Good Work in the North East

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Poor job quality is a significant problem in the UK. We reported in our Good Work Toolkit late last year that, nationally, one-third of workers report being in low quality work based on indicators such as autonomy levels, wellbeing, security, satisfaction, and rates of pay. In the North East, the number of employees in low-quality work rises to 40%.

Not only is ‘bad work’ bad for employees’ health, wellbeing, and finances, low quality work and low productivity levels are strongly correlated, meaning it also has a significant impact on the economy.

 

What is good work?

In 2018, the Government released the Good Work Plan, which took the recommendations outlined in the Independent Taylor Review of Modern Working Practices into consideration. According to CIPD, good work:

  • gives people the means to securely make a living
  • gives opportunities to develop skills and a career, and ideally provides a sense of fulfilment
  • provides a supportive environment with constructive relationships
  • allows for work-life balance
  • enables staff to be physically and mentally healthy
  • gives employees the voice and choice they need to shape their working lives
  • should be accessible to all.

 

Quarterly Economic Survey

With this is mind, and skills shortages a key barrier to success and staff costs a key concern, our most recent Quarterly Economic Survey asked additional questions on the actions being taken by respondents to recruit and retain the right people, primarily thinking about aspects of Good Work.

This chart shows the number of respondents out of 172 whose businesses had taken the following actions:

Implementing or promoting flexible working72
Investing in training and development88
Adjusting or improving pay89
Adjusting or improving non-pay benefits53
Focusing on health and wellbeing in the workplace75
Focusing on providing an inclusive workplace49
Looking at different methods of recruitment (e.g. using apprenticeships for the first time)50
Focusing on environmental impact and sustainability54
Connecting with your local community (e.g. through volunteering opportunities)42

The results showed two clear tiers of activity, with adjusting or improving pay (89), investing in training and development (88), focusing on health and wellbeing (75) and implementing or promoting flexible working (72), favoured by 20-30 more respondents than the other options.

 

Roundtable

For the first time, we worked with our Quarterly Economic Survey associate sponsors Durham University Business School to conduct a qualitative investigation into the topics above. This came in the form of a roundtable hosted by Prof Jo McBride, Professor of Work and Employment Relations within the Business School’s Department of Management and Marketing.

The participants were given a broad overview of the quantitative findings of the survey, and presented with the top four actioned responses to recruitment and retention – adjusting or improving pay, investing in training and development, focusing on health and wellbeing, and implementing or promoting flexible working.

 

Adjusting or improving pay

Adjusting or improving pay is a very effective tool for recruitment and retention. 86% of Living Wage Employers say accreditation has improved the reputation of their business, and 75% say it has increased motivation and retention rates for employees, for example.

A roundtable participant from the transport sector said “Our customers were expecting a price hike… so we could actually increase our rates and then reflect that straight into our driver’s pay packets, which is what we’ve done, and that’s been enormously successful.” Because of this, it was stated that they were able to retain their best employees, stopping them from moving down South to seek higher pay.

Another participant, from the culture sector, stated that, while their business was not having a problem recruiting, they suspected that applications had decreased significantly due to low pay.

 

Investing in training and development

Many of the participants indicated that their organisations invested in training and development. “We’ve always done that to be fair, that’s one of our major growth areas and we’ve maintained that over the past few years” said someone from the transport sector.

Several participants highlighted a skills shortage, particularly of young workers lacking what they called ‘the basics’. “There’s a definite skills shortage. I definitely feel like some of the things that young people are getting trained in is a little too theory based and there’s not enough application,” said one participant from the digital sector. Despite this, young people are more than happy to learn these ‘basics’ through training, according to another participant in consultancy: “When I first started work, we were exposed to those opportunities to learn first-hand. And yet, when we go out and train, we do some really basic stuff and I meet young people who just can’t get enough of it.”

There were worries that young people’s lack of confidence could be a result of the pandemic leading to fewer opportunities for work experience, and even just the lack of face-to-face interaction throughout the lockdowns.

