CIPD Blogs

The face of organisations is changing and with it comes the emotional rollercoaster for employees. What keeps people engaged during such unpredictable times? Or, more importantly, what can undermine it and whip it away overnight? From speaking to friends and to employees in organisations I’ve visited in the last couple of weeks, what drives engagement doesn’t appear to be changing. Employees have the same needs and expect the same things from their managers and leaders.

 

What is changing is employees’ expectations of how much the organisation needs to do to fulfil their needs. People are expecting more from their organisations until they are prepared to be engaged. As the level of doubt increases over the future, so does the need for the organisation to give genuine reassurances and displays of trust.

 

Attention needs to also focus on the factors which could undermine endeavours to maintain engagement levels. The most apparent influence is the informal firm, which appears to be growing in importance at an exponential rate as economic uncertainty increases. The natural human reaction to difficult times is to call on colleagues and friends for support. People discuss the situation and how they intend to react to it; not only the affect the current situation is having on their work life, but also their personal life. Do organisations have an ethical obligation to provide support for employees, given the overspill between different areas of people’s lives?

 

What I find really interesting are the two very different ways that organisations react to the amplified informal firm. One reaction is to see it as a threat that needs to be managed; something that is to be feared as it is outside managerial control. The other viewpoint is that the informal firm is a valuable source of information for managers who are able to tap into it. How else can they find out what employees are thinking and feeling and what they need from the organisation? This knowledge is a vital guide for the content and tone of formal, internal communications but is unlikely to be revealed to its full extent in employee attitude surveys.

 

Personally I think organisations should not interfere with the informal firm, but there must be ways managers and leaders can mitigate its detrimental effects on engagement through their actions and behaviours.

In recent months there have been many opportunities for senior people in organisations and governments to take responsibility for the failings of their own, or their predecessors’ decisions. This has ranged from world leaders, heads of big business and football managers. The “I was right” mentality risks furthering the mask of heroic leadership and then may also discourage others to really learn. The excuses are as varied as “unforeseen market dislocations” to the poor quality of the Wembley pitch!

I can remember many years ago when I studied A level politics, being told about ministerial  responsibility – the idea that when a government or department got something seriously wrong, the minister would fall on their sword. Now I’m not suggesting that leaders in organisations should resign at the slightest mistake or that the Premiership needs a higher turnover of managers! It’s a pity that sometimes the leaders who do mess up often don’t or can’t stay to sort it out. What I find frustrating is that failing to accept that things may have gone wrong does more to encourage secretive & defensive behaviours than to look at doing things differently and more effectively in future.

I’m also not trying to suggest that this is easy for leaders to do. Leading any organisation in the current climate is likely to be tough, and I know that what I hope for is quite a tall order for managers at any level. To be able to admit to mistakes, take difficult decisions and be open to new ways of doing things is going to need people who have resilience, courage and humility. I suspect that these are qualities that don’t just provide reassurance, but that they also make for a more engaging style of leadership – perhaps HR leaders need to work out how to attract, develop & retain the managers who can genuinely demonstrate these. Maybe these difficult times need not only a different style of leadership, but also to draw from a different pool?

Friday, 8am I was standing in the coffee shop queue for my normal mocha caffeine fix. There is always a buzz in that place and they do make great coffee. Unfortunately everyone else thinks so and there is always a queue. Normally this would frustrate me as I am not one for queuing, so why do I keep coming back?

 

So the product is good, but I could go down the road and get the same thing for around the same price. It’s got to be more than that. My mental checklist while I was queuing:

• place is always clean
• you don’t have to fight for a table
• staff remember my order
• everything’s fully stocked
• it’s warm in here
• staff are chatty and show an esprit de corps 

Most items on my list would be part of a standard coffee shop checklist of things that must be seen to during the course of the day so that customers’ experience of coming in here is pleasant. These are the basics that customers expect, but the last item on my checklist, about the dynamics between the staff, is something which cannot be taught or engineered. This is what makes the coffee shop unusual and what entices me to return.

 

The staff entertain the queue by joking amongst themselves and with customers, and appear to be really enjoying their work. Watching the interaction between them makes the time spent in the queue pass quickly. This friendly atmosphere evokes an emotional response from the customer. For an organisation, being customer focussed is more than having a checklist of hygiene factors. Does really good customer focus involve some form of emotion-eliciting social experience? For example, when call centres were moved to the North East of the UK as the regional accent was considered to be the friendliest and most trustworthy.

 

To compete for business, a major part of organisations’ strategic focus is the customer, particularly in knowledge intensive and service industries. To engage customers do we first need to genuinely engage employees? Engaged employees enjoy their work and their enthusiasm and commitment is contagious. Can this behaviour be taught to any group of employees?

In the run up to this year’s budget, many economists have been arguing that a second fiscal stimulus in the region of £20billion is necessary to prevent an even deeper recession, forestall the likelihood of a still larger fiscal deficit and limit the rise in unemployment. But the UK deficit and debt burden greatly limits the Chancellor’s scope to use tax and spend measures when delivering his second Budget speech.

With the General Election looming, it is likely that the Chancellor, and most certainly the Prime Minister, would wish to have more political scope for a larger budget deficit in 2009-10. Yet that scope shrunk when the Governor of the Bank of England told the Commons Treasury Select Committee that, given the public finances, it would be sensible to be cautious about further use of discretionary measures. Any further fiscal stimulus is likely to be accompanied by a number of austerity measures for the period 2011-12 far tougher than the projected public spending squeeze announced in the PBR.

Mr Darling’s dilemma is that he wants to present a genuine ‘Budget for Jobs’ without borrowing a great deal more to fund any job generating measures. But if he wants to execute a genuine ‘Budget for Jobs’, he must consider measures aimed at keeping people in work, and investigate creative ways to keep people out of long-term unemployment.

In the PBR the Chancellor announced a 0.5 per cent increase in employers’ National Insurance Contributions (NIC) from 2011. Many have voiced concern that the NIC rise will come like a cold frost just when the green shoots of labour market recovery are beginning to emerge. The CIPD agrees that delaying that increase would be a sensible start for Mr. Darling, but cutting current contributions would bring the Chancellor one step closer to sowing the seeds of recovery. In the CIPD/KPMG Labour Market Outlook, 37 per cent of employers across all sectors named this as the policy most likely to improve their organisational resilience through the recession. 

In current economic circumstances it is vital that the preservation of jobs takes priority over pay increases. This already seems to be the case throughout much of the private sector where pay freezes are widespread and pay cuts more common than previously experienced. The Chancellor can use the Budget as a signal to employers and employees in all sectors to put jobs first when setting pay. Although Mr Darling may not wish to make a firm statement on public sector pay deals he should make clear that public sector pay and pensions provision must in due course moderate to reflect the worsening state of public finances. The Chancellor should also announce that there will be no annual uprating of the National Minimum Wage in October 2009. While this will be bitterly disappointing to the lowest paid in society, it reduces the risk of job losses in low paid sectors such as retail and leisure at a time when deflation on the RPI measure of inflation will limit the impact of a National Minimum Wage pause on people’s real living standards. 

Keeping people in jobs rather than mopping up unemployment through temporary job creation will strike many as a preferable big ticket item for a Budget for Jobs. The TUC and Federation of Small Businesses (FSB) have jointly advocated a subsidy scheme which they estimate could support up to 600,000 workers a year at a net cost to the Exchequer of £1.2 billion. However the CIPD estimates that this scale of subsidy would involve a net cost of £2.4 billion a year. Subsidies for short-time working are prone to deadweight effects and may deter necessary economic restructuring. Any subsidy should therefore be targeted on industries it is most likely to benefit, such as manufacturing.

In the forthcoming CIPD/KPMG Labour Market Outlook, 56 per cent of respondents from the manufacturing sector said they were most likely to use a short-time working subsidy, compared with an overall average of 28 per cent. They were also most likely to say that it would make a difference to their organisational resilience (27 per cent as compared to 8 per cent). It would also be sensible to limit eligibility to businesses that have already been operating short-time working as an alternative to redundancy in order to enable them to extend the practice for a longer period. 

Furthermore, countries already using the subsidy have not been immune from difficulties. In Germany, often seen as the bastion of short-time working, businesses are reporting that despite months of subsidies, payroll costs still need to be slashed and redundancies this summer are likely. The consensus in the UK is that a widespread short-time subsidy would be too little too late.

An ambitious addition to the Chancellor’s policy armoury would be a temporary job creation programme targeted directly at the young unemployed or long-term unemployed. This could operate as a last resort for jobless people for whom the other existing measures have not proved suitable. 

