Radical or Bureaucratic? Why Labour’s HR proposals may be both

With the current political turmoil in the UK, and the possibility that we may see a change in Government in the near future, this post looks briefly at the HR and employment related announcements made this month by the opposition and consider their effects on the profession. I should stress that I’m not looking at this from a political view – HR professionals (and businesses more widely) have a responsibility to ensure our organisations work within the law, whatever our personal views of a particular piece of legislation.

Five key announcements have been made by Labour’s John McDonnell in recent weeks, in a series of speeches.

1.       Ban ‘zero hours contracts’. I’ve written before that this probably wouldn’t solve the underlying problem – since employers would either go down the route of full casualisation, or offer ‘1 hour per week with the option to do more’ contracts. But from an HR perspective, other than the admin time caused by changing existing contractual arrangements, it might cause businesses to rethink their reason why they use these types of contracts.

2.       Raise the minimum wage to £10 per hour. Not really an issue from an HR perspective, as the current Government have previously said they want to raise the level to £9 per hour, this is more a political argument as to what level the minimum wage should be.

3.       Sectoral Collective Bargaining. Collective agreements still exist on an industry wide basis – not just in the public sector – in some sectors. (I still need to dig out my ‘pink book’ – below – occasionally). But given that union membership is at a low level, doesn’t exist in certain sectors and employers aren’t currently obliged to participate in sectoral bargaining even if they do recognise unions, this seems to be more of a long-term aim than a change that will have an immediate impact on the way companies interact with their staff.

4.       Right to paid leave for victims of domestic abuse. I don’t think anyone would disagree with the principle behind this (and we will shortly have to implement paid leave for child bereavement, so it’s not really an extra administrative task). But I can see a whole host of practical difficulties. Will individuals have to pre-declare to their employer that they are in an abusive relationship? At what point will the right kick in (physical abuse? Mental cruelty?)? What evidence will be needed? This isn’t to make light of a very serious issue, but it is a subject that requires sensitive handling from HR and simply setting it up a ‘procedure’ doesn’t seem to be the way forward. (I haven’t seen a policy document, simply the announcement, so if there is more detail on how this would work I’m happy to link to it).

5.       Compulsory Share Ownership for Employees. This issue attracted the most media attention, primarily because employers with over 250 staff would be ‘forced’ to give employees a percentage of shares (up to 10% over a period of time), allowing them to earn dividends on top of their wages. Employee shareholding is not a new concept, there are many companies that operate schemes that allow some or all employees to be given shares in the organisation. Nor are ‘compulsory’ schemes anything unusual – companies are already required to enrol employees in a pension scheme and to make financial contributions to it, while a chunk of profits is already taken from larger companies in the form of the apprenticeship levy. In one sense the idea is simply a different approach to that taken by the Cameron government, but with the same aim – to allow workers a greater stake in their employer. From an HR perspective –  having spent several years working in an employee owned business – the major immediate challenges will be for learning and development professionals who will need to devise training on the different roles and responsibilities of an employee and a shareholder, and responding to the argument “you can’t sack me, I’m a shareholder” in disciplinary hearings.

And while we shouldn’t undersestimate the possible cultural effects of these proposals, the devil will be in the detail for most of them. Will they go the way of the ill-fated “Statutory Dismissal and Grievance Procedures” introduced – and quickly abolished – in the early 2000s? Or will they become just part of the regulatory environment for HR, like maternity leave or compulsory redundancy consultation? Only time (and the result of the next general election) will tell.

