.

Companies on the Forbes list that offer generous complementary alternative benefits enjoy a significant reduction in employee turnover, compared to the industry average. The average cost savings for the firms examined as a group was about $275 million in 2007. Bishara, assistant professor of business law and business ethics noted:

From a pure business perspective, complementary alternative benefits are attractive because reducing stress and, therefore, reducing costs associated with things like absenteeism, sick time and premature turnover, can increase profits.

Benefits accruing to the employer were:

• lower employee turnover
• higher worker productivity
• reduced employee health care costs
• healthier and less stressful lifestyles for employees
• a sense of community among workers

Most of the actions and benefits here are specific to the employer, but if they work across large companies, it makes sense to allow them to work across society:

In addition to improving the lives of their employees and benefiting shareholders, providing employees ways to reduce stress and promote health may also have a positive impact on society.

Schipani

Someone healthy enough to work could still cost an employer more than $4,000 annually in unnecessary health care costs. It makes sense for employers to reduce their own costs by supporting health benefits provided by the federal government, and competing then on making their workplace attractive to the best workers.

The University of Michigan also looked at how metabolic syndrome (MetS) and associated chronic disease can cost employers up to $5,867 annually in health care, pharmacy and short term disability, compared to $1,600 for a healthy worker. MetS is a collection of health risks that includes body mass index, cholesterol, glucose, blood pressure and triglycerides. The study was designed to determine the relationship between MetS and disease among employed adults. Health risk assessments were given to 3,285 employees in a Midwestern manufacturing company in 2004, and again in 2006. They hoped to determine whether employees with MetS would develop one of five chronic conditions—heart disease, diabetes, chronic pain, heartburn, or arthritis—associated with MetS.

Workers with MetS were significantly more likely to report arthritis, chronic pain, diabetes, heartburn and heart disease. If someone had MetS in 2004, they were much more likely to develop one of the associated chronic conditions by the second test in 2006. Study author, Alyssa Schultz, says workers in the study were just as likely to develop heart disease and diabetes as the general population. People in the general population with MetS are known to be more likely to develop health problems such as heart disease and diabetes without health intervention, but this is the first time the link has been studied and shown in working populations.

This finding challenges the supposed “healthy worker” effect that working people are healthier and more insulated from disease than the unemployed. Schultz said:

People with MetS cost employers money, but people with MetS and disease cost a lot more. It shows disease is an issue for corporations and other organizations, and they need to take action to help employees stay healthy.

A prevention and intervention program for at risk workers can cost as little as $150 a year per employee, according to the paper.

The important thing is to catch employees who have the risk factors before it escalates to a disease state. Keeping people healthy is much wiser then treating the illness or disease after it occurs.

It leads to improved vitality and quality of life for individuals, and cost avoidance for corporations in the form of lower health care, pharmacy and short term disability costs. Surely it follows, for employers as well as the employed and unemployed people who will come into the workforce when there is work available, that it must be good news if the general health of the population is improved by a federal health scheme. With all this plain evidence garnered directly from industry, is there so much irrational opposition to health care in the US, from both sides, ordinary people, and captains of industry.