It's time to introduce workplace citizenship to Britain's employers. Photo: Getty
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How to fix Britain’s broken workplaces

A new inquiry into Britain's work problems presents a vision of workplace citizenship.

There’s something seriously wrong with the world of work, and not just in the places you would expect. We know that the UK is near the bottom of the EU low pay league and that those on low pay make up a fifth of the labour force (the same as in 1994, despite the introduction of the minimum wage). And, we know we are world leaders in zero-hours contracting and outsourcing.  But, the problems at work today are no longer confined to precarious employment. As the Smith Institute’s inquiry into Making Work Better shows, the majority of Britain’s workplaces are now broken and under-performing. 

The inquiry’s 100-page report by Ed Sweeney, the former chair of Acas, documents a litany of employee concerns: falling real wages, insecurity, mistrust, skills under-utilisation and low levels of engagement. Workers in all types of jobs say they feel undervalued and over worked. They are also angry about excessive top pay and the way they are managed. Many employers are communicating, caring and investing in their staff. But, the gap between the rest and the best is widening.

Problems at work may be a blind spot for the government, but it’s undermining our productivity (which already lags well behind our competitors) and costing the taxpayer billions in terms of in-work benefits. The fact we have so many low paid, low skilled jobs in low value business is also holding back the recovery. 

With so many people feeling short-changed at work there are potentially huge dividends for a party that champions not just more work, but ‘good work’. Promising a fairer and more prosperous society with greater opportunity for the many can’t be achieved with a government that ignores the benefits of social partnership and employee voice and fails to tackle worsening wage inequality and widespread mistreatment at work. International research quoted in the Sweeney report, for example, busts the myth that deregulated labour markets with fewer employment rights and a power imbalance tilted firmly in the employers favour leads to higher productivity and happier workers.

Moreover, there’s a compelling business case for making work better. Highly motived, empowered and engaged workers make for more successful organisations. Fear and anxiety at work are hardly the hallmarks of modern businesses. What is self-evident to the vast majority of people in work is that a top down “bosses know best”, “us and them” view of the world belongs to yesteryear.  It not only stifles both productivity and innovation, but creates mistrust between employee and employer.

A serious problem in many of our workplaces is not so much the lack of skills, but the poor way managers use the latent talent in their workforce. Innovation is not just about spreadsheets or tests in the science lab. Surprising as it may sound to some, employees often know the best way to undertake a task and may have insights into what is not functioning properly. Instead of using the skills and knowledge, workers in the long tail of poor performing companies are left feeling disengaged and disillusioned.

In many instances workers also feel insecure. Indeed, the race to the bottom on rights and voice is not just about the acute problems in troubled workplaces. According to a recent Smith Institute and TUC poll, half the workforce is fearful of loss of job status while a similar proportion feel anxious or worried about work. This is hardly a basis for building trust or encouraging employees to go the extra mile, let alone the foundations for a healthy one.  Studies by Professor Michael Marmot and others repeatedly show the harmful effects insecurity (and low pay) has on the health of the nation. Making those social costs more transparent and identifying and benchmarking the good employers can help, as can support for better management and HR training.

For some, the societal costs associated with insecurity and wages are just downsides to the unstoppable forces of globalisation and technological change. However, such ‘natural forces’ are not experienced in the same way in other countries. And, most low paid jobs are not subject to the pressures of international competition. Indeed, a telling conclusion from the Making Work Better report is that these inter-related problems at work (poor productivity, insecurity and inequality) are a consequence of a financial business model designed to pursue the low road on wages, skills, and employee involvement.  The fact that the government’s employment policies encourage this ‘race to the bottom’ is no coincidence, as its failed ‘shares for rights’ scheme illustrates.

There is an alternative which challenges some of the prevailing assumptions and sets out an alternative narrative on the labour market. It’s based on the concept that work gives us meaning; that productive work is achieved by colleagues working together; that success requires workers at all levels having a say over their work; and fair rewards and security require balanced power relationships at work.