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The 15 things that HR should do (but doesn’t always)

Working as I do with small organisations, I’ll often read an article about some great new HR initiative or theory and wonder why we make things so complex. It seems to me that we frequently get so caught up in the processes, jargon and big picture stuff that we neglect what we are really all about. Employment is a relationship and we need to be clear about what it is that we are committing to, as our side of the ‘deal’. After giving it some thought, I’ve distilled it down to 15 points that define what HR should be doing to create a successful relationship (and where there is no HR, what senior managers should make sure they have in place) 

1.       We’ll pay you correctly, on time, and at a rate that is ‘felt fair’ by both sides.

2.       We’ll make sure that you have a safe place to work, with the right equipment and any required protective clothing

3.       We’ll make sure we comply with the law around employment

4.       If you apply for a job with us, we’ll make sure the process is clear and easy to follow, and keep you informed about your application.

5.       If you need training or other support during work, we’ll make sure that it is organised for you in a timely way.

6.       We’ll keep you informed about what’s going on in the organisation and how it affects you, and we’ll listen to your views

7.       If you do something that’s not right, we’ll make you aware of what it is and why – and do what we can to make sure it doesn’t happen again.

8.       If you think we’ve done something wrong, we want you tell us (and feel comfortable about doing so)

9.       If we do get something wrong, we’ll make sure it is put right (for the future, if we can’t correct it now).

10.   We recognise that there may be times when what individuals or groups of employees want may not be the same as what the organisation wants. We’ll always discuss the best way forward and try to reach a consensus if we can

11.   We won’t tolerate a culture where individuals are abused, belittled, harassed or insulted – whoever this is by.

12.   If we need to end your employment, we’ll make sure this is done with respect, professionalism and understanding.

13.   We can’t promise that every day you work here will be enjoyable. But we’ll try to make sure that the unpleasant ones are the exception, not the rule

14.   We understand that you may have things going on in your life outside work.  We’ll do our best to support you and, if we can, accommodate them.

15.   Above all, we recognise that you are a person too.

I’m conscious that I might be accused of coming up with a ‘best practice’ list – anathema to many modern-day HR practitioners. But I prefer to see it as a core set of principles – which can be adapted to virtually any business size, structure or sector. One thing’s for sure – could you say your organisation is doing all 15 currently?

Burying our head in the sand

There’s been a lot of reaction to the concept of ‘best practice’ in HR over the last few years –  the idea being rejected primarily because no-one can identify what these best practices are, nor is there much (if any) evidence that they work. As a result, the alternative ‘best fit’ model has gained in popularity.

Superficially, best fit has much to commend it. Our HR practices are adapted to the size, sector and most importantly the strategy of our organisation. The approach that might be taken in a large corporate services business is not the same as an SME in a manufacturing sector. But we need to take care.

One of the most well-known best-fit theories  (Schuler and Jackson 1987) suggests that when a business is cost-sensitive, HR’s approach should be to control and reduce costs. This means not just keeping wages at the lowest level to attract qualified staff, but also using very tightly defined job roles (so there is no scope for ambiguity or employee discretion), using ‘precarious’ labour (what we now tend to refer to as the gig economy), little or no training and development, and short-term performance goals. Ryanair is often cited as the ‘classic’ example of this approach in the UK.

The dangers of this approach should be obvious – and if they aren’t then yesterday’s article in the Financial Times, which exposed the working practices in the garment industry in Leicester should be top of your reading list. Taken to its extreme, it leads to unsafe working conditions, below minimum wage levels and exploitation on a large scale.

“But what can we do?” I can hear many HR professionals saying. After all these businesses won’t have HR.  But our ‘just legal but arguably unethical’ HR practices do lead to other companies taking the next step across that line. And with little current enforcement of regulations it’s all too easy to get away with ignoring basic employment law.

It is, as Canadian HR writer Jane Watson describes it, a “Wicked Problem” – and demands the same approach she suggests to tackling it. HR can’t solve the issue on its own, but neither can we pretend that we are not partly responsible for this state of affairs.

There but for the Gracie of God…

 

About 6 months ago, I wrote this post about BBC pay and the gender pay gap. Rather naively, I stated in that post “I can’t believe a major national organisation with extensive HR and legal resources would expose itself to such a reputational and financial risk” by breaching equal pay legislation. It appears I was wrong.