Some participants also expressed that the pandemic has been negatively impacting their own training programmes. “We’ve got a huge number of trainees entering the business … There’s an element of classroom training, but there’s a majority of being out there … That all stopped” said one participant from the transport sector, referring to the bottlenecking of trainees that the pandemic caused.

 

Focusing on health and wellbeing

Several participants emphasised their focus on health and wellbeing. “We’ve had health and wellbeing kiosks, we provide various different counselling services, physiotherapy, medicals… The support is there, it’s provided,” said one, while another said: “We are massive on health and wellbeing at the moment. Just this week we’ve endorsed a new domestic violence policy within our company.”

A few participants mentioned what they feel to be an increased lack of resilience, particularly for younger employees, meaning that health and wellbeing could be more important now than ever before. “People are being broken down a lot more easily. Mental health has kicked in significantly” said one.

In some cases, this might be due to increased hostilities in the work environment: “The conflict that our staff are coming across is twice as high as it was prior to covid” said a participant from the transport sector. Previous research has confirmed that more than half of customer-facing employees have experienced increased hostility during the pandemic.

 

Implementing or promoting flexible working

Many of the participants indicated that their organisations had implemented flexible working, at least where they could, and indicated that the pandemic was a catalyst. “We do have an element of flexible working, but we’re quite limited as to how much we can offer”, said a participant from the transport sector, “From the management side of things, yeah absolutely there’s so much more flexibility in their roles now.” It appeared to be a crucial tool in recruitment and retention, and also useful when sick: “If someone gets a cough or cold and you feel you can work from home… It makes good sense.”

Despite this, remote working was also seen as a threat – a way for competitors from other regions to poach local talent. “My wife’s looking at roles in remote working because she can work remotely for a London-based company and she can get a crazy big salary. As a small agency owner, it makes me nervous because some of the workforce that are up here that are wanting to work remotely are now able to apply for jobs that are in other places that can afford to pay more,” said one participant.

Remote working was also seen as a threat to relationship-building that comes with working face-to-face. “When they’re wanting to work remotely, they’re not thinking about the team camaraderie, or the mental health aspect of actually being around people,” said a participant from the digital sector. “There’s a lot that goes with running a business when you’re bringing people in, and if they don’t want to be part of that culture that you want to grow teams around…”, they continued. While company culture is rightly a concern of employers, working from home doesn’t have to dilute your corporate culture.

 

Why are the other indicators not popular?

It is currently unclear why the other aspects of good work are being less used as a method of recruitment and retention. Adjusting or improving non-pay benefits will help you build a relationship with employees that they can’t get anywhere else, providing an inclusive workplace will increase your reputation and recruit from a larger pool of talent, a focus on sustainability is also shown to attract talent, and apprentices are said to be more loyal than non-apprentices.

Perhaps these methods are considered less effective at improving recruitment and retention, or it could be that businesses are doing some of these things, but not with recruitment or retention in mind. Further study could be interesting.

 

Barriers to Good Work

The main barrier to Good Work at the moment, it seems, is a lack of certainty. “We want to invest in people, but the confidence is so fragile, we’ve got customers saying ‘yes, no, yes, no, yes, no’ when they come to buy from us,” said one roundtable participant.

This seems to have especially impacted hiring practices for a few of our participants, with some of them sharing that they are currently hiring freelancers rather than hiring people part time, stating that freelancers get similar pay but have a better skillset and “don’t have all the additional tie-ins”. They found that potential part-timers, on the other hand, wanted to work fully remotely, and for more pay than they considered reasonable for their skills.

One participant also stated that their business no longer pays their freelancers in a ‘traditional’ way: “Historically it was ‘do 10 hours, charge 10 hours’, and now it’s ‘Come with us, we’re going to this client, this is a prospecting workshop … None of us in our business are going to get any money out of this … If we get a win from it, you’ll benefit from that win.’ People are really up for that which has really surprised me.”

This seems to be at odds with the concept of Good Work due to a possible lack of job security. Temporary and variable contracts are good for businesses in that they allow quick adaption to production or service demands, but workers’ experiences of these are mixed. While some workers value aspects of flexibility, others feel that they are largely within employers’ interests and instability can lead to poor outcomes for employees, including economic hardship, according to the CIPD.