On the face of things a job creation programme might look expensive. However, the CIPD’s estimate of the job creation potential of various spending options in fact suggests that the Chancellor could make a policy virtue out of fiscal necessity by highlighting the merit of a targeted job creation programme compared with tax cuts or untargeted spending measures. Based on the experience of previous UK job creation programmes for the unemployed, the CIPD estimates a net cost of £5,500 per place per year on such a programme in 2009-10. The Chancellor could announce an initial programme with 250,000 participants at a net cost of around £1.4 billion. The programme would be in operation by the beginning of 2010.     

This costing assumes participants are paid what they would have received in benefit, plus a top-up payment and work-related training for one day each week to avoid the common accusation that such programmes are a form of Workfare. The jobs created would be operated primarily by local voluntary sector bodies and geared toward environmental improvements under the title Green Action Projects (GAP). Participants would be offered a ‘GAP year’ as an alternative to unemployment but would not be compelled to participate.  

By definition, job creation schemes directly impact on employment. whereas other forms of public spending can be devoted to non-labour items or increases in public sector pay, while cuts in personal income tax or VAT can be absorbed as savings and/or in part be spent on imported goods and services.  

A given increase in public borrowing to finance a targeted job creation programme would generate:

* 25 times as many jobs as an equivalent sum used to cut personal income tax
* 21 times as many jobs as an equivalent sum used to cut VAT
* 12 times as many jobs as an equivalent sum used to increase public investment
* 8 times as many jobs as an equivalent sum used to increase current government spending

The CIPD believes that spending targeted directly at providing employment opportunities for the young and/or long-term unemployed offers a far bigger ‘bang for the buck’ and might make for a more creative and ambitious Budget for Jobs 2009.

I’ve noticed recently that a number of organisations I work with seem to have got themselves stuck in a vicious circle of trying to free up their employees to make decisions but at the same time putting in place more levels of control to ensure nobody spends what they shouldn’t. The result, of course, is confusion and frustration. The management intent seems to be a positive one, seeking to address the questions of “how do we enable swift decision-making and implementation by our employees?” and “How do we maintain strong corporate governance and cost control?”.

I’ve even heard of one well known high street retailer where any new expenditure over £100 has to be approved by the CEO. We’ve all heard the line, “Retail is detail”, but this seems to go too far!  These kinds of controls risk tying up senior managers in an operational quagmire, and at the same time preventing employees from using their initiative. Too many leaders talk about the importance of empowerment, but then fail to match actions with words. The challenge seems to be in providing a framework within which employees are free to act. This take time and thought but the benefits are likely to be a more agile organisation with more engaged employees.

In the world of the matrixed organisation, more & more people are needed to step into leadership roles and at the same time to be a member of other teams. A more project-driven organisation requires people to have this flexibility and a freeing-up from the hierarchy of the org chart. It’s also about ensuring that customer service decisions can be made close to the point of impact. The old Back to the Floor series seemed to highlight the mismatch between executive intent and the frontline experience of employees. I’m thinking of starting the Campaign for Real Leadership (CARL!) to get organisations to enable effective leadership at all levels, rather than just in the boardroom!

This is an area that we are exploring through our Shaping the Future programme of research. We’d like to hear your views on this and currently have a web poll running that only takes a few minutes to complete. Follow this link:

http://www.cipd.co.uk/research/_surveys/_stfpll2.htm

The CIPD has issued the following statement ahead of this week's G20 Summit in London: 

The global economy is suffering the worst financial crisis for 70 years, the worst economic crisis for 50 years and the worst jobs crisis for 30 years. By the end of 2009 more than 200 million people will be unemployed worldwide while millions more will be experiencing severe financial hardship, the majority of them in the G20 leading industrial countries. With this in mind the CIPD calls on the G20 leaders to unlock the labour market, not just unblock the credit market for a ‘new world order of work’.

The human impact of the economic crisis is being witnessed in workplaces around the globe. Managers everywhere are having to deal with the consequences, in many cases cutting jobs, in all cases helping workers and their organisations adjust and prepare for future challenges.

The way in which organisations meet the management task of enabling their people to remain resilient at such times is primarily a matter for organisations themselves to determine. But the task is strongly influenced by the various policy decisions made by governments and other national and international bodies.

As the leaders of the G20 countries prepare to assemble in London to consider actions necessary to respond to the crisis, we in the management community therefore call upon them to ensure that global and national policy is geared not only to the short-run imperative to restore economic growth, enhance economic stability, and stimulate renewed job creation but also opens the door to a new world order of work that builds long-lasting prosperity by making the most of our human resources.

With this imperative in mind we highlight four policy pillars of a productive work agenda that both meets the need to increase work opportunities and improves the performance of people in work.

Pillar 1 More in Work

The immediate policy requirement is to restore confidence to the global financial system in order to increase the flow of credit to businesses and households. In addition a major demand stimulus must be injected into the global economy.

Each G20 should push monetary and fiscal policy levers to the fullest throttle consistent with medium term resource capacity and fiscal stability constraints. In some countries there is scope for considerable further monetary and fiscal policy expansion, though others will need to act more cautiously to reduce the risk of inflation or large fiscal deficits limiting their medium term growth potential.

Whatever the extent of their respective fiscal stimulus, each G20 country should conduct ‘employment potential audits’ so that public spending programmes are targeted to maximise   sustainable employment opportunities. As well as providing a cost-benefit analysis of the impact of public spending on jobs, EPAs would help support a coordinated approach to tackling global unemployment, which is set to rise above 200 million by the end of this year.

However, at the same time, there should be a clear restatement of the importance of ongoing structural reform designed to improve the flexibility of the labour markets. While it is widely recognised that the global financial system should be subject to greater regulation the G20 should avoid any temptation to extend regulation in general, and particularly labour market regulation. This would reduce the propensity of the global economy to create jobs and improve living standards.

If at this time of rapidly rising unemployment, G20 governments consider it necessary to offer greater support to people at risk of losing their jobs this should be undertaken within a policy framework generically referred to as ‘flexicurity’.  This encourages employment policies that aim to enhance labour market flexibility but combine these with an extensive range of welfare to work measures designed to aid and equip people who lose their jobs for an early return to work.

The principle of flexicurity also offers a bulwark against attempts to protect employment and national labour markets by preventing the offshoring of jobs or limiting the free flow of capital from which all countries eventually prosper. Workers who lose out as a consequence of the operation of open and flexible labour markets are ultimately better served by measures that improve their long-term employability rather than protectionist barriers that deny the spread of opportunity within the global economy.

The G20 should make a collective commitment to encourage the free flow of migrant workers between their countries, subject to strictly limited measures to avoid national labour market distortions created by current global imbalances in employment and income levels.

Pillar 2 Smart Work

G20 governments should do everything they can to support organisations in at least maintaining investment in work-related training during the recession.

Existing public investment in training for youths and less skilled adults should be redirected to employers to fund high quality apprenticeships.

In allocating public resources to vocational education and training G20 governments should in particular recognise the critical importance of investment in people management skills as a driver of growth in workplace productivity.

The effective management of people at work increases the return on investment in education and training, increases the incentive for organisations to invest in work related skills, and enhances the quality of working life and well being that people experience in the workplace. Effective management also extends to the realm of organisational ethics and the handling of risk, failures of which in the banking and financial sector were a major factor in causing the current economic crisis in the first place.

Skilled managers and leaders are more likely to adopt smart work practices that enable people to achieve more for any given number of hours of work, in particular by undertaking various forms of flexible working. This reduces the need for legal restrictions on working time, which while offering the advantage of protecting people from excessive hours limit the ability of organisations and employees agreeing on ways of working that can jointly enhance productivity and work-life balance.

Pillar 3 Inclusive Work

The G20 must reiterate the need for policies to prevent the global economic crisis from reinforcing existing inequalities of gender, age, race, religion and sexual orientation. However, governments should resist the temptation to seek short-cuts to greater equality that fail to understand the true underlying causes of inequality or recognise the complexity of organisational life when it comes to dealing with them.

The experience of previous recessions in many G20 countries is that teenagers and young adults and workers in late middle age and early old age bear the brunt of job losses and unemployment. The immediate priority of the G20 during the recession should be to prevent hardship to people at the opposite extremes of the working age spectrum but most especially the young.

Evidence suggests young people are the demographic group being hit hardest by this recession across the globe.  This can have a damaging effect on their lifetime employment and earnings prospect. To counter this, governments should support unemployed young people in a variety of work-related education and training initiatives.

For older people unemployment in the recession can lead to a permanent premature withdrawal from the labour market. To avoid a repeat of previous mistakes, and deter employers from using early or enforced retirement as a method of labour cost cutting.  