As has been widely reported, the BBC’s China Editor, Carrie Gracie, resigned at the weekend, citing the corporation’s failure to pay her at the same level as male colleagues doing the same job in different parts of the world. Reading her public post explaining her reasons for resignation, it appears that she does have the potential for a successful claim.

Equal Pay is either pretty straightforward – men and women doing the same job must be paid the same* – or complex – men and women doing jobs of equivalent value must be paid the same (this is complex because working out the “equivalent value” can be difficult and time-consuming to establish).

Ms Gracie’s case however seems to fall into the former category. As I understand it, there are a group of 4 senior journalists within the BBC who undertake editor roles for distinct regions of the world (Europe, North America, China, Middle East).  So essentially there are 4 people who are doing the ‘same’ job – two of whom are men and two women.

Can the BBC justify a salary difference? It could, if it was able to show that the difference was due to

a)       Work Performance

b)      Geography

c)       Market forces

d)      Special duties or responsibilities

e)      Greater skill and experience

Obviously, I can’t comment in any detail on most of those areas. But given the individuals in the 4 editor roles are long serving experienced BBC journalists, it would seem that reasons a), c) and e) are unlikely.  Reason d) would seem to apply equally to all 4 – all of them undertake other BBC jobs (presenting on TV or radio etc), which leaves us with simply geography as the reason.

On that basis, I could probably argue a case that the Middle East editor should be paid higher (due to the need to visit war zones/higher degree of personal risk etc) and it might be justifiable to pay slightly differently if the cost of living were significantly different between countries/regions.  But otherwise I’m struggling to see how the BBC will justify a difference in salary.

We’ll see how Ms Gracie’s claim does over time. But the message for my clients and other readers is that you should be paying men and women the same* for doing the same job and differences can only be justified for one of the reasons highlighted. A claim may not be as publicly damaging to your organisation but it has the potential to be very expensive.

(*To be clear, the same can mean within the same pay scale/band, not necessarily an identical salary)

 

 

7 hacks to disrupt HR

Everywhere you look, people want to disrupt HR. Books have been written, conferences held, hashtags created. Many in the HR profession look at the way that Uber, Airbnb, Ryanair and others have disrupted their industry and wonder how we can do the same.  Now I can exclusively reveal that the seven hacks below will ensure that you can disrupt HR whatever your business or sector.

1.       Remove all pencils from the HR office (or in a tech company, hide all the iPad chargers). All HR work will soon grind to a halt.

2.       Respond with “Yes, let’s be just like Enron” whenever the phrase “war for talent” is mentioned. Most HR people won’t actually have read the book to be aware that Enron was one of the key case studies.

3.       If anyone in HR refers to the above concept as the “war on talent”, smile pityingly at them. This will disconcert if not completely disrupt.

4.       Replace all ergonomically designed office chairs with three legged stools. Defend any subsequent health and safety claims with “we were only implementing the Ulrich model

5.       Suggest ignoring employment law if it doesn’t fit in with the preferred solution to a problem (I saw this genuinely proposed by a qualified HR person on a LinkedIn discussion topic, so this disruptive tactic has clearly gone mainstream).

6.       Ask “have you any evidence this will work?” next time they propose a new initiative.  Repeatedly doing this will either a) make them leave you alone or b) find some evidence to support their argument.

7.       For maximum effect, switch on the sprinkler system during the CIPD conference this week. This will disrupt more HR people in one fell swoop than points 1-6 put together.

I completely understand that many in the HR world think things we do could be done differently and better, or even not done at all (I am one of them). And perhaps I’m being too literal by taking the dictionary definition of ‘disrupt’. But the word conveys the snotty-nosed punk rock attitude of ‘let’s smash everything whether it’s good or not’ (fine if you’re 17 and in a band, perhaps not so in a world of work). Moreover, with the disruptive chickens coming home to roost for many of the companies above, should this be a bandwagon that we just watch as it goes hurtling by?