Can Good Work Solve the Productivity Puzzle? Collected essays b Can Good Work Solve the Productivity Puzzle?
Fulfilling Work Policy
Quality of Work 2020 and Productivity
Edited by Gail Irvine, Carnegie UK Trust
Carnegie UK Trust The Carnegie UK Trust works to improve the lives of people throughout the UK and Ireland, by changing minds through influencing policy, and by changing lives through innovative practice and partnership work. The Carnegie UK Trust was established by Scots–American philanthropist Andrew Carnegie in 1913.
RSA Future Work Centre The RSA Future Work Centre aims to prepare today’s workforce for tomorrow’s workplace. The centre explores how radical technologies could alter the world of work – both in terms of availability of jobs and their quantity and quality. Using a combination of scenario planning exercises, hands-on sector labs and research into policy and practice reform, our ambition is to equip policymakers, employers and educators with the insights they need to help workers capitalise on the opportunities of technology while mitigating its risks.
Acknowledgements The Carnegie UK Trust would like to express gratitude to all the contributors who have written for this collection. Particular thanks are due to the members of the Expert Group on Quality of Work and Productivity which has worked with Carnegie UK Trust and the RSA over the last eight months of this project providing invaluable insights and support, and to the energy and leadership of the Group’s Chair, Matthew Taylor. Finally, thank you to Andy Haldane for his interest and encouragement of the themes we have explored in this work.
Gail Irvine, Senior Policy and Development Officer at Carnegie UK Trust was the lead editor for the collection, with oversight provided by Douglas White, Head of Advocacy.
Disclaimer These essays do not represent the collective view of the Carnegie UK Trust or the RSA, but only of the respective authors.
The text of this work is licensed under the Creative Commons Attribution- ShareAlike 3.0 Unported License. To view a copy of this license visit, http://creativecommons.org/licenses by-sa/3.0/ or send a letter to Creative Commons, 444 Castro Street, Suite 900, This report is printed on Mountain View, California, 94041, USA. paper that is FSC certified. Can Good Work Solve the Productivity Puzzle? c
Contents
Foreword by Andy Haldane, Chief Economist at Bank of England and Chair of the Industrial Strategy Council 1
1. Overview. By Matthew Taylor, RSA 4
2. Does good work have a positive effect on productivity? Developing the evidence base. By Derek Bosworth and Chris Warhurst, Warwick Institute for Employment Research 10
3. From trade-offs to win-wins: how we can unlock productivity and good jobs. By Tera Allas CBE, McKinsey & Co 20
4. What do we know about digitalisation, productivity and changing work? By Mary O’Mahony, King’s College London 28
5. Technology, productivity and good work: views from the ground. By Fabian Wallace-Stephens and Sarah Darrall, RSA 33
6. Can gig work be good work? By Gill Dix, Acas 41
7. Enabling fair work, productivity and inclusive growth: lessons from Scotland. By Patricia Findlay, the Fair Work Convention and the University of Strathclyde 45
8. Fair work, low pay and productivity in Wales. By Alan Felstead, Cardiff University 51
9. The challenge is urgent but not new: good work, productivity and lessons from Tavistock. By Zayn Meghji, RSA 56
10. Is it time to turn the future of work on its head? By Josh Hardie, CBI 61
11. Productivity through people – supporting best practice in SMEs. By Tony Danker, Be the Business 67 12. Dead-end relationship? Exploring the link between productivity and workers’ living standards. By Matt Whittaker, Resolution Foundation 72
13. Can improving productivity help our in-work poverty problem? By Louise Woodruff, Joseph Rowntree Foundation 77
14. Can prioritising worker health help close the North’s productivity gap? By Anna Round, Institute for Public Policy Research North 82
15. What we know – and what we don’t – about flexible working and productivity. By Emma Stewart, Timewise 86
16. Finding our edge: engaging employers in the movement to make work better. By Paul Devoy, Investors in People 91
17. Unlocking potential: ways of tapping into employees’ ideas to enhance productivity. By Alan Felstead, Cardiff University; Duncan Gallie, University of Oxford; and Francis Green and Golo Henseke, University College London 96
18. How can we ensure more workers drive and benefit from productivity gains? By Kate Bell, Trades Union Congress 101
19. Afterword. By Sarah Davidson, CEO, Carnegie UK Trust 106
About the Authors 109
Endnotes 120 Foreword 1
Foreword by Andy Haldane, Chief Economist at Bank of England and Chair of the Industrial Strategy Council
The UK’s “productivity crisis” – the flat- the key to higher levels of productivity. lining of economy-wide productivity The recent experience of the UK, and since the global financial crisis – is the a number of other countries who have single most pressing issue facing the introduced minimum wage legislation, UK economy. The cost of this crisis are suggests this theory has support in real- already multiples of even the worst- world experience. case Brexit scenario. Understanding the roots of this productivity problem, Far-less explored, until relatively and replanting them in more fertile soil, recently, has been the link between is the signature challenge facing UK productivity and the other (than pay) economic policymakers today. aspects of work, in particular measures of work quality. Structural changes When it comes to the link between in the world of work, including the productivity and one key aspect of rise of the “gig” economy, have given work – pay – this relationship has been greater recent prominence to this issue. extensively studied. The two are strongly This culminated in Matthew Taylor’s positively correlated. In part, that excellent review of Good Work published reflects a causative chain running from in 2017 and earlier foundational low productivity through to low pay: at research by the Carnegie Trust and the a level of a company, it is productivity RSA developing metrics of work quality. gains that, over time, “pay” for real pay rises. It should come as no surprise, This volume brings together a collection then, that the “lost decade” for UK of insightful essays exploring, in greater productivity has coincided with a lost depth than perhaps ever previously, decade for real pay too. the relationship between productivity and work quality. As with pay, this But the link between pay and relationship is a two-way street. More productivity also runs in the reverse productive, higher-performing firms are direction: a higher rate of pay can spur more likely to invest in enhanced worker worker satisfaction and motivation, thus security, opportunity, training and leading to higher levels of productivity. engagement. In that sense, productivity This is called “efficiency wage” theory. “pays” for rises in work quality. It suggests higher pay can itself hold 2 Can Good Work Solve the Productivity Puzzle?