While action to avoid sowing the seeds of a generation of wasted talent must necessarily come at a national level, global leaders can usefully compare policy solutions and co-ordinate actions.  For the sake of the long-term benefit of the global skills base, this should be as much of a priority as freeing the credit markets. 

Government should do more to identify the social and cultural roots of inequality rather than automatically assume that this is the result of unfair or discriminatory organisational structures and practice. Good management is not helped by tokenistic ‘box ticking’ initiatives that encourage undue attention to regulatory compliance but do little to advance true diversity in the workplace.

Pillar 4 Green Work

There is now a broadly based and widening consensus that green job creation will play an important part in combating the mass unemployment caused by the global economic crisis. This also provides a unique opportunity to finance a ‘green revolution’ – a new spirit of innovation and a globally co-ordinated investment in green technologies and services.

But this welcome focus on jobs that both provide work and tackle the consequences of climate change too often overlooks the management of green work and the organisation of the green workplace. The G20 governments should be encouraging, where necessary with the use of financial incentives or business reporting requirements, a green work movement, including environmentally friendly ways of working, such as tele-commuting, and teleconferencing, and green transport initiatives.

Trillions of dollars are clearly going to be borrowed and spent by governments around the world in the coming years.  The  G20 leaders have a unique opportunity to direct this expenditure into environmentally sustainable projects. Governments should in particular be investing in the communications infrastructure and innovation to reduce the need for so much environmentally damaging international business travel.

 

Why DO organisations set up systems which allow customers to contact them with questions and complaints – and then leave them unanswered and unacknowledged? It so obviously alienates the very people you’d think the organisations would rather not alienate – their customers - I find the whole business quite baffling.
Is it a question of resourcing? DO these organisations set off with the very best of intentions, only to fall victim to their own success in building systems that tempt unmanageable numbers of customers to call in? Are there sheds full of overwhelmed customer services operatives, wiping their brows at this very moment in horror at the mounting stack of unopened pleas for information? Or are the management of these firms the dupes of slacker employees who laugh in the face of the firm’s mission and values and delete heartfelt customer communications for fun? It must be one or the other because the third possibility I’ve come up with – that the businesses concerned really don’t enough about their customers to bother to treat them with basic civility – is unthinkable, particularly in the current trading conditions.
I speak from the heart. I’m currently waiting, with increasing hopelessness, to hear back from the firm that publishes Rough Guides (I queried whether there was quite a serious error in one of their books, on the strength of which I booked a holiday) and Freesat (who have been promising to introduce BBC iPlayer to their service for some time but are vague on the details of when this might happen). Neither acknowledged my emails or indicated what their customer service standards might be, and since it’s been a month since I contacted them, I’ve pretty much decided they have more important things to do with their time than listen to their customers.
I have actually waited longer than that and still got a response. London Underground managed an impressive two month delay between my complaint coming in and a response going out, but to give them their due, they did signal their service standards at the outset and they did resolve my complaint fully and to my satisfaction. Unlike the BBC, the Man Ray Trust, an art gallery on the South Coast…
Yes, every organisation that’s ever blanked my emails remains seared on my mind. And (Freesat and the BBC aside, because I don’t really have any choice about using their services) I’ve never knowingly given my custom again to any organisation that’s treated me so shabbily. It seems indicative of a general arrogance towards customers that I find unappealing. Of course I could be wrong – maybe tomorrow a whole swathe of responses will ping into my in-box. Somehow I doubt it.

If you’ve got any experiences of customer service – good or bad – that you’d like to share, I’d love to hear them.

As I walked back to the office at lunchtime, I noticed a man wearing a large badge with the words “Don’t Panic” on it. I was struck by the good sense of the message and how much I feel we need it in these times. The analysis carried out in the media of why we’re now in recession and how some of the banks got themselves into a mess risks simplifying the whole economic situation. The potential for scape-goating and knee-jerk reactions seems horribly real, and the impact on future business management practices appears rather depressing.

 

My frustration with this is that what we often lose in situations where we ignore the man with the badge, is the opportunity to learn. Each critique of a business or leadership team is likely to mean a shutting-up and hiding away of any dubious or poorly thought-through decisions & actions. In the worst case, even anything vaguely innovative or different may also be concealed or forgotten. This self-protecting and closing up means that our ability to learn gets increasingly diminished. These are hardly surprising results given the media frenzy, so I’m left wondering what it takes for us to learn from things going wrong? It seems that the best opportunities for learning are often the difficulties we experience, certainly as a parent sometimes the painful situations are the ones that our children learn the most from. I’m not advocating that we engineer difficulty or disaster, either for our children or for management! It’s more that I hope we can develop a more common sense attitude.

 

Does this tell us something about the nature of education and personal responsibility?  I’m reminded of a story (possibly an international urban myth!) of an American manager working for a Japanese-owned business. The manager perceived he was responsible for the failure of a new multi-million dollar project and went to his Japanese boss to hand in his resignation. His boss refused to accept his resignation, saying that they couldn’t afford for him to leave as they had just spent $9 million on his development! 

 

I’d like to think that one thing we can learn from these challenging times is how we can encourage a genuine openness and a desire to learn, even when things go wrong.

 

So remember, “Don’t Panic”.

 

 

When Prime Minister Gordon Brown shakes hands with President Obama in Washington this week, the state of the economy will be foremost in both leaders’ minds.  Given that UK economy was among the first to head into recession following the credit crunch that clearly started in the US; it seems appropriate that Gordon Brown’s should be the first European leader to enter the White House with Obama to try and lead the recovery. 

 

In a sign of how intertwined our economies have become; both countries share the same challenges, not least in the jobs market.  And these are reflected in the first comparison of Labour Market Outlook surveys conducted in the UK by the Chartered Institute of Personnel and Development (CIPD) and in the US by the Society of Human Resource Management (SHRM).  It finds a marked similarity in the scale and nature of recent job losses in both countries.   Both surveys report recession-related job cuts of a similar magnitude, although it seems from our data and official data that the UK economy is experiencing its jobs downturn between three to six months later than the US.

 

The SHRM LMO survey reports that 1 in 3 US employers cut jobs in the final quarter of 2008, similar to the proportion of UK employers planning job cuts in the first quarter of 2009 according to the CIPD. However, the SHRM survey suggests slightly fewer first quarter US job cuts – with 1 in 5 employers planning to cut jobs – which, if the similarity of experience continues, might indicate that the worst of the current UK jobs cull could be over by Easter. 

Both LMO surveys show that the manufacturing sector is shedding staff at a higher rate than the rest of the economy, followed by private sector services.  Both surveys also indicate that managers and professionals are being relatively hard hit.  

 

So what does this mean for UK employment prospects in 2009 and beyond?  Well, for that we first need to look at the US official data to give us a rough guide as to what might happen here.  In proportionate terms the 2.6 million jobs lost to the US economy in 2008 is in line with the CIPD’s expectation that the UK economy will shed at least 600,000 in 2009.  We have also seen US unemployment rise faster during the past six months than at any time since the start of the credit crunch, with the rise affecting men more than women.  This is not surprising given that the sectors most affected by the credit crunch are male-dominated, such as manufacturing and production, construction and finance.  This looks set to become a bigger feature in the UK economy too, but it would be wrong to treat this recession from the perspective of any particular gender. 

 

In similar vein, our country’s leaders need to look beyond the perspective of their own countries given the global nature of it.  Much is often made of the ‘special relationship‘ between the US and UK; a term used to reflect the close military cooperation between the two nations.   Both leaders now need to use this relationship to reiterate their mutual opposition towards protectionism and support for public investment to prevent even more job losses on both sides of the Atlantic.

 

An intriguing typo in yesterday’s newspaper coverage of the 2009 Oscar awards ceremony. Apparently, British actress Kate Winslet won a statuette, triumphing over her chief rival Meryl Streep who gave a polish (sic) performance as a nun in the taut drama Doubt. I presume it should have been polished, though the error did make me ponder on Ms Streep’s ethnic background and the possibility that she is a dab hand at fixing problems with her U-bend and regularly tucks into a Carp supper.

By coincidence, Poles were in the news again today. Figures released by the Home Office show a sharp drop in the number of central and eastern Europeans registering to work in the UK. There were just 29,000 worker applications in the final quarter of 2008, down from 53,000 in the equivalent quarter of 2007 and 65,000 the year before that. Overall, applications are running at a lower level than at any time since the European Union enlarged eastwards in 2004. Separate figures published by the Department for Work and Pensions on the number of workers given National Insurance numbers in 2007/8 likewise show a drop of 4.4% in Polish migrants.