Such a vision of workplace citizenship isn't a fantasy, and there is much that government can do to ensure that employees do not surrender their rights as citizens at the point they cross their employer’s threshold. Government, for example, can do more to spread good practice and help create a level playing field so the best employers are not undercut on the basis on lower pay and poorer conditions. As the report suggest, government can become a Living Wage employer and use its power of procurement to lift people out of poverty pay. It can  also insist that companies disclose their pay ratios and support collective bargaining; clamp down on the abuse of zero hours contracts and bad agency work; reform the employment tribunal system to make it affordable and fit for purpose; improve the enforcement regimes for the minimum wage and equal opportunities; ensure that a two tier workforce doesn’t emerge when services are contracted out; extend childcare and improve eldercare; and simplify and amend the existing Information and Consultation Regulations to give employees a stronger collective voice.

Improving the world of work will of course rely on decisions and circumstances of individual employers and employees (and trade unions). But government can take a lead and advocate a culture of cooperation and consultation. The prize is not just a better deal for employees and more productive organisations, but a better deal for government.

Paul Hunter is head of research at the Smith Institute

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Today's immigration figures show why the net migration target should be scrapped

We should measure different types of migration separately and set targets that reflect their true impact.

Today’s net migration figures show, once again, that the government has raised expectations of tackling migration and failed to deliver. This is a recipe for disaster. Today’s numbers run far in excess of 300,000 – three times over what was pledged. These figures don’t yet reflect the fallout from Brexit. But they do show the government needs to change from business as usual.

It has been the current strategy, after all, that led the British public to reject the European Union regardless of the economic risks. And in the process, it is leading the government to do things which err on the side of madness. Like kicking out international students with degrees in IT, engineering or as soon as they finish their degrees. Or doubling the threshold for investor visas, and in the process bringing down the number of people willing to come to Britain to set up business and create jobs by 82 per cent. Moreover, it has hampered the UK’s ability to step up during last year’s refugee crisis - last year Britain received 60 asylum applications per 1,000 people in contrast to Sweden’s 1,667, Germany’s 587 and an EU average of 260.

The EU referendum should mark the end for business as usual. The aim should be to transition to a system whose success is gauged not on the crude basis of whether overall migration comes down, irrespective of the repercussions, but on the basis of whether those who are coming are helping Britain achieve its strategic objectives. So if there is evidence that certain forms of migration are impacting on the wages of the low paid then it is perfectly legitimate for government to put in place controls. Conversely, where flows help build prosperity, then seeing greater numbers should surely be an option.

Approaching immigration policy in this way would go with the grain of public opinion. The evidence clearly tells us that the public holds diverse views on different types of migration. Very few people are concerned about investors coming from abroad to set up companies, create jobs and growth. Few are worried about students paying to study at British universities. On the other hand, low-skilled migration causes concerns of under-cutting among the low paid and pressure on public services in parts of the country that are already struggling.

The first step in a new approach to managing migration has to be to abolish the net migration target. Rather than looking at migration in the aggregate, the aim should be to measure different types of migration separately and set targets that reflect their true impact. In the first instance, this could be as simple as separating low and high skilled migration but in the long term it could involve looking at all different forms of migration. A more ambitious strategy would be to separate the different types of migration - not just those coming to work but also those arriving as refugees, to study or be reunited with their families.

Dividing different flows would not only create space for an immigration policy which was strategic. It would also enable a better national conversation, one which could take full account of the complex trade-offs involved in immigration policy: How do we attract talent to the UK without also letting conditions for British workers suffer? Should the right to a family life override concerns about poor integration? How do we avoiding choking off employers who struggle to recruit nationally? Ultimately, are we prepared to pay those costs?

Immigration is a tough issue for politicians. It involves huge trade-offs. But the net migration target obscures this fact. Separating out different types of immigration allows the government to sell the benefits of welcoming students, the highly skilled and those who wish to invest without having to tell those concerned about low skilled immigration that they are wrong.

Getting rid of the net migration target is politically possible but only if it is done alongside new and better targets for different areas of inward migration – particularly the low-skilled. If it is, then not only does it allow for better targeted policy that will help appease those most vocally against immigration, it also allows for a better national conversation. Now is the time for a new, honest and better approach to how we reduce immigration.

Phoebe Griffith is Associate Director for Migration, Integration and Communities at IPPR