But it also seems plausible that causality First, while the correlation between most runs in the reverse direction: higher metrics of job quality and productivity quality work, like higher pay, can serve as is strong and positive, it appears to be a spur to greater work satisfaction and strongest at the lower end of the work motivation, thus leading to higher levels quality distribution. In other words, the of workplace productivity. You might greatest benefits to productivity may call this the “efficiency work” hypothesis. come from increasing the quality of The public policy implications of work among the “long tail” of companies this hypothesis are potentially very currently with the poorest offering. significant. For example, it suggests Indeed, this evidence suggests some there are natural limits to the benefits of of the lengthening of the UK’s long a “flexible” labour market in boosting an productivity tail over the past decade economy’s efficiency. could be explained by the lengthening tail of low quality work. This is a concrete This volume provides a comprehensive example of a cost of the wrong type of assessment of the efficiency work job market flexibility. hypothesis, drawing on a rich and diverse array of evidence and experience Second, the key to using and diffusing and an impressive list of contributors. technology is known not to lie in Let me draw out a few of the key technology itself, but in the people using themes. Interestingly, these chime – it. One of the reasons technological and help make sense – of some long- advances may not have shown up in standing structural features of the UK higher levels of productivity is because economy, including the “long tail” of UK workers have lacked the training low productivity companies and their and encouragement to make best use slow rates of technological diffusion and of this technology. That might explain weak management skills. the causative link from work quality to Foreword 3 productivity. And it might also explain Good work is already reshaping the why rates of technological diffusion contours of the public policy debate on have been falling across the UK. productivity. For example, the Industrial Strategy Council (ISC) is using measures Third, one of the roles of management of work quality as one of its “success is to provide the security, opportunity, metrics” when judging the progress of training and engagement to enable the Government’s efforts to tackle the workers to progress in pay and productivity crisis. productivity terms. Perhaps it should come as no surprise, then, that the More needs to be done. Words like UK’s long tail of poorly-performing “productivity crisis” and “industrial companies and poorly-paid workers has strategy” leave most people dazed and as its counterpart a long tail of poorly- confused. When I am asked what these skilled managers. Managers’ batteries, words mean for the average person like those of workers, need to be fully I say “good work at a good wage, charged if the full fruits of technology everywhere”. This works much better as for productivity are to be harvested. a description of what is at stake and the prize on offer. As the essays here make The evidence here is not the last word only too clear, “working better” should on good work and productivity. Indeed, be our watchword, for therein lies the I hope this volume can serve as the key to understanding and solving the springboard for further research on this UK’s productivity crisis. important topic and for policy action. 4 Can Good Work Solve the Productivity Puzzle?
1. Overview By Matthew Taylor, RSA Overview 5
Work quality and productivity are both The team at the Carnegie UK Trust are issues that have moved fast up the to be commended for drawing together agenda in recent years. My review of such an impressive list of contributors modern employment, commissioned with so many interesting things to say. by the then Prime Minister Theresa There is no question that this collection May and published in 2017, was called can help move the debate forward. Good Work1. Since then there has Although I would strongly encourage been a welcome increase in research, anyone interested in this topic to read commentary, advocacy and the sharing all the essays, in this introduction I will of good practice around the theme of explore some of the key themes. work quality. This includes an earlier Carnegie UK Trust–RSA collaboration, The first big question is, of course, are which produced the report Measuring good work and productivity linked? Good Work.2 This explored good The answer it appears is ‘yes’ but with work metrics and sought to enable some unknowns and qualifications. the government to deliver on its only The new analysis undertaken by Chris partially fulfilled commitment to Warhurst and Derek Bosworth reveals measure and be accountable for work a correlation but one that is not uniform quality across the UK economy. across the seven dimensions of good work identified in the aforementioned The May Government identified better Carnegie UK Trust–RSA report. The jobs as an element of its industrial implication is that some interventions, strategy and, as a member of the focusing on different dimensions of Industrial Strategy Council (ISC), I have good work, may deliver more substantial been keen to emphasise this link. For the productivity gains than others. It also ISC the UK’s pronounced productivity appears that the correlation is overall problem is clearly a major concern. much stronger at the bottom end of Our performance lags most of our the labour market (intriguingly at the competitors and we have seen only a highest end the relationship reverses, minimal increase in productivity in the suggesting that trying to make work 12 years since the global financial crisis. ‘perfect’ could distract from overall Whether our goal is simply a higher organisational performance). This gross domestic product (GDP) per head reinforces a view that the focus for both for the contribution this can bring to good work and productivity initiatives living standards, or a wider objective of should be on lifting more poor-quality inclusive and sustainable growth, our work closer, at the very least, to the long-term prospects rest on increasing average level. Thus, the economic the underlying growth path of imperative of high productivity aligns productivity. The rationale for exploring powerfully with the social justice goal of the relationship between work quality making work better for those who are and productivity is self-evident. currently least well served by the labour market. 6 Can Good Work Solve the Productivity Puzzle?
Chris and Derek’s analysis is primarily exacerbated by the unfolding fourth quantitative, and so it is useful to be industrial revolution. Mary O’Mahony able to read their research alongside from King’s College London makes more qualitative analysis. As the RSA’s a similar point about the multi- Fabian Wallace-Stephens and Sarah faceted impacts of digitalisation in Darrall discovered, the introduction the workplace. In a similar vein, the of new technologies in the workplace Confederation of British Industry’s (CBI) could be conducive both to good work Josh Hardie argues there is no question and productivity, but when technology that the way technology might change malfunctions, new dependencies and people’s jobs needs to be considered productivity challenges are created. and planned for, but worrying about The engagement of employees and line robots threatening the future of good managers as technology is implemented work risks looking through the telescope is important to getting job design right from the wrong end. Josh argues that and to maximising the benefits for work adopting productivity-enhancing quality and efficiency. technology is dependent on having good work conditions in place. If In a fast-changing world people often businesses do not engage their people fail to learn the lessons of the past and properly, technology often fails to be it is intriguing to read Zayn Meghji’s used to its full potential. Josh explores (also of the RSA) account describing some of the ways in which employers an earlier debate about good work sometimes fail to grasp the nettle in and productivity. The socio-technical good work, technology and productivity, perspective that emerged in the post- and highlights steps to make more of WWII decades from the Tavistock this virtuous link. Institute was innovative, radical and in many ways world leading. Yet for What comes clearly through the essays a number of reasons – including the is that pressures in different sectors and conflicting interests of managers and those related to business size need to be worker representatives – it failed to addressed if we are to support business deliver on its early promise. There are practices that prioritise good work and lessons here for all of us trying to link productivity. Provided these different better work to organisational success. pressures are understood and engaged with, this is not a barrier to progress: If the existing case for seeing good businesses do not need to have leading- work as a path to productivity is strong, edge practice to design jobs that deliver various factors may come to make it good work and reap productivity gains. stronger still. Applying the extensive Tony Danker’s contribution showcases research insights of McKinsey, Tera how Be the Business supports practical Allas shows that without a commitment interventions in small and medium-sized to better work many of today’s labour enterprises (SMEs) to improve their market inequalities are likely to be productivity through making the most Overview 7 of their people, and he provides concrete argues that strengthening worker examples of those who have risen to voice and collective action is vital if gig the challenge. Investors in People is a work is to be good work. Technology is longer established initiative focusing facilitating more flexible forms of work on employee engagement and its links and it is important that this flexibility is to organisational performance. The ‘two-way’: offering benefits to workers Investors in People process has had a as well as employers. As Emma Stewart significant and benign impact in many from Timewise points out, once we have organisations but, as its CEO Paul more models of flexible working in place, Devoy argues in his essay, if we want to across a wider range of different sectors get the message through more widely, and role types, we will be in a far better we would do well to learn from the position to understand the link between public health movement in developing flexible working and productivity. strong, simple messages. It is encouraging to see much common The research of Alan Felstead ground between those advising and colleagues working on the employers and those advocating for Employment and Skills Survey workers. Kate Bell from the Trades provides strong evidence for the links Union Congress (TUC) argues that the between employee engagement and implementation of the coming wave of innovation at work. This good news is technological change should remedy tempered by findings that suggest levels the failure of previous technological of engagement which could encourage shifts to put workers first. The inequality, employee voice and innovation have social discontent and political upheaval fallen in recent years. It is to be hoped that many western countries now face that the very substantial lowering of at least in part reflects the failure to the threshold for workers to have rights manage past industrial transitions. to representation, information and Louise Woodruff from the Joseph consultation – being introduced in April Rowntree Foundation (JRF) argues 2020 as one of the recommendations of that designing business practice and my 2017 review – will reverse that fall. policy solutions to addressing good work and productivity must connect Work is already changing in many ways with the everyday lives and concerns of and it is important for research and people working on low or unpredictable practice to keep up. Gig work tends to incomes. be viewed negatively in the public and policy debate (although some research Inequality is clearly an important suggests gig workers have higher than aspect of the good work picture but it average job satisfaction). Taking up is worth noting the evidence presented one of the strongest themes in this by Matthew Whittaker from the collection, Gill Dix from Acas (Advisory, Resolution Foundation. First, the labour Conciliation and Arbitration Service) share of GDP has fallen much less in 8 Can Good Work Solve the Productivity Puzzle?
