by Timothy Barlow
Why is the oldest Industrial Nation with the greatest opportunity to learn from experience the least productive in the G7?
If current socio-demographic and GDP trends are the consequence of our actions and that our culture and work ethic delivers our GDP results; which factors contribute to increasing our employees desire and ability to work, can they be identified and will we address them?
How much does the socio-demographic environment in which our people live, affect their ability and desire to work?
Professionals of the Arts, Humanities and the Sciences study the history of their subject, so why don’t business people know their history of business or business decision making?
We have a mature economy, we have an established class system with an affluent middle class, our governments provide a (very) laissez-faire guardianship of commerce, we have a welfare state, health system and our education systems are among the best in the world. But for the last thirty years our expectation of rising standards of living and increased wealth has not materialised, generation rent and the bank of mum and dad has. We have a north-south divide and regional inequalities.
Saying ‘economic collapse’ in relation to the UK seems dramatic, but signs of on-coming economic decline can be identified in many areas of life including: creaking infrastructure, weakness of the tax base, grocery shops closing, an increase in the number of shuttered store fronts on a high street, clothing retailers closing, homes being rented out and having a much shorter tenancied period, people working in less-skilled areas for which they have trained to simply keep an income coming in, potholes not being repaired, high debt levels in the economy (personal), increasing government borrowing, unstable or weak government, trade wars, prices rising while salaries are not, oil price hikes, increasingly powerful media outlets, increasing cultural divides between government ministers and their electorate and the increasing divide between the ‘haves’ and ‘have nots’; do tie in with economic decline.
Prior to WW 1 the major economies were linked to the Gold Standard and worked together loosely to maintain parity. Laissez-faire existed and legislation did not burden business. The last of our Victorians were readying to pass the baton of empire, prosperity, wealth and knowledge into the twenty first century and one large ruling family oversaw most of Europe. Banks worked together at an International level to keep the collective end-results equal. Our economy had been stimulated through a mixture of monetary and fiscal policy and it had gone through a number of boom and recession periods and, with it, technological and scientific revolutions.
WW2 saw us hand our power, knowledge, status and savings to the US, swapped for huge loans to pay for the war and to return life to normal where possible. The post-war boom saw spending and employment reach highs which reflected well in the economy with standards of living and rising incomes the period between 1946-69 saw stability, while instability was fresh in everyone’s minds,
The amount of work available and being undertaken was high and as a result of the mobilised female work forces, returning soldiers and immigration trade unions grew in numbers and in power (with union leaders now being immune from personal prosecution), looking after their interests with new friends in very high places in both the Conservative, Labour and Liberal parties, who equally flirted and courted their support seeking votes; the welfare state was born. The post-war boom continued to provide radical growth yet disagreements arose as the large numbers of unions fought to get ‘equal rights’ (pay) with other unions, collective bargaining, mergers, secret ballots were commonplace resulting in power struggles and strikes starting as the war boom was coming to an end.
Union leaders undoubtedly delivered great advances for employee rights (welfare state), albeit pushing a little too hard and being perhaps too keen to strike. The Conservative government of 1979 onwards made significant efforts to reduce the power of the trade unions and avoid a repeat of the crippling effects of their industrial action.
The ensuing wave of privatisations throughout our economy and legislation would wrestle much of their power and influence away. Wage demands were left to market forces and an individual’s desire to compromise and agree directly with their employer. Unions were to become more heavily regulated by law and required to agree to a new ‘moderate’ set of behaviours to avoid crippling the economy and country again (Flexible Labour Market & Flexible Working).
As a result of the weakening of the trade unions and mobilising (de-skilling) of our workers, de- regulation, North Sea Oil, privatisation, built in obsolescence, our declining industrial and manufacturing base, declining marriage rates, The Children’s Act, Health and Safety Legislation, little competitive sport at schools, wildly different exam boards, a belief that having a class of school students achieve C’s is better than a mix of A-D’s and a shifting of responsibility of parenting from parents to teachers; we have dispossessed generations of people of Knowledge and Experience which affects their decisions and actions and it adds to the disconnect between education and commerce.
Compounding this is a reduction in spending on our infrastructure, social activities and provisions along with communities and the policing within those communities which has caused an increase in the social disorder, crime and murder rate. Privatising our manufacturing and industrial base, along with the land they sit on has created a divide between the ‘haves and have not’. Investment and expenditure in domestic and foreign policy and war in conjunction with an outflow of knowledge and largescale selling of state assets has had a negative effect on our people, their working habits and our economy.
