Coursework

Employee relations

With increased competition in industry, businesses are recognising that is it essential to give themselves the edge and that having the right employees at every level, with the appropriate skills, is fundamental to the running of a profitable business.

The need to attract, motivate and retain high-quality staff has therefore become more important.
While competitive wages are recognised as an important way of keeping employee happy, there are a number of other benefits packages now offered, for example, bonus schemes, gym membership, health insurance and increased flexibility.

Flexible working and work-life balance

With employers reporting skills shortages and the competition for suitably qualified and experienced employees increasingly fierce, organisations seek to make themselves more attractive, as ‘employees of choice’. One way of doing this is to offer employees a work-life balance through a range of flexible working options.

Flexible working includes reduced or compressed hours; career breaks; extended maternity and paternity leave; job share; or time off for volunteer work. The implementation of work-life balance practices often requires a change in culture and attitudes across the organisation, as the employer-employee relationship shifts from one of traditional command and control, to one with more balance, where the employee has more autonomy.

“The principle at stake here is that work should be healthy and should leave time and energy to pursue interests outside work. Demographic changes, a more diverse workforce, business imperatives and government policy have all been driving work-life balance up the agenda.”

Such polices are supported by legislation such as the Employment Relations Act, Working Time Regulations and Flexible Working Regulations.

On the Work and Families Bill 2005, which proposes increased maternity and paternity leave rights and an increase in statutory holidays, the Institute of Directors’ Miles Templeman, said:

“Our members, by and large, support family-friendly policies. Three out of four believe that it is actually morally right for society to have family-friendly policies in the workplace. They realise that these policies aid staff recruitment and retention and ultimately boost morale.”

Another factor driving investment in workplace health is employers’ duty of care. New UK and EU legislation means employers are increasingly obliged to manage the physical and psychological wellbeing of their staff. This, along with the threat of possible litigation means organisations are embracing an approach that focuses on the psychological, as well as physical health of employees. A growing issue of concern is that of workplace stress.

According to research by the Health and Safety Executive (HSE):

“Over the past two decades, there has been a growing belief in all sectors of employment and in government that the experience of stress at work has undesirable consequences for the health and safety of individuals and for the health of their organizations”.

The HSE estimates that half a million people suffering from work-related stress, anxiety or depression and that an estimated 12.8 million days off work are annually attributed to work-related stress, anxiety or depression.

Regulatory requirements

Social change had created greater rights for employees, as well as greater expectations, but put more pressure on employers. Legislation over the past decade, including that covering the National Minimum Wage, Working Time, Information and Consultation and discrimination. The influx of employment law began in earnest, with the Employment Relations Act 1975, which has been many times updated.

Over the past 25 to 30 years, laws governing employee relations has become increasingly complex and complying with the ‘red tape’ it causes is a huge issue for the contemporary employer. Britain’s increasing integration with Europe over this period means that employers must adhere to European directives, as well as domestic legislation. Many employers feel that the balance of power has swung too far in the favour of workers.

Tribunal culture

According to research by Sage, last year saw 115,042 employment tribunal claims brought against employers, representing a 6% rise over the past decade and the average unfair dismissal award was £7,275.

It seems that while legislation appears to be supporting employees, the pressure it puts on employers could actually reduce employment opportunities:

“Although business is aware of the importance of fair play and equitable rights, the corresponding increase in form filling and resulting complex legal wrangles is having a disproportionate impact on small companies. In fact, a fifth of all businesses have considered giving up because of red tape surrounding employment legislation. The growing mountain of red tape has actually stopped 32% of businesses from taking on new employees.”

Many employers are choosing to settle out of court rather than face a costly employment tribunal, causing employers’ organisations to call for further reforms to the system, according to the Confederation of British Industry (CBI). Defending tribunal claims is costly for UK businesses, in terms of legal fees, management time and stress. CBI research also found half of all employers felt there had been a rise in “weak and vexatious” claims.

Corporate Social Responsibility

Many employers have become involved in Corporate Social Responsibility (CSR), a term which has been born out of business’ increasing consciousness of its impact on society and environment. CSR is about companies taking into account the economic, social and environmental impacts of their work, and regularly addressing the interests of the wider society.

Such measures can bring tangible benefits to smaller businesses, as a company with an ethical reputation can not only boost sales, but also attract better staff and improve retention and motivation.

In term s of employee relations, this can mean: improving consultation with employees, encouraging workforce diversity, and inviting employee participation and suggestions.

Industry
The past 25 to 30 years has seen a decline in manufacturing and rise in service sector employment:

“Although its overall contribution to wealth generation continues t be substantial, manufacturing only accounts for 15% of total employment.”

This had changed the choice of work available and has lead to shift away from what may have been previously thought of as ‘blue collar work’.

There is also an increased demand from customers for ‘round-the-clock’ service, which is another reason why workers have more options of jobs with flexible hours, for example, call centre work.

Unions

The role and influence of trade unions, and the practice of collective bargaining, has declined over the last 25 years: “Trade union membership fell rapidly during the 1980s and 1990s, with little replacement by other structures; hence the widespread concern about a ‘representation gap.’”

This decline has been attributed, in large part, to the legislation of the Tory government:

“…the election in 1979 of a Conservative Government and its re-election in 1983, 1987 and 1992 meant above all that throughout the past 15 years there has been a Government pro-business and anti trade union.”

However, there has been an increase in the number of bodies of intervention, such as Acas, the Low Pay Commission and the Citizens’ Advice Bureau.

Demographic changes

There are now more people than ever graduating form university, which means there are more people entering the workplace with higher aspirations and expectations.