the UK than in many other developed set up by the Welsh First Minister is a economies while, second, recent rises in concerted response to the combined the value of minimum wage have meant problems of poor productivity, low skills that those at the bottom of the wage and poor pay in the Welsh economy. distribution have actually done relatively better in wage growth than the group A number of local authorities, immediately above them. Ultimately, particularly in our major cities and city he cogently argues, it is only by raising regions, have also taken up the mantle productivity that we can improve pay of work quality by creating their own (an important aspect of good work), coalitions and charters to encourage and this requires us, amongst other good practice. As Anna Round from issues, to understand why people have the Institute for Public Policy Research become more resistant to moving (IPPR) North argues, this can enable a to organisations or places offering general commitment to good work to better jobs. This analysis also provides be enhanced by a focus on key local a window into some of the wider priorities, for example in the North East complexities of the good work debate, on tackling poor workplace health as a in that interventions that support means of improving individual wellbeing improvements in one aspect of good and productivity. work, such as pay, may not necessarily lead to, and in some cases may present Overall, I believe this collection of essays challenges to, other aspects, such as confirms the Carnegie UK Trust–RSA progression. hypothesis that putting the concepts of good work and productivity together This collection is intended to influence could be fruitful. The juxtaposition policy and practice across the UK and has been a useful provocation for it is heartening to read the positive several of our authors, but beyond this preface to this collection by Andy I sense a broader complementarity. Haldane, chief economist at the Bank On the ISC we have often reflected on of England and chair of the ISC. Those the limited traction of the concept of of us focused on Westminster and ‘productivity’. Amongst the public it is Whitehall can also learn from and be not well understood and even amongst inspired by the commitment of the those who do recognise the idea there devolved administration of Scotland and is a tendency to see it as one used by Wales. Patricia Findlay of the Scottish managers to justify intensifying work Fair Work Convention and the University or cutting jobs. Yet, without raising of Strathclyde writes eloquently of productivity and investing in the the role the convention has played in means to do so, our national economic bringing together a broad coalition of prospects look bleak. Historically, raising stakeholders committed to good work. productivity has been key to improving Alan Felstead from Cardiff University wages and living standards. In contrast, describes how the Fair Work Commission the concept of ‘good work’ is one that is Overview 9 more intuitively understood and strongly through practice and evidence, good supported across society. Its weakness work to the urgent and practical task may be a sense that it is an aspirational of moving our economy onto higher goal rather than an achievable reality trajectory. Perhaps the most important for everyone, especially for those at contribution of this collection is to start the bottom end of the labour market, to build a strong bridge between the two and there remains much to do if the full concepts. It is important now that we range of levers that help to deliver good continue to strengthen that bridge so work are to be effectively deployed. that the story of economic dynamism can go hand-in-hand with our aspiration By putting these ideas together, for an economy in which, to borrow we can render productivity a more the words I used in my 2017 report to understandable concept, one that government, ‘all work is fair and decent, can support our aspirations for good with realistic scope for development and work and a good society, while linking, fulfilment.’ 10 Can Good Work Solve the Productivity Puzzle?
2. Does good work have a positive effect on productivity? Developing the evidence base By Derek Bosworth and Chris Warhurst, Warwick Institute for Employment Research 2. Does good work have a positive effect on productivity? Developing the evidence base. 11
Introduction Examining the relationship between good work and productivity is not easy, The Taylor Review of Modern Working and for two reasons. First, there is no Practices1 in 2017 argued that good ready-made dataset that can be used work for all should be a national priority. for the UK to analyse the two sets of The review also outlined that most variables together. Second, consistency businesses understand that providing within analyses is hampered by the ‘good work’ is not only a good thing to inconsistencies in defining job quality do in and of itself but that good work and the wide variety of measures for can also deliver business benefits. For productivity. example, that good work might help deliver productivity gains. Analysis by The good news is that the findings Frank Siebern-Thomas using European from our investigation into the link data from 1995–2000 suggests that between good work and productivity are countries with higher job quality have generally positive. We first undertook higher levels of labour productivity and a literature review of the grey and vice versa2. Given that the UK has what academic literature examining seven Bank of England Chief Economist Andy dimensions of ‘good work’ and Haldane calls a ‘productivity problem’ productivity measures. Second, we – with the level of productivity flat- undertook new statistical sectoral lining since the global financial crisis analysis to identify how aspects of good while, post-recovery, key competitor work were affecting the productivity of countries have surged ahead – good workers. Our evidence base, summarised work might offer a new solution to this below, can contribute to helping the problem. Recognising this possibility, the UK Government advance the case set UK Government’s Industrial Strategy out in its Industrial Strategy linking the includes good jobs as one of the pursuit of good work to the delivery of foundations of boosting productivity. productivity gains.
Understanding if good work can deliver on this promise is important. Although many businesses may see a value in providing good work – both as part of their responsibilities as an employer and as a means of motivating better performance from staff – others may not. Gathering and engaging the policy and business community in the evidence base on the productivity impacts of good work is a first step. This essay reports the outcomes of our literature review and sectoral analysis that undertake this task3. 12 Can Good Work Solve the Productivity Puzzle?
Key findings Good work and productivity seem, on the whole, to be positively correlated. A positive correlation was found in four of the five dimensions of good work for which evidence exists in existing literature. Evidence for a fifth is mixed; some research found positive correlations, others not. For the remaining two dimensions there is simply a lack of evidence either way. In our sectoral analysis, with which we were able to examine all seven dimensions, there were positive results for five of the seven dimensions.
With this sectoral analysis of the 17 sub-indictors across the seven dimensions, seven showed higher productivity with the better the quality of work. Only one sub-indicator showed lower productivity and eight showed an inverse-U shape (i.e. productivity is lowest for the two extreme ends of work quality – very good and very bad).
The correlation is stronger for bad work and poor productivity. This should be a major concern and potential point for intervention.
The pattern of correlation is not uniform: the strengths of the correlations vary amongst the seven dimensions. This suggests interventions that focus on different dimensions of good work may deliver more substantial productivity gains than others.
In some cases the existence of ‘decent work’ rather than ‘excellent work’ seems to the optimal point for generating productivity gains.