The impact that job insecurity can do was indicated by another participant in the culture sector: “Freelancers have left the sector because they were left swinging in the wind with no support at all. They aren’t coming back, so the sector has shrunk in that regard. People have gone on to do teacher training and things, because of that insecurity, particularly people in the early stages of their careers.”

If demand did not fluctuate so much, this might not have been the path their business would have chosen, indicates another participant: “At the moment we’re working with freelancers that we can switch on and switch off, and that’s purely because- I’d love to get a young person in, I’d love to get a manager in, somebody with experience- but actually, the way that my business works, the fluctuation in demands we have, that risk just feels too great right now.” This coincides with the opinion that, sometimes, elements of Good Work might be lacking due to business necessity: “I think people are reacting so fast in business at the moment that they’re just, rightly, chasing the opportunities, going where the money is, and not necessarily taking their staff with them. And that’s not a criticism in the sense that they’ve done that deliberately – they’re looking to survive.”

 

Read the Q1 2022 Quarterly Economic Survey report in its entirety here.

 

Freya Thompson

Knowledge and Research Executive

@NEEChamberFreya

 

Photo by Chris Liverani on Unsplash

Chamber members hear ‘Good Work’ can help attract staff

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The Chamber launched the latest Quarterly Economic Survey findings to North East employers and also outlined practical suggestions of how to tackle recruitment challenges.

Speaking at the event Prof Jo McBride, Durham University Business School, recapped on findings from a Chamber business roundtable discussion on the Good Work approach, held in March.  She said companies which followed these employment principles were likely to get benefits of retaining and attracting staff.

Good Work guidance focuses on valuing and rewarding employees, promoting health and well-being and developing a balanced workforce which has flexible working options.

She said: “A common theme in the discussion revolved around skills and the lack of what was referred to as ‘The Basics’. In practice, this encompassed a broad range of non-technical skills.  For example, everything from customer service through to con­fidence in a working environment, to resilience in the face of challenging situations.

“Flexible or hybrid working was seen as a real benefit that many businesses were now con­fident offering it but they also recognised it could see potential employees being poached from companies outside the area.

“However, this is definitely a timely opportunity for organisations to proactively shape the future of work as well as progress Good Work initiatives.”

In the whole survey, a strong proportion of respondents (over 64%) had attempted to recruit full-time, permanent employees in the last three months. This is an increase on levels recorded last quarter (59.7%), showing a continued upward trend across the last 12 months from the levels recorded in Q1 2021 (46.7%). However, there was substantial concern on the rising costs facing businesses.

Arlen Pettitt, Chamber knowledge development manager said: “The results of this survey paint a clear picture of businesses doing their best to recover and grow in the face of continued difficult circumstances.”

The survey’s associate sponsor is Durham University Business School.

New Report Questions ‘Levelling Up’ Rhetoric

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Two years on from the UK government’s promise to level up, this year’s State of the North report by IPPR North exposes the gap between levelling up rhetoric and reality. I highlight how the report states businesses can help.

 

Despite being an important agenda with the potential to address the UK’s longstanding regional divides (the UK is one of the most regionally unequal countries in the ‘developed’ world), a clear definition of the term ‘levelling up’ and the policies it will involve are still yet to be announced.

The report revealed that levelling up is currently far too centralised and underfunded, with just £0.5 billion of the Levelling Up Fund having been allocated to the North, which represents and investment of just £32 per Northern resident. This funding is just not good enough, considering that there has been a £413 per person fall in annual council service spending from 2009/10 to 2019/20. In fact, the North East has had the largest change in total revenue service expenditure from 2009/10 to 2019/20 at -24%, which is twice the South East’s -12%.

The authors also state that the economic, environmental and education challenges that face the North are longstanding and cannot be fixed by the small-scale interventions that the government has promised so far. Stating that the interventions need to be more ambitious, they outline three missions that would truly help the North thrive:

  • building a new economy that promotes widespread prosperity
  • making the North the engine of the net zero transition
  • providing everyone with access to high-quality, life-long education.