This change in trend highlights the extent to which rising unemployment and a sharp drop in the value of the pound has reduced the UK’s economic pulling power as far as eastern European migrants from the initial EU accession countries, especially Poland, are concerned. It is now clear that not only are fewer Poles coming to the UK but also more are going home too. 

Some will see this as good news insofar as reverse migration will take a bit of pressure off the UK jobs market at a time when vacancies are scarce. However, while a slower rate of inflow of migrant EU workers might eventually take some heat out of the unfortunate ‘British jobs for British workers’ row, at a time of recession and mounting joblessness it is sensible to ensure that migration from outside the EU is tightly controlled so that employers make full use of available UK and EU labour before hiring migrants from further afield.

As a result the Home Secretary, Jacqui Smith, is to be commended for her weekend announcement that the Government will adjust the recently introduced points based migration system to make it harder for non-EU migrants to enter the UK for work. Although ‘British jobs for British workers’ remains a regrettable political slogan, home grown jobless people with skill, talent and experience deserve to be considered first when home grown jobs are on offer.     

This could be the worst recession for 100 years, according to Ed Balls. But is this one qualitatively different from previous downturns? Is it possible that we’ve learned from our past mistakes and that employers are in fact trying to safeguard the collective knowledge and wisdom that we lump together under the title of human capital, in order to come out fitter and stronger when the economy bounces back? Has the penny finally dropped? 

Last week I chaired a round table debate at which the answer was definitely ‘yes’. HR leaders lined up alongside representatives of employer bodies and the trade union movement with a common message: we are all in this together, and what matters is to hold our nerve and to keep on investing in people rather than slashing and burning for short-term gain. It’s not easy: particularly in manufacturing, where lean techniques have already stripped out all the fat, but increasingly the public sector too is having to do more with less. 

But despite the scale of the challenge, people passionately want it to be different this time. Just today I received an email from a firm of Cardiff-based lawyers offering ideas on alternatives to redundancy. Dolmans Solicitors would presumably earn a lot more fees if their clients did resort to redundancy rather than cutting back on their marketing budgets as they suggest, but as they said in their email: “It’s not about crisis management, but long term planning and realising there’s got to be a different way of looking at things.” Good for them. 

On a larger scale, the CIPD and Acas have teamed up to offer guidance on how to manage your way through the downturn which every employer ought to get their hands on without delay (http://www.cipd.co.uk/subjects/emplaw/redundancy/_hwmngwrfrcs.htm)

My question to you is, what’s the picture like where you are? Are you seeing organisations adopting innovative and far-sighted solutions to preserve jobs while improving their performance? Or is this a Groundhog Day recession?

It was a truly depressing weekend for British society. Aside from the now familiar tales of financial doom, our increasingly trashy celebrity culture has even managed to turn Jade Goody’s terminal illness into a media event. And if things weren’t bad enough the newspapers were full of the ’13 year old dad’ story which makes one despair about the moral state of the nation.

My mood was not lifted by the reported prospect of the BBC’s soon to be launched remake of comedy The Fall and Rise of Reginald Perrin. Remakes are rarely a good idea (take a look at the new Minder now showing on Five, which even fails to improve on Dennis Waterman’s original rendition of the theme tune, and you’ll see what I mean). The only good omens for the updated Perrin is that the always excellent Martin Clunes is taking on the title role originally performed by the late great Leonard Rossiter, while series creator David Nobbs is on the writing team.

I was at university when the comedy first aired in the 1970s and thus too young to appreciate the full power of the underlying theme: a man in his forties undergoing a mid-life crisis while confronted by the daily grind of office life, office politics and the absurdity that sometimes passes for management and leadership within organisations. Reggie Perrin’s mad, sad and bad boss CJ (of “I didn’t get where I am today...” fame) is a caricature of individuals I guess most of us have come across, people who rule by fear and consider themselves top performers because fawning colleagues are too scared to do anything but massage their egos.     

If, as in Perrin, anxiety and paranoia take centre stage in a comedy the humour is bound to be black. And in similar vein it doesn’t come much darker than Nigel Williams’s comically disturbing take on HR, another look at the vagaries of organisational life which, by coincidence with the imminent return of Perrin, has just begun a six week run on BBC Radio 4.

The first episode of the half hour series of HR was based around an appraisal. This was not so much a literal depiction of a poor performance appraisal – though the programme script will inevitably make its way onto training courses – as a metaphor for the angst that permeates today’s workplace. The, possibly faux, naïve Peter (played against type by the usually suave Jonathan Pryce) presents an uneasy challenge for jittery head of HR, Sam (Nicholas Le Provost). Both men are ‘of an age’ in their organisation and clearly know each other well (perhaps too well given mutual experience of boozy staff away-days) which makes this pre-appraisal meeting especially troubling for Sam.

A slightly patrician old school personnel manager turned HR professional, Sam is unsure whether to act tough or tender having received a tape of Peter’s extremely foul mouthed telephone tirade against a valued but irritating client. Sam wants to show understanding but is fearful of the unseen ‘powers that be’ lurking ominously beyond his part open office door. The possibility that his ‘secretary-cum-personal assistant’ – with whom Sam is himself frequently entwined in what might be called an intimate 360 degree appraisal – might overhear seems a matter of extreme concern.

The result is that Peter and Sam gyrate in a ritual appraisal from which they eventually part amicably yet both with their personal dignity sullied. Neither enjoys the experience, neither feels better for it. They have nonetheless fulfilled their duty, with Peter on guard for what lies ahead. Meanwhile, occasional ‘noises off’ of staff elsewhere in the organisation shows all adopting a casual approach to their work, their efforts accompanied by regular bouts of time wasting. Performance appraised, performance sustained. Business as usual. Laugh? I nearly cried.      

 

“Just when you think things are never going to get better: they get worse!” The immortal words of Victor Meldrew, ageing everyman and latter day Job, whose bizarre travails were portrayed in BBC television comedy One Foot in the Grave, neatly sum-up my mood when looking at the current UK jobs scene.

This week the CIPD and KPMG publish the findings of our latest quarterly Labour Market Outlook (LMO) survey, a regular check, conducted by Ipsos Mori pollsters, of what employers reckon will happen on the recruitment, redundancy and pay front in the next few months. Worryingly the winter 2009 LMO survey indicates that job prospects are deteriorating at an alarming rate.
 
More than one in three (36%) of employers plan to cut jobs in the first quarter of 2009 – double the proportion expecting to make job cuts at the time of the previous LMO survey in autumn last year. Overall there is a negative balance of -9 percentage points between the proportion of employers planning to cut jobs and those planning to hire additional staff (27%) This is the first such negative balance recorded in the LMO’s five year history 

The latest LMO survey also finds that employers intend to keep a much tighter rein on pay increases in the coming months. Those who plan pay reviews expect staff pay to increase on average by 2.6% - much lower than the 3.5% average increase expected in last autumn. And one in eight employers won’t conduct a pay review at all in 2009.

All this suggests that the labour market outlook for 2009 as a whole is likely to be even worse than expected at the turn of the year when the CIPD forecast the economy would shed 600,000 jobs. That figure will now probably be closer to 750,000, with the UK facing the possibility of a bigger jobs cull than in any recession since the Second World War. 

Official statistics later this week will confirm that unemployment passed 2 million at the end of 2008. It now seems inevitable that the jobless total will top 3 million – possibly by quite a wide margin - before the jobs market finally starts to recover. And the sombre story looks very much the same in all the world’s developed economies.

The CIPD’s ‘cousin’ organisation across the Atlantic, the Society of Human Resource Management (SHRM), launches its own version of the LMO in the next few days. It too will paint a grim picture and follows frightening official United States jobs figures published at the end of last week. According to the US Labor Department the economy has shed 3.7 million jobs since the recession began stateside in December 2007. Nearly half these job losses occurred in the last three months alone, highlighting the lightening speed at which the US labour market is contracting. The unemployment rate is now 7.6% (in human terms that’s 11.6 million people), higher than at any time since 1992 and clearly still on a rapidly upward path.

On first seeing these numbers, and what our own UK LMO data are telling us, my initial response was to utter Victor Meldrew’s best known catchphrase “I don’t believe it!” Sadly, however, the data show the stark reality – and there is likely to be worse news to come before things begin to look better. 