Below we explain our process and a standard measure of job quality, the findings in more detail. We conclude Measuring Job Quality Working Group by setting out the implications for the (2018) was constituted and tasked policy and business communities. with developing an agreed set of job quality measures4. Drawing on the work of the Chartered Institute of Personnel Measuring good work and Development (CIPD) with its new UK Working Lives Survey, the Working As mentioned, part of the challenge of Group recommends seven broad measuring the impacts of good work on dimensions by which to measure good productivity is that there are differing work. The seven dimensions are terms definitions and metrics used for job of employment; pay and benefits; job quality. Following the UK Government’s design and the nature of work; social acceptance of the Taylor Review’s support and cohesion; health, safety recommendation that the UK needed and psychosocial wellbeing; work-life 2. Does good work have a positive effect on productivity? Developing the evidence base. 13
Table 1: Prevalence of evidence for different aspects of job quality in relation to productivity in existing research. Pay and benefits Strong Health, safety and psychosocial wellbeing Moderate Job design and nature of work Moderate Voice and representation Moderate Work-life balance Weak Terms of employment Missing Social support and cohesion Missing balance; and voice and representation. 450 UK and international articles and Each dimension has sub-indicators. papers were identified, of which around 40 were then selected as indicative for full review. We found that some Measuring productivity dimensions of good work have been more often examined than others. Productivity is an economic measure of the Where evidence has been found, the efficiency with which inputs into production relationship between good work and are converted into outputs of goods and productivity tends to be examined services. Although researchers use a variety through indicators within a dimension, of measures and indicators for productivity, rather than demonstrating a link there is at least an official measure. The UK between the dimension as a whole Government’s Office for National Statistics and productivity (limiting our ability to (ONS) generally uses labour productivity as say with confidence, for example, that its standard measure of productivity – the voice and representation mechanisms level of GDP per person or per person hour improve productivity). of labour input. However, productivity can be hard to capture in some sectors. The Examining the five areas that are most obvious are health care and the public researched in the extant literature, there sector generally, where quantifying output are grounds for optimism. For the four can be difficult. of the five dimensions of good work for which evidence exists – pay and benefits; health, safety and psychosocial Literature review findings wellbeing; job design and the nature of work; and work-life balance – a positive Using the key terms within the good impact on productivity is found. For work dimensions and the official and the fifth dimension, depending on the other measures of productivity, the mechanism of voice and representation first task of our investigation was a within businesses, the existing evidence literature review (see Table 1)5. Around appears mixed but not discouraging. 14 Can Good Work Solve the Productivity Puzzle?
Can we examine job quality productivity (output per person hour) and productivity ‘in the round’? is the variable to be explained; sector employment and capital (e.g. machinery A small number of studies have used and equipment) are the controls8; and multidimensional indexes of job the individual responses to the good work quality to examine its relationship variables are able to influence the sector with productivity and any causality. outcome for workers in that sector. These analyses find that productivity appears to positively impact job quality, The UK’s general poor productivity although the impact of job quality on performance is confirmed by the dataset, productivity is mixed and is dependent although there are considerable differences on the type of sector. It needs to be said, across sectors. In terms of the relationship however, that few studies have tried to between productivity and good work, the establish a causal link, despite emerging descriptive statistics calculate output per opinion that there might be a virtuous person hour for sub-indictors across the circle, with a mutually beneficial, even seven dimensions. The sub-indicators and reinforcing, relationship between good dimensions are set out in Table 2. work and productivity. No analyses to date that we have identified cover all Table 2 summarises the nature of the seven dimensions of good work. relationship between labour productivity and each of the sub-dimensions of good work cross-sector. Of the 17 sub-indicators, New sectoral analysis of the seven showed higher productivity the relationship between good work better the work quality (see the example in and productivity Figure 1a). Only one sub-indicator showed lower productivity and eight showed an Following our literature review, we inverse-U shape (see the example in Figure undertook a sectoral analysis to produce 1b). The poorest good work category had new insights into job quality and the lowest productivity in 11 of the 17 productivity. The dataset we generated sub-indicators. The highest quality work to explore the relationship between had the lowest productivity outcome in good work and productivity performance five cases. However, in the 14 cases where merges sectoral productivity data with it was possible to move from the poorest the good work data from the UK-based quality work up to the second poorest, Skills and Employment Survey6. It enables 13 were associated with an increase in the first examination of the relationship productivity. The combination of a positive between good work and productivity relationship between good work and using all seven dimensions. It is based productivity and, more particularly, the on every worker within a given sector inverse-U shape relationship, implies that having the same level of productivity there is good reason for future policy and but retaining their individual good practice to focus on the poorest quality work responses7. In this way labour work end of the spectrum.
2. Does good work have a positive effect on productivity? Developing the evidence base. 15
good work good
Highest good work good
Lowest
outcome
Poorest
productivity
Other
Inverse U Inverse Falling
Productivity with respect to good work Increasing
Terms ofTerms employment Pay and benefits psycho- and wellbeing social Job design and nature of work support Social cohesion and Voice and representation Work-life balance Health, safety Dimension Sub-indicator Is your job permanent? Chance of losing job in next months 12 Satisfied with pay aspect of your job After I leave work my I keep worrying about job problems I find it difficult to unwind at the end of a work day I feel used up at the end of a work day currentIn my job I have enough opportunity to use knowledge my and skills How much choice do you have over way do your job This organisation really inspires the very best in me My job requires that I help colleagues my to learn new things Importance of working with a team colleagues with cooperating of Importance Whether management arrange meetings where employees can express views Do you think that you personally would have any say in the decision about the change or not? Whether there are unions or staff associations at workplace I often have to work extra time, over and above the formal hours of job my How often come home from work exhausted Table 2 Patterns in the goodTable work sub-indicators 16 Can Good Work Solve the Productivity Puzzle?
Figure 1: Common relationships between productivity and good work. (Note: number of responses shown in the columns.) (1a) In my current job I have enough (1b) My job requires that I help my opportunity to use my knowledge and skills colleagues to learn new things
2000 2000
1500 1500
2,421 2,581 510 150 1,935 2,570 803 204 1000 1000
500 500 Output per person hour Output per person hour
0 0 Strongly Agree Disagree Strongly Strongly Agree Disagree Strongly agree disagree agree disagree
Figure 1 shows two examples from the return to this finding later). The value 17 sub-indicators of good work explored associated with each good work variable in the analysis. These examples show in Table 3 represents the difference the two most important patterns in in productivity between the poorest the data (see Table 2). Overall, the and the best work categories (e.g. very relationship is generally either positive satisfied and very dissatisfied). (good work is associated with higher productivity, Figure 1a) or inverse-U The results suggest that there is 8% shaped (productivity is lower for the two higher productivity in those workers most extreme ends of good work, Figure 1b). satisfied with pay vis-à-vis those least satisfied (there are no sub-dimensions of Using the new database, we also sought to pay). The same outcomes are found for explain productivity using the two control job design and social support, and there is variables – employment and capital stock 14% higher productivity for the best voice – and the seven dimensions of good work and representation than in the poorest. (aggregated from the 17 sub-indicators). Of the sub-indicators, we highlight just Only the effects of the good work variables a few examples. The opportunity to use are shown (see Table 3). knowledge (part of job design and nature of work) and teamwork (part of social Five of the seven dimensions have a support and cohesion) are both strongly positive relationship with productivity. positively related to productivity. In Work-life balance is positive but not addition, both voice and representation statistically significant. However, two are separately positively related to of the dimensions are negative (we productivity. 2. Does good work have a positive effect on productivity? Developing the evidence base. 17
Table 3: Individual level regression with good work indices.