 

Jobs

The North remains behind England overall across different employment metrics, including economic activity, employment rates, and unemployment rates. For every job created in the North, just under three were created in London and the ‘Greater South East’. There is also an issue of poor job quality, with an estimated 21.5% (13 million) jobs in the North being paid less than the real living wage and in-work poverty is rising.

The report states that good work and decent jobs will be crucial to levelling up the North. You can read the Chamber’s own Good Work Toolkit here.

Good work includes:

  • a voice for workers, such as through trade unions and recognition agreements
  • fair and decent pay, of at least the real living wage
  • regular, dependable hours
  • fair treatment and respect
  • healthy workplaces
  • opportunities for learning and progression.

High-quality job creation and the improvement of existing work across the region will require significant structural change in the North’s economy to build a more prosperous, fairer region and close the productivity gap.

The report states that businesses should recognise their own role in contribution to this economic mission as the principal providers of jobs and economic activity. You are encouraged to harness your links to local places and instigate meaningful collaborations with communities, councils and combines authorities with an aim to identify how you can better contribute to improving local living standards.

 

Net Zero

The report states that it will be a challenge for the North to reduce its carbon emissions and build a more sustainable future. CO2 emissions are considerably higher in the North when compared to other parts of the UK. While this is partly due to significant concentration of carbon-intensive industry in the region, There has also been a repeated underinvestment in initiatives to increase the energy efficiency of homes or provide credible public transport options.

Early signs suggest that the UK government’s flagship policies for reaching net zero remain unbalanced – both in terms of their prioritisation of certain sectors over others and in their focus on certain places. Existing industries that employ tens of thousands of people in the North, such as the steel industry, risk being left behind as part of the net zero transition.

The authors suggest that a fair allocation of funding and an inclusive system of devolution that allows local leaders to better shape future green industrial policies would be a much better approach which could enable all places in the North to share in the opportunities that net zero presents.

The report also emphasises that there is significant economic opportunity to be gained from developing the North’s green economy. While home to many of the UK’s most carbon-intensive industries, the North also has the potential to lead the net zero transition. Much of the northern coast such as the North Sea and Irish Sea are already being harnessed to cultivate renewable energy, with three out of the five biggest offshore wind farms are currently located in the North. As of 2020, the North is said to account for 51% of England’s total renewable energy generation, and over one-third of the UK total.

Despite its potential, however, there remains a real risk that the North will not benefit fairly from the transition to net zero. Without further powers and resources, the North’s mayors will be unable to implement the radical solutions needed to reduce emissions from people’s homes and develop a sustainable transport system. Without these, the North is starting from a position of and will have to tackle the climate crisis on uneven footing.

The report states that business must play its role by investing alongside government in the North’s net zero transition and ensuring that any future opportunities created by the net zero transition support local economic growth and prosperity

 

Education and Skills

Education results in economic, social and health benefits and therefore should be at the centre of any attempts to level up, states the report.

There continues to be a large attainment gap between the North and the rest of England at every level of assessment, from Early Years, through to GCSE level, and beyond (it is perhaps notable, however, that the North East fares above average in Early Years attainment). The authors state that closing this gap and providing people with the skills they need to access productive, high-skilled jobs will be crucial if we are to address widening economic divides in the future.

Children across the North have also been disadvantaged when it comes to attending school during the pandemic and when it comes to partaking in extra-curricular activities. Austerity measures have resulted in the closure of many facilities such as youth centres, libraries and leisure centres where extra-curricular provision
may be provided.

The report states that it is essential that employers develop strong relationships with skills providers. Employers should also be supported in strategically developing their businesses and workforce in order to create realistic progression routes that benefit both the organisaton and the workforce.

 

Overall, the authors state that they remain optimistic about levelling up, despite underwhelming government policy so far. They state that the North’s institutions are already doing the things needed to level up. We simply need to further empower those institutions and make sure no community is left behind, which will require devolution and a collaborative approach across all levels.

 

Freya Thompson

Knowledge and Research Executive

@NEEChamberFreya

Photo by Loujane Alasi on Unsplash