I’ve been struck in the last few weeks by the experience of customer service in day-to-day life. I think that the “customer experience” is a combination of the product or service and the human interaction that goes with it. My attention was grabbed by a story reported a few weeks ago on the BBC news website that suggested that poor service could contribute to the loss of 50,000 jobs in the hotel & restaurant industry. I’m away from home quite often with work and I’ve noticed an improvement in the service in business hotels in the last few years. Although in one hotel I use regularly I’ve had the impression the little extras are starting to disappear in a bid to cut cost. So is good customer service the result of nature or nurture? This debate has raged for years in terms of personality, but I wonder if it also plays into how organisations can deliver better customer service. How much is it about what you recruit for in your staff and how much comes from the environment in which they work, in terms of culture, resources, management and so on?

A couple of other recent experiences gave me a very positive feeling about the state of human nature and the standard of customer service in England. The first was on the train home from London the other day. My train was delayed and there was little information provided at Waterloo to keep us up-to-date with what was happening. I could feel my stress levels rising as evening plans looked like going out of the window with a late arrival home. When the train arrived the guard made regular announcements as to our progress and he sounded as if he was genuinely sorry that we were being delayed. His communication wasn’t necessarily the most polished, but that wasn’t the point. The point was that in spite of the poor running of the trains he was doing his very best to keep his passengers informed. Part way through the journey we faced yet another delay with a points problem and again he gave us regular updates and apologised for the delay. He actually came into the carriage to tell us direct rather than using the train tannoy. Whilst the guard couldn’t give us any good news, his natural human approach actually bought a lot of good will with passengers.

The other experience came when my daughter broke her ankle two weeks ago and our experience of the Fracture Clinic. The staff there were clearly under a lot of pressure and yet we were seen before her appointment and the human interaction was excellent. The registrar made time for us, the plaster technician was funny and distracting (important for a 15 year old in pain), and a letter required for schools was ready within 5 minutes.

In both the train and hospital experience, the employees appear to be working in environments that could easily conspire against good customer service. So it leaves me wondering what is it that enables some people to transcend their working conditions and create a positive experience? Whilst investment in training & development is something I’d always encourage, I wonder how much customer service training is falling on fallow ground?

Given these difficult times managers need to think about how they enable their people to deliver good service when resource may be limited. I suspect there’s a real risk that if we develop an “austerity” mindset to managing our organisations then that will inevitably transfer itself to the experience of customers. Empty shops in the High Street with anxious or unhappy looking staff are likely to struggle to attract anyone inside. Perhaps managers need to remember that sustaining a team ethos and the occasional smile doesn’t cost anything!

It was Brrr! meets BERR on the radio this morning. No sooner had the weatherman reported on a major ‘snow event’ – yep, rubbishy management speak has now sadly infected every aspect of life – up popped Lord Mandelson, the Secretary of State for Business, Enterprise and Regulatory Reform. Within seconds Mandy was being grilled by the Today programme’s attack dog in chief, John Humphreys, on the rights on wrongs of the series of unofficial strikes that have spread from the dispute over employment of foreign workers at the Total oil refinery in Lincolnshire. This, both interrogator and interrogated agreed, posed a potential threat to energy supplies as temperatures across the country dropped well below freezing.

The juxtaposition of strikes and snow immediately brought back memories of previous recessions and images of pickets huddled around braziers to keep warm as they sought to protect their livelihoods in the face of bitter economic winds. There is something about the cold that seems fitting with the sense of bleak reality which accompanies financial hardship. The resulting human despair was perhaps best portrayed in fiction in Alan Bleasdale’s Boys from the Blackstuff, which aired during the dark era of sharply rising unemployment in the 1980s. Being a scouse drama, Blackstuff  was inevitably a touch heavy on sentimental tragi-comedy. But British drama has always tended to look at the comic side of economic adversity, as demonstrated by that other well known early Eighties television series Auf Wiedesen Pet, and the post-Nineties recession film The Full Monty.

I recalled these dramas last week when preparing to take part in a BBC Radio 3 arts programme discussion of a new film, Tokyo Sonata, by acclaimed Japanese director Kiyoshi Kurosawa, which has just opened in cinemas across Britain. Kurosawa presents a highly realistic account of the personal pain and relationship fall-out of losing one’s job. It is one of the best such depictions I have seen, though as normally a director of existential horror movies Kurosawa can’t resist taking the film down a slightly absurd path which detracts from its realism.

It will be interesting to see what, if any, new British drama emerges from the current recession. In our more diverse times we might see the plight of jobless women or minority groups depicted as well as that of men. I pray we are spared yet another celebrity based television experience. Imagine Celebrity Soup Kitchen where the poor and dispossessed vie to be fed by the likes of Cheryl Cole or Victoria Beckham (the ironic twist being that the emaciated celebs in question will look more in need of grub than their pauperised public).

It would be good, however, to see something in fictional dramatic form that challenges the worrying undercurrent of xenophobia evident in the current rash of unofficial strikes. While I have every sympathy for people anxious about their job prospects, the sight of strikers holding up placards proclaiming ‘British Jobs for British Workers’ sends just as much a shiver down my spine as today’s ice cold temperatures.
 
   

The Government has recently announced a range of positive measures to try and minimise unemployment during the recession and help people who lose their jobs back into work. However it is important that policy makers don’t just focus on the risk to jobs and also understand the potential impact of a severe and long-lasting economic downturn on people’s mental health.

 

The World Health Organisation and the charity Rethink have both warned of a surge in mental health problems as a result of the economic crisis. Worries about debt, home repossession, job insecurity and redundancy mean that people are increasingly vulnerable to mental health problems. Add to these pressures, increasing work intensity, change and conflict in the workplace and you have the perfect ingredients for spiralling numbers of people suffering from stress and other mental health problems.

The proportion of people claiming incapacity benefit that suffer from some form of mental or behavioural problem has already climbed to nearly 40% from about 28% in 1997. Research by the Health and Safety Executive has tracked a significant increase in ill health linked to work-related stress since the mid-1970s. These trends are likely to continue to grow in today’s challenging economic climate unless government takes positive action.

The cost of failing to act is likely to be very significant to individuals, employers and society. Stress and other mental health problems are, behind musculoskeletal conditions, the biggest cause of time lost to employee absence. Mental health problems are also a major cause of presenteeism – where people attend work but fail to perform because of ill-health. CIPD research finds that stress is associated with lower levels of employee motivation and commitment, as well as conflict in the workplace.

Mental ill health also increases the likelihood of physical health problems. For example research links depression with several major health conditions, including coronary heart disease, diabetes, cancer, chronic pain, disability, chronic fatigue and obesity. A recent report by the Stress Research Institute at Stockholm University based on a study of 3,122 Swedish male employees found that the stress associated with poor managerial leadership was linked to an increased risk of heart disease. The study showed that employees that had clear goals set by their manager and were developed and supported by their manager were less likely to suffer from heart disease. Other management behaviours that had a positive impact on employee coronary health included praise and employee involvement in work scheduling.

Encouragingly, the Government has identified the potential risk to public health and productivity if this issue is not tackled effectively through its recent report Mental Capital and Wellbeing by the Foresight programme at the Department for Innovation, Universities and Skills, which is responsible for horizon scanning and in-depth analysis of new policy challenges.

The workplace and employment are seen as absolutely central to good mental health and resilience by the report, which puts forward a number of policy recommendations to help support positive mental health, as well as to help people with mental health problems remain in and return-to-work.

These include: 

• stimulating the demand for learning and skills development in individuals and employers through: incentive systems for employers, building on Train to Gain; and locally-led and focused schemes using loans or financial incentives to empower individual demand.
• the extension of the Right to Request flexible working to all employees with children aged 18 or under, or alternatively to all employees
• the creation of a Workplace Commission – something the CIPD has called for – to raise awareness of the importance of good people management to supporting healthy and productive workplaces and to ensure that new employment legislation is fit for purpose
• better training for managers so they understand the impact they can have on mental health and wellbeing. The report picks up on a CIPD suggestion that a greater proportion of public funding on skills should go to providing training in people management skills for managers, particularly among SMEs.

The last two recommendations are critical because of the strong link between good people management and positive mental health, both in terms of preventing people developing mental health problems in the first place, as well as enabling people to manage and recover from mental ill health.

Following the publication of the Mental Capital and Wellbeing report the Government has been pushing ahead with developing a new Mental Health and Employment Strategy to increase the proportion of socially excluded adults with serious mental health conditions in employment, education and training.

 

However it is crucial that the strategy places enough emphasis on preventing people developing mild or moderate mental health problems if the stigma that still exists around mental health is to be tackled effectively. An estimated one in four people will suffer from mental health problems during their lifetime with the majority of these coming under the category of stress, anxiety or depression. Eradicating the stigma that surrounds such problems is vital if people are to feel confident to discuss mental health problems without embarrassment in the workplace and without fearing that they will lose their job or damage their career prospects. 