Variables Change in productivity (%) Terms of employment –7 Pay and benefits 8 Health, safety and psychosocial wellbeing –9 Job design and nature of work 8 Social support and cohesion 8 Voice and representation 14 Work-life balance 2
The negative value for terms of is significantly negatively related to employment is caused by the considerably productivity, while the response of greater productivity performance “occasionally”, which seems an acceptable amongst those who think they might job characteristic, is associated with lose their job in the next 12 months the highest productivity outcome and compared with those who do not think significantly higher than the “never” so. This finding is interesting and needs to outcome. be explored further because it is also the case that job insecurity is considered to be We also disaggregated the analysis by nine detrimental for wellbeing. Although the broad sectors (see Table 4). The analysis is short-run effect of job insecurity might be the same as in Table 3, with the exception to produce higher work effort and thereby, of the addition of variables that attempt higher productivity, the long-term effects to identify within-sector effects on may be negative. productivity over and above the all-sector effects shown in the final row of Table 4. In the case of health, safety and As the within-sector effects of good work psychosocial wellbeing, its three sub- account for some of the explanation of indicators (outlined in Table 2) are productivity, it produces a difference in the all negatively related to productivity, all-sector results between Tables 3 and 4. although inclusion of more sub-indicators for this dimension will be explored in The results suggest that there are some future analysis9. However, one of the important differences between sectors in sub-dimensions further illustrates the the effects of good work on productivity. need to be careful in the interpretation The overall results (final column), when of the finding, as the response of “never” the sector effects are included are almost to the statement “After I leave work the same as those reported in Table 3, I keep worrying about job problems” although one or two percentage effects
18 Can Good Work Solve the Productivity Puzzle? Overall + + 8 –7 14 10 –8
10 Health
+ + – 7
30 –42 Education
+ + + + + + 14
administration
Public Public + + + + –
Businesses intensive private private intensive
–
17 14 10 23 22 Knowledge- –11
Businesses intensive Private Private intensive
– + – – –
–7 13 Less knowledge- Less
manufacturing
High-tech High-tech – – – + + – 13
manufacturing
Low-tech Low-tech – + – – 3
–13 –15 Construction
– + + + + + + Primary – – – + 55 60 –33 Terms of employment of Terms Pay and benefits wellbeing psychosocial and safety Health, Job design and nature of work cohesion support and Social representation and Voice balance Work-life Variables Table 4: Individual level regressionTable with good work indices for nine broad sectors (change in productivity, %). onlyNote: statistically significant coefficients shown. are Where values insignificant, are only the possible direction the of impact on productivity shown. is 2. Does good work have a positive effect on productivity? Developing the evidence base. 19 are marginally smaller. Even bearing We have said that there are gaps in in mind the earlier discussion that the the evidence base on good work and estimates reflect the difference between productivity. In the literature review the poorest quality work and the best we could not find evidence for all the (e.g. very dissatisfied and very satisfied), dimensions. We would like to see new some of the sector estimates seem research on two in particular: terms of large. The primary sector and the health employment and social support and sector stand out in this regard, although cohesion. We also identified limitations in we have already noted the problem of the surveys available for the analysis. We defining productivity in the public sector. recommend that UK Government and On the other hand, the knowledge- other survey funders should explore the intensive sector suggests considerable potential support that might be given to support for the link between good work investigating good work and productivity and productivity, with the exception through existing high-quality surveys, such of health, safety and psychosocial as the Skills and Employment Survey and wellbeing. the CIPD’s UK Working Lives Survey. We understand that the existence of evidence will not necessarily lead, in all cases, Implications for research directly to changes in practice. Activities and policy to support these findings to be translated into workplace practice will be important These initial findings are positive and if the UK is to address its productivity encouraging. They suggest that good performance. However, we would still work can be encouraged as a route to encourage further research be undertaken improved productivity. Poorer quality to fill some of the evidence gaps. work strongly correlates with poor productivity. Therefore, if the UK’s long The review of extant literature confirmed tail of poor productivity businesses is that there are inconsistencies in how both to be addressed, one point of focus job quality and productivity are measured, for government policy should be those and some measures are simply proxies. sectors with high incidences of poor- Standard approaches are needed for both. quality work or work that is poor quality We would suggest that the ONS’s measure by several measures. Moreover, our of labour productivity be encouraged for findings suggest that businesses do not use in research – not least for research that always need to have best or leading- is directly government funded. Second, edge practice when it comes to good that the good work measures of job work in order to reap productivity gains. quality be adopted by the UK Government Action from government to encourage and similarly encouraged. We suspect that businesses to introduce changes across the UK Government adopting the seven some of the seven dimensions that most dimensions will drive its use amongst strongly correlate to productivity could researchers and help businesses identify be valuable. where improvements in job quality need to be made to help improve productivity. 3. From trade-offs to win- wins: how we can unlock productivity and good jobs By Tera Allas CBE, McKinsey & Co 3. From trade-offs to win-wins: how we can unlock productivity and good jobs. 21
Introduction Yet, the one thing that could provide a rapid productivity boost – widespread The UK’s Industrial Strategy, Building adoption of technology – is a weakness a Britain fit for the future, is clear on in UK organisations2. Moreover, those its objectives: to increase productivity workers that already have lower wages and ensure good work for all1. These and lower levels of education, skills and are eminently sensible aims. Although employment opportunities are likely to employment has been trending towards face the most pressure from automation. record highs, workers’ productivity has been flat-lining for the last decade, as So what are the prospects for enhancing have real wages. The last time the UK’s both productivity and good work? Where productivity growth was this slow was in are the trade-offs and the win-wins? the 1880s (Figure 2). How can we advance both?
The last time the UK’s productivity growth was this low was in the 1880s.
Figure 2: UK labour productivity growth by decade, 1860–2018.
UK labour productivity growth by decade, 1860-2018 Average annual growth rate, %
3.2%
2.8% 2.6% 2.4% 2.4% 2.2%
1.9% 1.9% 1.7%
1.4% 1.4%
1.0% 0.6% 0.8% 0.8% 0.6% – 1919 1910 – 1979 1970 – 1939 1930 – 1879 1870 – 1929 1920 – 1959 1950 – 1969 1960 – 2018 2010 – 1949 1940 – 1989 1980 – 1869 1860 – 1999 1990 – 1899 1890 1880 – 1889 1900 – 1909 2000 – 2009
Source: Bank of England; ONS; McKinsey analysis 22 Can Good Work Solve the Productivity Puzzle?
Lots of good work, but with people’s average life satisfaction is on serious caveats a slight upward trend6, job satisfaction has remained stable over the years7 The flipside of the UK’s ‘productivity and statistics on health and safety have puzzle’ has been an ‘employment improved8. (Note that although overall miracle’. Employment rates, the total work-related ill-health and injuries have number of people in employment and been on a declining trajectory, self- the total number of hours worked are reported work-related stress, anxiety at an all-time high3. This is true for and depression has shown signs of both women and men, all regions of increasing in recent years9.) the UK and nearly all sectors and age groups4. This really matters: not being In terms of inequality, the UK’s wage unemployed is a critical factor for distribution has become slightly less individuals’ health and happiness5. polarised10. The biggest increase in net new jobs since 2001 has been in But do these jobs represent good work? the medium–low band of £10–15 per The broad picture is surprisingly positive: hour (Figure 3) and, despite statements
The largest growth in employment in the UK has come from occupations paying £10-15 per hour
Figure 3: Share of UK employment in different wage bands, 2001 and 2008.
