In his keynote address at the The Institute for Employment Studies (IES) Annual Conference yesterday (27 April), IES director Tony Wilson drew attention to some pressing issues underlying the recent labour and skills shortages.
Wilson explained that a decline in the youth labour force – from 4.7m to 4.2m in just 10 years – lower migration after Brexit, and an ageing population means that “longer term, we won’t have enough workers”, which would be “a defining issue for the next parliament”.
However, he added that while the pandemic caused additional issues, it also helped highlight inequity. This has been further accelerated by the cost of living crisis, which has caused disputes over pay and conditions and highlighted the importance of equality, diversity and inclusion (EDI).
So, despite some of these issues being deep-rooted, Wilson said that “the real story is that people aren’t joining [employment]”, and this is where fairness plays a role to help attract and retain more people in the workforce.
Is pay too high or too low?
Following the controversial statement by Bank of England economist Huw Pill that people in the UK “need to accept that they're worse off and stop trying to maintain their real spending power” by asking for higher wages and passing costs on to customers, Duncan Brown, principal associate of the IES, approached the pay/inflation debate head on.
Referring to the most recent ONS data, which revealed that adjusted for inflation, growth in total and regular pay fell by 3 per cent on the year, Brown said that pay is overwhelmingly lagging behind living costs, with it perhaps being one of the reasons why industrial action and strikers are met with good levels of support by the public.
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“There's a strong level of agreement that people do not have enough to put food on the table or heat their homes, having to [choose] one or the other. That's really what I think is driving this level of support,” he said.
Circling to the topic of an equal world of work, Brown said that organisations can do more to ensure pay awards and wage rises are as fair as they can be by bridging existing pay gaps.
“HR is doing unconscious bias training. That's the overwhelmingly most common initiative and unfortunately, most of the evidence is that, on its own, that's not going to close the gaps, either the representation or the pay gaps,” he explained. IES research has shown that “a broad range of initiatives across the whole employment and HR space, such as de-bias in recruitment, providing internal development and flexible working over a sustained period is what's going to close pay gaps”, he added.
Complete fairness is not possible, but more can be done
Through the lens of her EDI work as people evolution consultant at And Digital, Heledd Straker, shared her insights that “organisations can be institutionally biased even if the people [in them] are not”.
“There is not a single organisation in the world that has objectively neutral performance management programmes that won’t benefit some people rather than others. That is just the nature of humanity, it tends to build things based on our own images,” she said, while adding that this is why “we need to build things tailored to different demographics, with different ways of thinking and working. It's hard to do so, we're not used to it, but it is possible”.
In order to achieve this, Straker suggested using a lot of data collected from your organisation and steering clear of a “one size fits all” approach. “A year and a half ago, I went around and literally just talked to as many people as I could from the organisation and asked them to explain to me what their experiences of inclusion and exclusion were in the organisation,” she said.
And once you have the data, it matters how you look at it, she urged: “Recognition is not just about tracking and controlling the people who are different from the rest, it's about understanding who we have specifically and then accommodating where the structural inequities are, because only when you have the data can you actually call these things out and make them visible.”
Even ‘harder to flex’ industries can benefit from flexible work arrangements
Nicola Smith, interim chief executive of Timewise, said that “flexible working matters for the business bottom line” with flexible working solutions making a real difference in workplaces.
However, Timewise’s own research has revealed a significant gap between supply and demand of flexible working, as nine in 10 people want flexible work, five in 10 already work flexibly, but only three in 10 job roles offer such arrangements.
Smith suggested that in the current climate of skills and talent shortages, flexible offering can play a big role in helping attract and retain staff, but would also help give more opportunities to people who are time-restricted due to their age, disability, or caring responsibilities.
Acknowledging that 60 per cent of the UK workforce is employed in sectors that are “traditionally harder to flex” and up to 67 per cent is in roles that can’t be worked remotely, Smith explained that often there are ways to incorporate flexibility regardless.
For example, as part of its work, Timewise has been designing flexible working arrangements for such “harder to flex” sectors including the healthcare, retail and construction sectors, using rostering cycles, which, for instance, gave 240 NHS nurses across three hospitals greater flexibility and control of their time with the option to navigate some of their work patterns.
Justifying this approach, Timewise’s latest Fair Flexible Futures research found that judging by the metric of decreased sickness absence, usually an outcome of flexible arrangements, “only modest improvements are needed in reduced sickness absence for the benefits of a flexible working programme to outweigh the costs within three years”, Smith explained.