The Flexible Labour Market (FLM)
The Flexible Labour Market (also known as Flexible Working) describes a theory in which the workforce is able to move between employment and roles to reduce unemployment and take up new employment positions to enable growth. There are arguments for and against the theory and there are very real and clear characteristics and consequences that you must understand and work with in the pursuit of your (business) goals.
By being able to increase and decrease the amount of labour utilised within an Organisation easily it can react to the current pressures they face and can control the cost base of their (often largest) asset. This flexibility is thought to open the door to longevity, increased trade, increased investment, lower unemployment and stabilised economic cycles.
However, hiring lower paid employees to perform your business functions is an inefficient ideology, reduced training because of short term contracts is argued will result in lower productivity resulting from less employee investment; zero hour and short-term contracts do increase job insecurity and stress with non-unionised workers receiving smaller pay rises and increasing inequalities between workers. It is calculated that there will be higher replacement costs of labour due to increased employee turnover.
The ‘Flexible Labour Market’ was an intentional step to making employment law favour the employer although the elevator pitch, I imagine, probably focused more on keeping unemployment low by giving our workforce transferable skills so they can always find work somewhere. We were being moulded into a “Jack of all trades and master of none”
Observations made of the FLM
Employees have been upskilled with ‘transferable skills’ but life-long careers have declined and deep learned knowledge from experience has become less valued. Unfortunately, this change has run alongside technological change and rapid advancement and massive levels of wealth for the shareholders of businesses which has obscured the relative decrease in the real wages and skills of the bulk of UK workers.
Whilst unemployment is low, the ease with which an employee can move between jobs, trades or careers has lasting effects on the quality of the work that is being done in an area because when a person moves their knowledge moves as well. Do you know of any businesses who try and retain the knowledge of the outgoing employee? Yes, transferable skills are just that and they mobilise the workforce but the depth of knowledge that was enjoyed when parents and workers passed their skills and knowledge to their siblings or apprentices has gone and with it our potential learning has been reduced.
Our children, students, graduates and otherwise up to and including employees learn what they know from first-hand experience. Whilst they may know the area they work in; the depth of knowledge is less because there are fewer generations having accrued a depth of knowledge.
The Office of National Statistics data suggests that productivity in the UK is low, and has been decreasing due to:
Low capital investment from uncertainty
Cheap labour negating the need for capital investment
Creaking infrastructure hindering employees and businesses
Slow, No, and Weak Political decisions stifling certainty and confidence
Low home-grown skills in engineering, software, data analysis
Operating within comfort zones and risk aversion
Little innovation or Research and Development
Disengaged employees – UK ranks 18/20 of the leading economies (37% employees felt encouraged, < 50% felt valued at work)
Poor Management and Leadership
Tolerating mediocrity and obsolescence
Question & Excercise:
How have these FLM factors and consequences, good and bad, reflected and or impacted your operation, culture and your business performances?
Elephant In The Room:
Residents of the UK can lay claim to being amongst the most obese, the heaviest binge drinkers, the most dedicated recreational drug takers , the most in debt, the most likely to be pregnant teenagers and amongst the most unlikely to be married adults in Europe.
1 in 4 children grow up without a male role model in the family home and rarely have one till>12 years at secondary school.
Studies show a strong correlation between single parent families and mental health and well- being diagnosis. Surveys reveal 1 in 6 employees will complain of a mental health and well-being issue each week.
A view held suggests:
The disconnect between education and commerce causes a skills mis-match and resource mis- allocation. Generational trends and socio-economic changes have left our labour market with an imbalance such that the National Citizen Service and International Citizen Service should be extended and elevated from a voluntary status to a compulsory course for all young people to learn life skills in many areas of business and community activity to act as a lead into adulthood prior to moving to college, University Apprenticeships or the Labour Market.
Were the UK government (who own the accreditation and business analysis framework, Investors In People), to require all businesses to take their 40-question survey anonymously, for free, (restricting confidential company data to each company only), we could see exactly what our staff thought across the country and in every sector, and then be in a position to help them all, rather than only help those improve who can afford to pay for the knowledge.
If there were an Act of Parliament which ensured all businesses had an HR Profit Centre focusing on Productivity we could manage ourselves, our revenues and our economy to a positive position.