£5-10 £10-15 £15-20 £20-25 £25+
2001 33 31 17 15 5
2018 26 39 15 14 7
* 2018 prices; distribution based on 4-digit SOC occupations; median gross hourly pay for all persons employed (including part-time and self-employed). Source: ONS; McKinsey analysis 3. From trade-offs to win-wins: how we can unlock productivity and good jobs. 23
Figure 4: Life satisfaction by occupation 2012–2015.
to the contrary, the labour share of and, at least in the UK, typically not the income stopped shrinking in the late most important, component in people’s 1980s11. (Note that there are a lot of wellbeing12. People in many occupations, misconceptions about the labour and let alone individual teams, exhibit capital shares of income. Although there significantly higher (and lower) levels of are genuine measurement issues, much life satisfaction than can be explained of the confusion has arisen because a by their wages (Figure 4). large proportion of the initial academic literature and commentary emanates The single most important reason for from the US, where the capital share, as unhappiness at work? People’s relationship well as income inequality, have indeed with their boss13. Hence the importance risen sharply.) of leadership and management (see below). The ‘boss factor’ also helps explain Even the lack of real wage growth should why the UK’s growing levels of self- not necessarily lead us to conclude that employment are primarily a positive trend: the quality of jobs has deteriorated more than 80% of the self-employed say overall. A significant body of literature that they have higher job satisfaction than suggests that incomes are only one when employed14. 24 Can Good Work Solve the Productivity Puzzle?
But let me be clear: despite all the The people that are likely to be most positives, there is still much unnecessary affected are those that are already suffering. There are too many issues disadvantaged. Employment in –from job insecurity to long commutes occupations with the lowest qualifications to discrimination to toxic workplace is likely to grow 10 percentage points cultures – to cover in this short essay. less to 2030 than those with the highest. They may only impact some, sometimes Demand for occupations with the small, segments of the population, but youngest (aged 16–24) and oldest (aged remember: the Industrial Strategy’s 55+) workers is likely to grow 30% slower stated goal is ‘good jobs and greater than for other age groups. Occupations earning power for all’. with currently high unemployment rates, and low vacancy rates, are likely to face the least employment growth to 203017. The promise and perils of Finally, places like Bristol and London – technology adoption with currently higher pay – will probably see continued robust jobs growth, while That goal contains a contradiction: Bradford or Leicester might not (Figure 5). greater earning power requires higher productivity, but higher productivity In other words, many of today’s could result in a reduction in good jobs. disparities are likely to be exacerbated Although the aggregate economic by the fourth industrial revolution. effects of industrial revolutions in the past have been positive, the impact Yet, the UK cannot afford to turn on individual people, firms, towns and its back on technology. McKinsey sectors has often been negative15. Global Institute estimates that by adopting automation and artificial McKinsey’s modelling of the future intelligence (AI) the UK could raise its of work in the UK suggests that the annual productivity growth by 1–2% impact of automation on aggregate between now and 2030 – a much employment is likely to be modestly needed step-up compared to the zero positive, adding another 1–2 million net or negative growth experienced in the new jobs by 2030. However, around 7 last four quarters18. Moreover, with million jobs (23% of 2017 employment) digitalisation enabling global trade in might be displaced, requiring workers to an ever-increasing range of economic move to new occupations16. activities19, falling behind could seriously hurt the UK’s competitiveness. 3. From trade-offs to win-wins: how we can unlock productivity and good jobs. 25
Figure 5: Average gross hourly pay (2018) and projected change in employment (2017–2030).
From trade-offs and zero-sum virtuous cycles and increasing, rather games to increasing returns and than diminishing, returns20. Just think win-wins of dynamic urban centres, successful technology clusters and winner-take-all Descartes, Malthus, Ricardo, Marx, companies. Pareto. These, and many other philosophers, have shaped the Perhaps counterintuitively, then, the mindsets of generations of economists, way to address the trade-offs between policymakers, business leaders and productivity and good jobs is to move trade unionists. Their key concepts are from a zero-sum mindset to identifying premised on trade-offs: mind versus win-wins. There are many. body, growth versus sustainability, wine versus cloth, capital versus labour, buyer It is a well-established fact that versus seller. (This is clearly a huge – companies with happier and more and unfair – simplification, but made engaged workers also perform better here for story-telling purposes.) Yet, (Figure 6)21. It is also well known the modern economy is full of positive, that high-quality management and 26 Can Good Work Solve the Productivity Puzzle?
leadership results in higher productivity, Shifting mindsets to unlock better returns from information and productivity and good jobs communication technologies (ICT) investment, and higher workplace So, if the win-wins are so obvious, why motivation22. Better managers invest are they not being implemented to a in supporting, training and coaching greater degree? their staff23. Workers whose skills better match their job requirements are more The best answer I can offer is that our productive and motivated24. In such prevailing narratives about the economy a positive workplace, technology is perpetuate too simplistic a mental most likely to augment, not substitute, model; one that I, too, instinctively by overtaking routine, mundane and revert to. The model has remained simple tasks while leaving more creative, dominant for good reasons and it is complex, social and emotional work to often enormously powerful in explaining humans. observed phenomena. But it lacks the
Figure 6: Employee satisfaction. 3. From trade-offs to win-wins: how we can unlock productivity and good jobs. 27 nuance and grit that is now required to complex adaptive systems. From to shift the needle on productivity and GDP to life satisfaction, wellbeing and good work. happiness. From top-down policy levers to human-centric policy delivery. Too many leaders act as if people were machines that unfailingly respond to The good news is that we do know ‘what commands or extrinsic incentives from works’ for changing mindsets25. There above. And too many policymakers fail are four key ingredients: a compelling to recognise that businesses are made change story (‘tell me why I should up of people, not ‘homines economici’, change’), role-modelling (‘show me that or utility maximising robots with an it is a priority’), skills and resources (‘give infinite capability to make rational me the knowledge and tools I need in decisions. Relaxing those assumptions order to think and behave in this new puts us face-to-face with the messy way’) and reinforcing systems (‘make it reality of everyday life. But it is this worth my attention and effort’). messy reality that we must understand and embrace if we want to make So let’s use this approach to make progress. change happen in the three win-win areas that will lead to better productivity In this environment, leadership has and better quality of work: deploying never been more important. Leadership good leadership and management to take on the challenging task of practices26; investing in human capital changing established mindsets. From through life-long learning27; and using trade-offs to increasing returns. From technology to augment humans and to linear and additive to exponential and mitigate some of the risks it creates28. multiplicative. From zero-sum games These are the meta-policies for to win-wins. From perfect rationality delivering a better future for the UK. to cognitive biases. From equilibria 28 Can Good Work Solve the Productivity Puzzle?
