Can adversity build workplace engagement?

Jun 23 2009 by Nic Paton Print This Article

Far from creating "them and us" resentment as jobs are cut and pay is slashed, this recession appears to creating greater workplace engagement as employees and managers pull together – or at least that's what employers are saying.

British Airways chief executive Willie Walsh's call for staff to step up and volunteer to work for a month without pay to help the company through the recession was roundly criticised last week as a PR gimmick that was much more easy for him to say or do on his multi-million pound salary than for his lowly paid front-line workers.

Nevertheless, the airline said more than 1,000 of its 40,000 employees had already signed up and there is evidence, the employer's body the Confederation of British Industry has now said, that the recession is creating more engagement and bringing employers and managers closer together.

Many observers and unions remain sceptical that this sort of "pulling together" is often more the result of mutual fear of redundancy or being "black-listed" as a trouble-maker than any sense of positive engagement or ownership.

The Institute of Employment Rights, for one, criticised the BA move, arguing that low-paid workers should not be expected, or pressured, to put in time for free.

But it is clear many employers, business owners and employees do increasingly feel they are fighting a common fight, the CBI has argued.

Employers and staff are now working together more to protect businesses and, just as importantly, their jobs by being prepared to be more flexible in how and when they work and accepting pay and recruitment freezes, it suggested.

The survey of more than 700 employers by the CBI and recruitment firm Harvey Nash showed almost two thirds had already made or were considering making significant changes to the way they organised their workforce and working patterns.

More than half were going to freeze pay during the next pay round, yet intriguingly nearly four out of 10 who expected to make a modest increase.

Many employers were standing by their staff training, and two thirds wanted to target training more efficiently.

In cases where jobs could not be saved, individual redundancy payments have averaged around £12,000, the survey found.

Nearly two thirds of those employers polled had frozen recruitment either across the whole organisation or in parts of it.

And more than half did not expect recruitment to return to 2007 levels for at least another couple of years.

Graduates and school-leavers were facing some of the toughest time, with two fifths of the employers saying they had frozen graduate recruitment and a further tenth conceding that they were recruiting fewer graduates than last year.

But there was also evidence firms were trying to bring in options other than just take an axe to their headcount.

Nearly half had increased flexible working among staff to reduce hours as well to meet employee requests for more work-life balance, with a further quarter considering or intending to make increases. A third had cut their use of agency staff, while four out of 10 had reduced paid overtime.

A quarter of organisations planned to transfer work overseas in response to the UK's downturn, with firms in science, hi-tech and IT sectors most likely to do so.

Nevertheless, more than six out of 10 of the companies polled said they had kept their existing bonus structure although, in the wake of the credit crunch, nearly half of firms in the banking, finance and insurance sector had reformed their schemes.

The vast majority – nine out of ten – said they had made no changes to their redundancy package because of the recession.

The average redundancy payment was just over £12,100, though this varied greatly among sectors, from £21,300 the norm in banking, finance and insurance, against £5,700 in construction.

The larger the firm, generally the better the pay-out. Redundancy pay was £23,700 in firms with more than 5,000 staff, compared with £5,200 in the smallest organisations.

Nearly half of firms were not changing their spend on staff training and in fact nearly a tenth was increasing it, despite four out of 10 cutting training budgets to save money.

More than half of firms said they were maintaining their apprenticeship programmes, with a tenth even expanding them.

John Cridland, CBI deputy director-general, said: "This has been a particularly bruising recession, but one of its most positive and striking aspects has been the commitment of many businesses and their staff to work together to try to trim costs and save jobs.

"The UK's flexible labour market has proved a huge asset during these testing times, and flexible working changes have enabled employers and staff to create leeway on working hours," he added.

"While pay and recruitment freezes should disappear as the economy recovers, the spirit of flexibility and the willingness of many staff to engage positively with employers on these issues will hopefully be a more permanent benefit of the UK economy," he added.

BA's Walsh has described the airline, which has reported record losses of £401m, as being in a "fight for survival", but it is by no means the only employer to be promoting the idea of working for free to create a greater good.

In the U.S in particular, laid off workers, postgraduates and career professionals are increasingly choosing to work for free, according to the website The Big Money.

It has argued that we are increasingly seeing the rise of an "intern nation" with postgraduates paying $9,000 to work for work, where people become "serial interns" in the hope of one day securing a (low wage) permanent job and where interns are being used to replace workers who go off on maternity leave or even whole workforces of laid-off workers.

Even Google – which can hardly said to be short of cash – has run into a furore over its new Chrome browser.

It has reportedly asked some high-profile designers and illustrators to supply personalised "skins", or downloadable design schemes, for the brower, but for free – something that has led to a storm of protest.

Longer term, the recession could lead to fundamental changes in the way employers recruit, motivate and develop employees, argued Harvey Nash chief executive Albert Ellis.

"Without a more proactive approach to training, accommodating and retaining talent, businesses risk missing out on the next generation of skills needed to compete," he said.

But employee engagement is something that has to be cultivated over years, he added. "We have a wealth of knowledge, experience and skills in the UK that must be nurtured and developed, even in troubled times, for the future of the British economy."