Life expectancy has increased over the past 25 to 30 years, while the birth rate has declined, meaning the workforce is older and more people are working past the traditional retirement age, either through choice or necessity. This means that employers’ attitudes to older workers has had to change: instead of being seen as ‘over the hill’ or ‘on the scrap heap’, they are seen as experienced and useful employees. Some employers, such as B and Q, are actively embracing older workers.

There are other demographic changes that have changed the context of employment relations quite radically:

“The role of people from ethnic minorities is likely to become increasingly significant – it is estimated that they will account for no less than 50% of the growth in the working population over the next decade…migrant/immigrant workers already make up much of the shortfall in labour supply and are likely to continue to do so.”

Women

The proportion of economically active women has risen since the 1970s, a trend that is expected to continue. According to Court (1995), this has been driven by a transformation in the working patterns of mothers:

“In the early 1970s there was a very marked difference between women with children and other women, in terms of their labour market behaviour. This is much less the case now and women with dependent children are more likely to be working than not working.”

Much of this increase can be accounted for by the rise of part-time roles: between 1971 and 1993, 93% of the total increase in women’s employment was in part-time work.

While half of employed women still work in the same three occupational groups that have dominated since the early 1970s (clerical/secretarial; personal/protective services; and sales), women have increasingly gained entry, in this period, into managerial and professional employment. In 1971, these occupations accounted for just 12% of women, rising to 20% by 1993.

According to research by the Equal Opportunities Commission (EOC), there is a growing convergence between the participation of women and men in paid work. However:

“This convergence masks deep and enduring differences… The most significant difference between the sexes is the pronounced pattern of gender segregation in different industrial groupings… some are heavily male-dominated such as engineering whilst others are mainly female-dominated such as hairdressing. New industries show no sign of breaking the mould. A second major difference is working hours. While men are overwhelmingly concentrated in full-time work, large numbers of women work part-time and this is closely associated with their responsibilities for children and other dependants.”

The EOC research shows that, overall, women remain at a disadvantage because of occupational segregation, as it means they are concentrated in lower-skilled and lower-paid jobs, with less access to vocational training and education. Women’s concentration in part-time employment also confines them to certain occupations and industries, which are generally low paid.

However, this continued gender segregation creates inflexibility in the labour market and inhibits both men and women from achieving their full potential, as well as limiting the pool of skilled labour available to employers:

“Gender, rather than an individual’s skills and abilities, continues to be a major determinant of individual economic prosperity. National strategies in employment, education and training are required to reduce gender segregation in the labour market, and to promote wider opportunities for women and men.”

The Sex Discrimination Act 1975 made sex discrimination unlawful in employment and vocational training, as well as making it illegal to discriminate against someone on the grounds of being married. These laws were tightened in October 2005 to specifically outlaw sexual harassment and discrimination on the grounds of pregnancy.

However, practical barriers, such as access to affordable childcare and flexible working arrangements still hamper the progress towards true gender equality in the workplace. The so-called ‘glass ceiling’ also still exists: a cultural and organisational barrier caused by a lack of encouragement, or expectation, of success and a lingering unease about women in positions of authority.

Although the Equal Pay Act 1970 gave individuals the right to the same contractual pay and benefits as a person of the opposite sex in the same employment, a gender pay gap still exists, perhaps for many of the reasons outlined by the EOC. His currently stands at 18%, comparing the wages of males and females employed full-time.

This suggests that, although women, and those with children in particular, have greater access to employment, and legislation to back this up, they are still being penalised in terms of reduced wages and development opportunities.

Technology

Technology has had a huge impact on industry and employee relationships. Few workplaces today do use computers, which was not the case in the 1970s. The proliferation in the use of PCs, internet, intranet and emails has made work easier, arguably, but communication faster and simpler, certainly.

Employers can communicate with employees en masse, via email, intranets and text message. Such technology makes information retrieval much faster. It also gives a boost to the notion of flexible working, making it easier for people to work from home or while travelling, using laptops, broadband and Bluetooth technology, for example. Recruitment is increasingly being carried out via the internet.

The impact of these technological innovations could be seen as positive from both employers’ and employees’ points of view, but there are some possible drawbacks, including a decline in personal, face-to-face communication. There is the notorious case of a boss who informed workers they were being made redundant, via text message.

In addition, Some could argue that the ‘always on’ culture, ie, the fact that people are almost always contactable by email or mobile phone, means workers are less able to switch off from the workplace and adds to work-related stress.

Temps

Industrial change and the increasing unpredictability of the workplace landscape have led to an increase in the use of temporary (temp) or casual workers. Temporary positions can be a more flexible and convenient way for employers to fill posts, as well as providing more flexible and convenient roles for the growing numbers of mothers, students and older employees in the workplace.

“Agencies confirm that there had been a large and sustained level of increase in the volumes of their business in the past few years. They suggest that there are increasingly coherent and systematic criteria in choosing to employ temporary staff on the part of their customers, supplementing, but not replacing, the traditional rationales of covering leave and meeting peaks in demand. These are: ‘matching staffing levels to peaks in demand’ and ‘short-term cover whilst staff are away on holiday or sick leave’.”

The increase in the use of casual labour could be due to need to cut costs, or the need to outsource activities cost-effectively.

Donaghy (2005), point out two important enduring features of the employment relationship, despite the changes over the past three decades:

“Nothing is automatic about the employment relationship: to put it into effect involves dialogue, day-to-day consensus building and ‘give and take’. Both conflict and co-operation are inherent, given the uncertainty, there is enormous cope for divergent goals and behaviours.”