4. What do we know about digitalisation, productivity and changing work? By Mary O’Mahony, King’s College London 4. What do we know about digitalisation, productivity and changing work? 29
Introduction communicating such as social media. The digital technologies can be focused Digitalisation has dominated discussions on producers, consumers or both. Those about the economy in recent years. who emphasise the transformative Depending on your point of view, nature of these technologies are keen to digitalisation may be seen as a panacea distinguish them from the earlier wave for slow growth; a minor change that will of ICTs, which included communications have little impact compared to previous and computer hardware and software. technologies; a threat to jobs; or a The present digital revolution affects all phenomenon that offers opportunities sectors of the economy, from those that to transform work. This essay reviews have seen many productivity-enhancing the arguments concerning the impact of changes, such as manufacturing, to digital technologies on both productivity those less subject to technological and jobs, from the lens of both transformations in the past, such as consumers and workers. Before doing adult social care. so, it is worthwhile first to define what is meant by digitalisation. Digital technologies and productivity What is digitalisation? Given the broad nature of this definition, In technical jargon digital technologies it is surprising that, to date, there is not convert information into a digital strong evidence that these technologies form using binary codes that can have delivered discernible additions to be understood by computers. The productivity growth. We can identify economic debate, however, takes a four areas that help explain this: much broader definition and includes measurement of output, adoption lags, anything that enables, generates, market structure and measurement of stores or processes data. Therefore, consumer welfare. Before considering digitalisation is seen as encompassing each in turn, it is worth quoting some broadband and high-speed internet numbers that illustrate the issue. and mobile internet technologies; big data and machine-learning techniques It is now well known that there has been to analyse these data; cloud services a pronounced productivity slowdown that store and process data; new that is widespread across developed ways of doing things that include the economies and also that the slowdown internet of things (IoT), AI, robotics started in the mid-2000s before and augmented reality technologies; the financial crisis. In the US, labour tools that enhance production such as productivity growth slowed from nearly enterprise resource planning, customer 2% per annum in the period 1980–2005 relationship management, and supply to just 1% since then. In the same chain management; and new ways of periods, growth slowed from 2.0% to 30 Can Good Work Solve the Productivity Puzzle?
0.7% per annum in the EU15 and from are likely to swamp any new activities 2.1% to 1% per annum in the EU28. arising from digital technologies. The This is partially explained by weaker incorrect measurement of real output is rates of capital investment, but the not unimportant, but the more we delve data also show a pronounced slowdown into this the less convinced we are that it in underlying total factor productivity, explains the productivity downturn. after allowing for changes in measured capital input. A more optimistic argument is that the productivity gains are not yet visible A section of the literature considers due to adjustment costs, but are just these trends to be unbelievable around the corner. This relies on the given the size and scope of digital idea that benefitting from digital technologies. Some have suggested technologies requires reorganisation of that we are just not measuring output production and retraining of workers, correctly and have highlighted four often involving firms spending large main areas where there is cause for amounts on intangible investments. concern: not fully capturing investments Once this transition period is worked in intangible assets; the quality of through, we should witness increased goods and services; free goods; and productivity growth. A related argument home production. Research carried out is that although there are frontier by academics, statistical offices and firms who have gone through a digital international organisations, such as the transformation, there is also a long Organisation for Economic Co-operation tail of laggard firms who either lack and Development (OECD), have tried the knowledge, leadership, workforce to put some numbers on these possible skills or finance to adopt the new sources of biases. The conclusions point technologies. This in turn suggests a to the importance of quality change need for policies to support these firms. and intangible investments as areas A more pessimistic scenario is based on where official data may be missing some the observation that digital technologies crucial activity, but cannot explain the have concentrated production in the productivity slowdown. Free goods are hands of a few ‘superstar’ firms, often not really free – they are paid for by internet-based giants whose monopoly advertising and the data they generate power deters entry of new firms. and so are included in official statistics. Home production of digital goods Finally, there is another measurement and services – for example consumers argument that is gaining ground. booking holidays at home rather than This is the idea that many of these through travel agents – goes beyond technologies produced at near- the boundaries of national accounts zero marginal cost actually benefit and so is not included in the productivity consumers, and that we need a new statistics. But neither are activities measure of economic performance that such as cleaning and child care, which directly measures consumer welfare; 4. What do we know about digitalisation, productivity and changing work? 31 one that takes account, for example, but their broader applications threaten of the satisfaction consumers derive not just those with low or medium from the use of social media platforms. skills but all workers. These sentiments Productivity change in the volume of are strongest when talking about the output of goods and services may have consequences of AI, given its potential slowed, but connected consumers are, to replicate many aspects of human nevertheless, much better off in many work, from workers locating goods ways than they were before the advent in warehouses to doctors treating of digitalisation. Although there is patients. The extreme position is that in obviously something in this argument, a relatively short space of time almost we are some way from consensus on all jobs will disappear, although more how to measure consumer welfare. Even measured responses point to many more important is that these measures areas of work that will still need human do not directly link to jobs or job versatility and ability to innovate. quality. A production focus is thus also needed to gauge the impact of digital A more sanguine approach is one technologies on jobs. that makes use of the distinction between jobs and tasks. It is tasks, not necessarily jobs, that disappear and Digital technologies, tasks and many tasks that are automated are jobs mundane and repetitive. People who carried out these tasks in the past have Since the widespread introduction of time freed to devote to other, more ICT there has been disquiet about rewarding activities. If AI manages its impact on workers. The earlier to diagnose illnesses, then doctors wave of technologies appeared to be can devote more time to explaining skill-biased, raising the employment options to patients and enhancing and wage shares of the highly skilled overall medical care. These arguments relative to those with low or medium suggest that digitalisation can lead to skills. The literature developed from a transformation of work, rather than a a concentration on employment and replacement of workers. returns of individuals with different characteristics to focusing on the It is still too early to say if the digital tasks they carry out in the workplace. revolution will ultimately lead to Automation was seen as being significantly less jobs or to better detrimental to routine tasks but not to jobs. There will undoubtedly be those whose functions are not easily some job losses, as there have been replicated by machines – mostly those in for all technological changes, but the middle range of workplace skills. implementing the new technologies to gain the most benefit from them will Digital technologies are widely seen probably also lead to new tasks and as reinforcing these previous trends, more jobs. There are likely to be high 32 Can Good Work Solve the Productivity Puzzle?
personal costs for those individuals work and more enjoyable use of leisure caught up in this transition, and past time. Nevertheless, there are also likely experience suggests dealing with this is downsides, with some individuals losing very difficult. Recent work by the OECD jobs and a potential concentration suggests that the cost of retraining of resources in the hands of a small workers to move from jobs at risk of minority, leading to greater inequality. automation to ‘safe haven’ jobs is very Any consideration of how we can large. support more ‘good work’ and higher productivity must therefore take account In summary, digitalisation has the of the uneven impacts of digitalisation potential to enhance people’s wellbeing and develop policy responses to support through consuming higher quality those most at risk by the pace of goods and services, more rewarding change. Can Good Work Solve the Productivity Puzzle? 33
5. Technology, productivity and good work: views from the ground By Fabian Wallace-Stephens and Sarah Darrall, RSA 34 Can Good Work Solve the Productivity Puzzle?