It is these mild and moderate forms of mental ill health, which because of their prevalence, will also have most impact on productivity and public health.

 

Key to tackling stigma and preventing people from suffering from mild and moderate mental health problems will be how they are managed at work on a daily basis.

 

CIPD research shows us that:

• Line managers are most likely to be bullies in organisations
• Poor line management is one of the top reasons for conflict at work
• Managers are also central to effective conflict resolution if problems are to be picked at an early stage before they escalate
• Management style is one of the top causes of stress in the workplace
• Managers are key to flexible working practices being embedded effectively
• Line managers increasingly play a key role in developing, supporting and accelerating learning at work
• Line management behaviour is key to individuals making successful and supported returns to work
• Line managers are central to effective implementation of absence management practices that provide a framework for the identification and management of mental health problems
• Managers are central to good equal opportunity practice and the promotion of diversity

Line managers are also vital if the warning signs of mental health problems, whatever the cause, are to be picked up at an early stage so that people can be referred to OH and other sources of specialist support and where necessary treatment. Consequently policy interventions such as the Right to Request flexible working legislation and Train to Gain skills funding should be recognised in the strategy as supporting positive mental health at work through good people management if there is to be an integrated approach to tackling this issue across government.

 

Just as importantly the Health and Safety Executive’s stress management standards, which provide step-by-step guidance to conducting a risk assessment for work-related stress, should be identified as a useful tool to ensure that this issue is seen as a priority among employers. Employers already have a legal obligation to conduct a risk assessment for work-related stress under health and safety law but the Health and Safety Executive has very rarely used its enforcement powers. If the HSE’s inspectors issued more improvement notices against the worst employers that blatantly fail to take action to manage high levels of stress, then organisations would take their risk assessment obligations in this area more seriously.

 

Managing stress effectively does not just mean conducting a once a year staff attitude survey, it involves line managers on a daily basis managing people properly and spotting the warning signs that indicate that people are struggling to cope. Return-to-work interviews, formal staff appraisals, as well as informal one to one conversations all provide opportunities for managers to discuss employee wellbeing issues with the people they manage.  Of course, as touched on already management style and excessive workload are among the top cause of stress and so it is important that managers are given the training to prevent and manage stress. Joint research by the CIPD, the HSE and Investors in People has identified the four key areas of management competence associated with effective stress management:

 

Respect and responsibility

This is about treating staff with respect, including acting with integrity, managing emotions and being considerate. For example, managers must act calmly in pressured situations and take a consistent approach, as opposed to panicking or exhibiting mood swings. Ensuring deadlines are realistic, giving more positive than negative feedback and showing consideration for staff’s work-life balance are other key elements. Honesty and integrity become all the more important during a credit crunch as the difficult conditions will make staff more suspicious; managing emotions will also be particularly hard and particularly important during tough times.

 

Managing and communicating existing and future work

This includes proactive work management, for example, communicating job objectives clearly and monitoring

workloads, developing action plans and prioritising.  Dealing rationally with problems and being decisive are key

elements.  Managers also need to keep staff informed and encourage their participation, for example through

team meetings and individual discussions: however, they need to judge when to consult staff versus when to

make a decision without doing so. Helping staff develop and acting as a mentor are also important.  Proactive

work management and good communication are particularly important when the pressure is on to hit targets and

many people feel uncertain.

 

Managing the individual in the team

This is about speaking to people personally rather than using email, providing regular opportunities for staff to

speak one-to-one and being available to talk when needed. It may be as simple as being willing to have a laugh

and socialise with staff.  It is vital to recognise that every individual is different, so managers need to see others’

point of view and understand what motivates them, regularly ask staff how they are and treat everyone with equal

importance.  Being able to treat each individual as unique and recognize their different needs is vital in tough

financial conditions as different staff members are likely to need different types of support.

 

Reasoning and managing difficult situations

This involves dealing objectively with conflicts and acting as a mediator, then following up conflicts after

resolution - seeking advice from others where necessary and supporting staff through incidents of abuse and

bullying. Managers must make it clear they will take ultimate responsibility when things go wrong.  The risk of

conflict and bullying seems to increase during financial downturns, so managers need to be ready to address

incidences early so as not to let them damage well-being or performance.

 

One way of making the link between positive line management behavior and mental wellbeing using existing policy levers could be through the HSE and public skills funding via Train to Gain.

 

HSE inspectors should be able to recommend that organisations that fail their stress management obligations under health and safety law through poor people management contact Train to Gain brokers to access funding assistance for appropriate management skills development. 

 

Looking forward, it is crucial that the Government’s Mental Health and Employment Strategy takes into account the role progressive people management and effective work organisation plays in people’s mental wellbeing.

 

In a recessionary environment, where people will be under increasing pressure as work intensity increases and worries over job security grow, with limited opportunities to find alternative employment, how people are managed and developed becomes even more critical in terms of supporting positive mental health.

You have to feel a touch of sympathy for George W. Bush. Had he fluffed the Presidential oath of office the media would have had a field day, ‘oaf of office’ a likely newspaper headline. Barack Obama does so and nobody seems to care. Indeed, most commentators also went out of their way to talk up what, let’s be honest, was a fairly ordinary Inaugural Address, certainly by the new President’s own high standard of oratory.

The superstitious amongst us will doubtless see President Obama’s initial nervous vocal stumble as an ill omen (remember Princess Diana’s misspoken wedding vows?). But rather than wrap ourselves in gloom perhaps we should instead look on the bright side and recall an earlier Inaugural Address -  that delivered in March 1933 by incoming President Franklin D. Roosevelt. FDR’s speech has been given plenty of air time of late, coming as it did in the aftermath of the 1929 Wall Street Crash and the onset of The Great Depression. The parallels with today’s global financial crisis are striking as is the power of Roosevelt’s famous call to action: “the only thing we have to fear is, fear itself”. 

These words are just as relevant for us in the recession of 2009. At worrying times like these, when tens of thousands of people are losing their jobs, it might seem as though nothing can be done to counter the rising tide of unemployment. Politicians are often portrayed as King Canute trying in vain to push back the waves. Not surprisingly therefore when at the recent Jobs Summit – which I attended on behalf of the CIPD - Prime Minister Gordon Brown announced a £0.5 billion package of support for people who have been jobless for six months the sceptics were out in force. Yet while it is undoubtedly true that we can’t avoid the effects of the global economic downturn, neither should we despair.

International experience tells us that what governments do can make a real difference to how much individuals, families and businesses feel the effects of global economic shocks. And what is required above all is an active welfare regime.

The merit of welfare to work policies is clear to see. Evaluative evidence from across the globe shows that requiring jobless people on benefit to actively search for jobs is a highly cost-effective way of boosting employment which is good for jobseekers, employers and the taxpayer alike. And the need to target extra help at those who have been unemployed for longer is a key lesson learned from the UK recessions of the 1980s and early 1990s. Long-term unemployment drives welfare dependency and creates a vicious cycle that is hard to break. Put simply, the longer you are out of work the harder it is to get back into work even when the economy is strong.

In this respect we can be encouraged that the way in which unemployed people are treated has been transformed during the recent era of full employment. The return of a requirement to actively seek work, coupled with an end to the ‘one size fits all’ approach that offered jobseekers generalised help unrelated to their individual circumstances, has undoubtedly been a success. As a result, we enter this dowturn with the labour market in the best shape for a generation, suffering a cyclical slump in demand but exhibiting few major underlying structural problems. And we have a dynamic jobs market where – even as we suffer a recession – still more than 200,000 people each month flow off the Job Seeker’s Allowance claimant count.

However, there is no doubt that the welfare to work system is now being seriously put to the test as claimant unemployment rises toward 2 million. A lot will rest on the capacity of JobCentre Plus to handle ever rising numbers of new job seekers without withdrawing the intensified support that Personal Advisers and welfare-to-work providers currently give. The greatest danger, which should be resisted at all costs, would be to ease the job search obligations placed on claimants as caseloads increase. 

A lot too rests on employers’ confidence. Persuading employers to take on people who have been out of the job market for a long time can be difficult, especially when so many new relatively well-skilled individuals will be looking for work. But, if we are to avoid the mistakes of previous recessions, it is vital that we reinforce efforts to equip long-term jobseekers with the ability to fill the continual flow of vacancies that arise in the labour market even in tough times. Here recruitment subsidies to employers – such as the Government’s newly announced £2,500 ‘golden hellos’ -  can play a useful role so long as they are directly linked to individual jobseekers and carefully designed to avoid subsidising employers for recruitment that would have happened anyway. 

I remain optimistic that however tough things get this year the combination of sensible welfare to work measures, highly expansionary macroeconomic policy, and efforts to boost the supply of credit to businesses will enable the UK to travel on a faster track back towards full employment than following previous economic downturns. Resilience against recession must be our mantra, with an active labour market policy at the forefront of efforts to return to the record employment levels enjoyed in recent years.   Can it work? Yes. Will it work? I hope and believe so.

 

A few  weeks into the New Year and I’m not sure what makes me feel more depressed – the torrent of bad news dished out by the media on the doomed state of the economy or my inability to stick to the usual resolutions. Poor self-control aside, I think it’s important that whilst we need to face up to reality, we don’t let bad news take us even lower. Against the backdrop of the daily dose of job losses, likely corporate candidates for administration and the growing insecurity for individuals, we need to remind ourselves of the things that work, the opportunities that do exist and the things we can do that make a positive difference. I’m reminded of the Stockdale Paradox – the idea that in tough circumstances we have to confront the harsh realities facing us, whilst at the same time never losing the belief that we will come out the other side. Jim Collins’ identification of this paradox as a key factor in sustainable high performance is not some sort of “be glad” Pollyanna mentality, but a recognition of what people need in order to persevere through hard times.

There seems to be a real mix of reactions and responses to the economic situation that impact upon learning & development. I wonder if there are two broad camps of response to the situation? These seem to range from “cut all training spend”, to “this is the time when we need to equip people to deal with the situation and ensure that we sustain the capacity and capability”.  I think you’ll probably guess where my bias lies, but I’d like to think I’m realistic enough to know that if both liquidity and solvency have dried up then drastic action is needed.

It may be that you don’t have a budget left for Training and  Development, but that doesn’t have to mean that you lose all your learning! Let’s hope that managers take the time to draw on the collective memory of the organisation to ensure that they’ve learned from the lessons of the past. For example, what do we know in our organisation about surviving a downturn? Or, if we’ve been through something like this before, what limited us from getting out of it? It’s sad to think of management teams making tough decisions about what has to go without involving a wider range of employees. Not only does that encourage a rather too heroic brand of leadership, it also means that you’re not sharing the knowledge and learning in the organisation.

Perhaps  we need to encourage managers to develop a combined “survive and thrive” mentality that balances the realities of cutting costs when the money isn’t there, but recognises the benefits of learning in its many forms that enable short and longer term benefit. I’m not trying to be Pollyanna (not a look that would suit me!), rather an optimistic realist.

Also on the bright side, I’ve started using the stairs instead of the lift. Not as painful as I’d feared, so maybe my resolve is on the up after all!

Everything we hear in the news about the current economic situation is about large organisations and involves millions of pounds, but what does it mean for smaller businesses? To take a practical stance that moves us away from the dreariness flying at us every day, what innovative things are these businesses doing?  

I was chatting to the owners of a local roofing company about how dismal the outlook seems for businesses at the moment. I asked the usual polite question of, ‘so…have you much work on at the moment?’ They surprised me saying they were doing well.  Surely they must be affected by what is happening in the wider world, especially as construction in general is suffering.  Listening to their stories and watching them work, it was obvious they were a company with an in-built resilience and flexibility. Although a small company, the basic principles that make them successful must be very similar to other firms who are able to prosper in spite of the challenges posed by the downturn.  

Roofing is a funny business, affected by the environment in ways I didn’t imagine. They need rain to generate the work, but can’t work when it’s raining. Apparently the best combination is a hard frost, followed by a quick thaw and then a torrential downpour like a monsoon season. How others revel in our misery! The oil prices have hit them hard: they have seen dramatic increases in the price of a keg of bitumen and the cost of roofing felt has followed suit. A slow-down in construction has led to a decrease in the amount of new builds, and so the list goes on. 

In reaction to these challenges, they have had to change many aspects of their business in the last year – they aren’t afraid of doing things differently and just get on and do it. They’re working further afield, advertising in different media to target a wider customer base. They diversified on their offering to customers and now offer high tensile and torch on felt, fascias and guttering. They don’t need many extra resources to do this – they can do more with what they already have. They don’t drop their prices – this would devalue their work and could damage customer perceptions of them. They don’t drop their wage levels because of the negative effect this would have on motivation.  

They have cultivated relationships with their suppliers and customers which means they have a supportive network around them. It is amusing to watch the dynamic between them and the way they engage the customers in their banter. Most of their work comes from word of mouth recommendations: a strong reputation built on customer focus and quality of work.

Due to their ingenuity, agility and flexibility, they are riding the economic downturn and are likely to be in a strong position when the economy eventually picks up. They're not in debt and they aren't selling the family silver in the current poor trading climate. When the economy improves they will not have lost their key assets, particularly their people. 

So many organisations are doing innovative things. What can we learn from those who are still doing so well?

What are you doing in your organisation? Want to share it with us?

It might be pure coincidence, but in the three weeks since I became Director of our new Public Policy Department the CIPD has had more high level contact with Government ministers and officials than anyone can remember. We are once again genuine players in the corridors of power. It is therefore time for a festive celebration and what better than a cheery rendition of a seasonal sounding song. So, with apologies to Irving Berlin and Bing Crosby, feel free to join me as I sing:

I’m dreaming of a Whitehall Christmas
Just like the ones we used to know
When HR opinions stiffen
We make sure politicians listen
And get action on the go

I’m dreaming of a Whitehall Christmas
We’re having meetings all the time
Every day providing briefings
Addressing Parliamentary hearings
And showing HR is in the know

I’m dreaming of a Whitehall Christmas
With every ideas note I write
Now that CIPD is fully in sight
And we know workplace policy will be right

Thanks for reading my blog this year – if you have been. May I wish you all a very Merry Christmas and a most Happy and Prosperous New Year!
   

So, who did you want to win?  Alex, JLS or Eoghan or maybe none of the above.  Being a musician, but one who has tended not to watch the weekly X Factor episode; I was quite looking forward to settling down to Saturday night’s finale.    Who could but fail to enjoy the spectacle and drama of a competition that puts young, talented people in the spotlight in such a high-pressured environment?  And how refreshing is it to see young people portrayed in a positive light with shared interests and goals – a lesson for our public policymakers and a business opportunity for Facebook perhaps? 

 

Anyway, in spite of the hyperbole and clichés that came from the presenter Dermot O’Leary; I was later treated  to a couple of great performances from Alex, who deserved to win hands down.

 

However, when I heard that over 100, 000 people applied for this year’s competition and 8 million people voted, I started to dwell on a few concerns; most notably whether we are selling the right dream to our children.  For so much effort and attention, the fact remains that we have only two stars - namely Will Young and Leona Lewis – to show for several series’ worth of Pop Idol.   Is this a sign of the times, and does education risk becoming sidelined with kids’ preoccupation with becoming a Premiership footballer or a Pop Idol?  Pop Idol is fine, but I could not help but think that we need a junior version of a talent contest that promotes skills that are more relevant to the workplace; such as a public speaking competition for instance.   

 

In fact, I wouldn’t mind so much if Pop Idol might encourage more people to take part in music.  But if we were to use the participation rate in sport, which has declined in the past decade, against the increase in sports TV coverage; I fear that the reverse may be true.  It seems to me that the watching is getting in the way of the doing; which has implications for the health and the well-roundedness of our next generation.

 

What is perhaps equally resonant with recruiters across the country, is the alarming gulf between the expectations of those entering the competition.  Tens of thousands of our young people clearly think they have a realistic chance of becoming musical stars.  Not normally one to agree with Prince Charles, I am reminded of his comment a few years ago that "I'm all for raising expectation and encouragement but there also has to be a good dose of realism."  

 

Earlier, this year, the CIPD organised a breakfast with the Schools Minister, Jim Knight and many CIPD members.  And what was the dominant theme to emerge from the discussions?  Yes, you’ve guessed it; managing the high expectations of school-leavers.  What is more, the minister was really struck by the example of an employer who reported that the punctuality and attendance levels improved considerably following the decision to make drama compulsory at the feeder local school.

 

So while we should encourage our young people to be ambitious; it is up to parents, broadcasters, schools and employers to work together to ensure that our young children are doing and achieving rather than gazing at unattainable stars.

Engaged employees are essential if an organisation is to gain and maintain competitive advantage, especially in knowledge and service intensive businesses. So it follows that increasing engagement levels is a focus for many organisations. However, there are stark differences in how engagement levels are measured and tracked over time, which begs the question of what we actually mean by employee engagement? 

 

In a meeting last week I volunteered to be part of a working group to discuss the way forward on an issue that had arisen in the department. In volunteering I felt engaged as this was a chance to contribute the department’s performance by doing something I enjoy. So is engagement a feeling or an attitude? But then I thought, well, surely that’s not enough. I actually have to attend and contribute to these meetings if my feelings of engagement are to benefit the organisation. An attitude of being engaged is necessary but not sufficient. There needs to be a behaviour. For sure, the resultant behaviour has to be of intended benefit to the organisation (either directly or indirectly) to be engagement. But I suppose then the question is raised about whether intention is enough – do we need to track the outcome to be able to say employees are engaged. Should employee engagement be measured as an attitude, a behaviour, an outcome, or a mixture of all three?

 

Considering employee engagement in this way, I can’t help but wonder how it is different from other outcome-related concepts such as organisational citizenship behaviour or extra-role behaviour; or attitudinal concepts such as job satisfaction and commitment. Is it an umbrella concept?

 

A final thought: can we have a universal accepted definition and measurement of employee engagement? Or is it more particularist, meaning different things to different organisations in different contexts? Although I am a firm believer in the value of employee engagement to both organisations and the individuals within them, there are questions which remain unanswered. Ultimately, will we still be referring to it as employee engagement in five years’ time? Or will the same concept (as it is most certainly valuable to organisations) present itself under a different guise?

 

 

Employee engagement is a key part of the Shaping the Future research programme.  Find out more about the programme.

 

What are your thoughts on engagement? How is it encouraged and measured in your organisation? Do you think the concept of engagement will stand the test of time?

There are so many talent shows on television at the moment that I often get them mixed up. Tuning in last Saturday I briefly thought I was watching another blatant BBC funded commercial for one of Lord Andrew Lloyd Webber’s musical productions. On closer examination, the seriously ugly mug in view turned out not to be that of the Earl of auditions but instead belonged to X Factor judge Louis Walsh, whose often pained expression made me think that he might have had too many dodgy Irish pork sausages for breakfast.

Louis was at least pleased that his boy band mentees reached next week’s final (which I’ll have to make sure I miss). The loser was an attractive young blonde girl with a singing voice reminiscent of one time British acting legend, the late Jack Hawkins (after his major throat op that is). Her departure, like that of all those kicked off the stage, escorted from the dance-floor or ejected from the jungle in such shows, was accompanied by floods of tears, over enthusiastic hugging, hypocritical expressions of regret by the judges, and proclamations of great times had and friendships forged. I personally wish more of the failed contestants would berate their rivals or plant a Liverpool Kiss on the forehead of the likes of Arlene Phillips. But perhaps it’s not a bad thing that most high profile losers are dignified when being given the elbow especially if, at a time of mounting redundancies, it teaches the rest of us that it’s best to stay calm and remain positive when handed our P45.

This is certainly the message from government ministers now that unemployment is set to rise well above 2.5 million again. Although the government doesn’t forecast what will happen to the jobs market, its expecting the worst and is in the process of recruiting 6,000 extra jobcentre staff, reversing the trend of recent years which have seen jobcentres being shut. The Work and Pensions Secretary, James Purnell, has been given £1.3 billion of extra funding for measures designed to keep the lengthening dole queues in check, including an extension of rapid response training and job search assistance to help people as soon as they hear they are to be made redundant. But Mr Purnell expects that in return for this help both the newly jobless and those long-term out of work and living on state provided benefits should demonstrate that they are doing as much as they can to get back into work.

The government’s renewed commitment to the rights and responsibilities ethos is evident in the Welfare Reform Bill, which featured in last week’s Queen’s Speech to Parliament, and in the recommendations of a government sponsored review conducted by leading economist and labour market and welfare expert Professor Paul Gregg.

Having examined both UK and international evidence on this subject Professor Gregg reckons almost all those on benefit should be expected to be actively doing something to prepare for a return to work and should receive benefit only on condition that they do so. Lone parents with babies younger than a year old, the very severely disabled and full-time carers would be alone in not having to meet this condition. Mr Purnell will this week publish a White Paper outlining how the government proposes to take forward the findings of Professor Gregg's review.

Professor Gregg’s ideas, and Mr Purnell’s legislative proposals, have received a hostile response from the welfare lobby. The government is accused of punishing the jobless at a time when there are fewer jobs available. Some critics even go so far as to argue that existing conditions on receipt of benefit should be relaxed at this time. Such opposition is well intentioned but completely misguided.

The experience of previous recessions, both in the UK and abroad, is that the best way to prevent a substantial and prolonged rise in unemployment is to ensure that people on welfare remain attached to the labour market, search actively for openings amongst the thousands of vacancies that come onto the market even when times are tough, and prepare themselves to take early advantage of the opportunities that will arise when things improve.

Too often in past recessions governments have gone soft on benefit conditions only to find that this results in a build-up of long-term unemployment and chronic welfare dependency. As a result, unemployment has tended to peak at a higher level than necessary and, in particular, taken longer to fall back during economic recovery. Indeed, high profile news stories in recent days have highlighted to extent to which a failure to incentivise jobless people to find work has resulted in some reaching their thirties and forties without ever having held down a job, rendering them prone to all manner of errant anti-social behaviour. This is as bad for the individuals concerned as it is for the rest of us – which is precisely why some welfare reform protagonists refer to the rights and responsibilities ethos as ‘tough love’. In hard times such as today, Britain’s jobless people need to stay in condition. Society should do all it can to help them but we also have a right to expect something in return.        

 

Older readers will remember a time when ventriloquist acts were all the rage. When I was a kid they were always on the telly. Yet I can’t recall the last time I saw one. It was with a sense of nostalgia therefore that I watched The Queen deliver her annual speech to Parliament earlier today. Her Majesty frequently looks bored when spouting the words put into her mouth by the Government. Little wonder. Reading out a list of Bills to be considered in the course of the new Parliamentary session is enough to make anyone yawn. But at least on this occasion the Monarch’s constitutional duty was fulfilled in a relatively short space of time. The Queen spoke for just 7 minutes, ministers having decided on the lightest programme of proposed legislation in a decade.

I must confess I rarely take much notice of this event. But this year is different. The more observant among you will know that I am the CIPD’s Chief Economist. At the start of this week, however, I also began work as Director of the Institute’s newly established Public Policy Department. My team will beef up the CIPD’s thinking on legislation affecting the workplace and enhance our influence with Government and opposition parties. I’ll begin meeting Cabinet ministers and shadow spokespeople before Christmas to start putting across our view. I’ll be placing our existing policy positions under the forensic microscope too, so I was particularly interested in The Queen’s references to Bills relating to skills training and the promotion of gender equality at work.

My economist’s eye will also focus on a significant policy decision not directly referred to by Her Majesty but made to coincide with her Speech i.e. confirmation that the statutory right of employees to request flexible working will from April 2009 be extended to parents of children aged up to 16. 

The right to request was originally introduced five years ago for employees with children aged under-six or disabled and subsequently extended last year for those with an adult to care for. Ministers reckon the right has greatly benefited working parents, carers and employers alike. Evidence suggests the law has pushed on an open door, with hardly any requests from amongst the 6 million eligible employees being turned down. A review completed earlier this year by J Sainsbury’s HR director Imelda Walsh recommended the right be extended to all parents of children of compulsory school age. Until today, however, there was a suggestion that the Government might reverse its initial decision to implement Ms Walsh’s recommendation in April next year and postpone implementation because of the recession.

Business groups had lobbied the business secretary, Lord Mandelson, for a delay and will be disappointed by today’s announcement. The CIPD by contrast is joyous. The Government has given the benefit of the doubt to our view that a delay would have conveyed the impression that flexible working was a burden on business and thus have damaged efforts to promote the wider business case for moving in this direction. Our evidence based contention is that flexible working is good for employers and employees alike, staff working in this way being happier, more engaged and more productive.

Yet while the business case is indeed strong one can see why some business people question the merit of extending the statutory right at this particular time. Employers who recognize the benefits of flexible working in an economic downturn will doubtless already offer it to their staff. But those that aren’t doing so might not be well placed to immediately respond to requests when times are tough. This increases the likelihood that more requests will be turned down – which could actually reduce employee engagement and, at worst, trigger a rise in employment tribunal cases, probably the last thing hard pressed employers need in a recession.

Policy makers should always strive to strike a sensible balance between improving working conditions and not putting an undue burden on business. The Government, with the CIPD’s support, reckons early extension of the right to request flexible working to parents of older children does so, regardless of the timing. We’ll soon find out.