Introduction Yet, this is where the quandary emerges because if productivity is ‘everything’ Paul Krugman, the Nobel Prize-winning to firms and good work can clearly economist, famously said, ‘productivity help organisational leaders raise it, isn’t everything, but in the long-run it then we should probably expect to see is almost everything’. He was talking many more examples of good work about the economy as a whole – the being used to boost productivity in the more productive the utilisation of labour contemporary British economy than and capital, the more prosperous an we do. This is important because any economy – but the same principle is also steps policymakers take to encourage largely true of firms. Putting to one side higher productivity through good rent-seeking, profits can only be grown work must clearly take account of how by the more effective use of people or organisational leaders take day-to-day investment. A firm not improving its decisions about work. A theoretical productivity is a firm that is, at best, perspective alone might miss barriers to stagnating. best practice that would seem obvious at firm-level. This presents something of a logical dilemma for this enquiry. On the one To complement the data-led findings hand, the RSA Future Work Centre and of other contributions to this collection, Carnegie UK Trust have established a this essay attempts to provide fresh comprehensive strategy for measuring insights into the lived experience of ‘good work’, grounded in seven the modern workplace. Working with dimensions of job quality: terms of Carnegie UK Trust, we convened a large employment; pay and benefits; health, workshop with employers from a range safety and psychological wellbeing; of different sectors of the UK economy. job design and nature of work; social We also conducted two in-depth site support and cohesion; worker voice and visits to a franchised restaurant chain representation; and work-life balance1. and an NHS hospital where we spoke Furthermore, as this essay collection directly with workers, managers and demonstrates, this conceptualisation of HR representatives to learn first-hand good work has a positive relationship how technology is transforming their with productivity. organisations and the working lives of their employees. Our conclusions are qualitative, but we hope the granularity provided can add a richness to the ongoing debates about good work, technology and productivity. 5. Technology, productivity and good work: views from the ground. 35
Units through the door: the high degree of standardisation how employers think about (some of which is automated – see productivity later) present in the production line: there are few things other than speed The two organisations we visited as that appear variable when everything part of our enquiry – a franchised is working as it should. However, it restaurant chain and an NHS hospital also reflects an operational ethos that – are clearly very different. They have elides productivity with efficiency, with a fundamentally different approach measurement entirely focused on the to demand: the NHS hospital is only latter. The dashboard does not even concerned with managing demand, measure how many units go through the whilst the restaurant is clearly looking door, or output per hour, but rather the to grow demand. Despite this, we average time it takes the team to serve found both organisations thought a customer. about productivity in similar ways and attempted to raise it largely by We find a similar ethos in the hospital. measuring points of delivery efficiency One representative, when asked the within the organisation. same questions, gave a similar answer: ‘how quickly people get out of hospital’. When we asked the owner of the But our discussion here highlighted restaurant directly, ‘what does it mean more tensions. For example, we were to have a productive day at work here, told how this approach, driven primarily and how is it communicated to staff?’ by centrally directed targets, often he explains that ‘it is all about speed creates stress for staff and that ‘there of service’ and ‘units through the is a delicate balancing act’ as patient door’. The restaurant has deployed a outcomes also matter. For example, range of sensor-based technologies to Patient Reported Outcomes Measures measure this, including a dashboard are used to evaluate the quality of care that measures how long it takes for food delivered by Clinical Commissioning to be ready from the point of making an Groups for patients who have order at the drive-through to the point undergone hip replacement surgery. of collection. Even when pressed directly Nevertheless, targets sometimes seem about whether this measurement can to have an operational priority over capture notions of quality – for example, care. As one interviewee put it, although whether the food is tasty or hot enough health professionals will get ‘told off – he defaulted to the notion that speed by managers for not meeting time of service can also capture this aspect outcomes’ they are not held to account of productivity. In part, this reflects in the same way for health outcomes. 36 Can Good Work Solve the Productivity Puzzle?
The myth of automation: how bad shift, we can pinpoint things, use employers are deploying new the data as a conversation starter with technologies workers to understand why there was a problem’. At both our site visits and our employers’ workshop, we found the deployment At the hospital a handful of robots of new technology to be central to have been deployed in the cancer ward. how leaders seek to boost productivity; However, in contrast to some discussions yet, this does not typically appear to we had elsewhere in the hospital, their be driven by a desire to improve work deployment has been driven by patient quality, or at least that is a second order outcomes rather than efficiency. As consideration. Across all our research, one representative puts it: ‘in the old conversations about how technology is days, you had to have your prostate transforming management practices, removed through open surgery. Now such as performance management we can operate with much greater or shift scheduling, were much more precision’. In fact, by some measures common than those about automation this might actually reduce the number of substituting human work. operations conducted: ‘patients spend less time in hospital beds and have Perhaps the largest technology project better outcomes, but physicians are we observed was the deployment less productive as the procedure takes of self-service kiosks at the fast-food longer, and the equipment is also more restaurant. This has reduced the number expensive’. of staff working on tills but the overall headcount has stayed the same, At our workshop, we also heard how with more people now working in the NHS Trusts are developing ‘digital kitchen. These kiosks are therefore not control centres’ that use real-time data a cost saving in terms of staff time, but to make more accurate predictions have proven to be revenue generating about patient demand to optimise the – customers spend an average of £1 allocation of staff across multiple sites. more per order. There are also good Clearly, the more efficient utilisation of work benefits: in the kitchen automated labour in this way would, by definition, drinks machines free up workers as they have significant productivity-boosting are now only needed to place lids on potential, but ensuring it is rolled out cups, while ‘intelligent grills’ use sensors in a way consistent with good work to automatically detect how long to will be a significant policy challenge. cook different sized burgers. This has The key is to ensure that the risks and allowed the restaurant to serve a wider benefits of flexibility are shared by both range of products. The data dashboard, employer and employee, thus avoiding collected by a variety of sensors at the what the Taylor Review of Modern kiosks themselves, is used to provide Working Practices defined as ‘one-sided intelligence to management: ‘after a flexibility’2. 5. Technology, productivity and good work: views from the ground. 37
Risk or reward: how technology The concern was that the technology affects good work was having the inverse effect to that intended and meant doctors were In the fast-food restaurant, new spending more time doing paperwork, technology was primarily introduced to leading to fears of physician burnout. improve efficiency and generate higher consumer demand. However, we also Where the restaurant encountered uncovered good work benefits. problems with the roll-out of technology, training was viewed by management One worker suggested that she enjoyed as something of a panacea for all her job more since these new systems performance or productivity problems. (automation in the kitchen and the Although workers agreed training was self-service kiosks) had been introduced important, they shared with us several because they ‘made things easier’; additional insights about what they others noted how the kitchen was felt was necessary to work productively, now a quieter and even safer working most of which referred to good environment. Indeed, the most common management. Good managers were complaint about technology was that described as those who were ‘good at it would occasionally malfunction, communicating’ and who ‘know who is which would then make their jobs much best suited to different tasks and how harder. Clearly, technology introduces to make the best of a bad situation’. new dependencies into the business, Workers also felt it was important to but most were keen to stress how, have adequate worker voice channels. relatively speaking, it was beneficial. By this they meant a line manager who Nevertheless, the emergence of these would ‘let them give their point of view dependencies does emphasise the and listen to their opinion’. point that technology can potentially affect skill levels and worker autonomy One method we saw used by managers through lowering the task demands or to motivate workers at the restaurant standardising job requirements. The might best be described as the experience of this standardisation came ‘gamification’ of work – competitions, out in some interviews. One worker with prizes available, for producing shared her experience of working so good performance. Some workers quickly during a night shift that she ‘felt welcomed this, suggesting it made their like a robot’. role more enjoyable. The dashboard therefore effectively tapped into one At our hospital site visit we were also of the more subjective aspects of good warned about how technology can work: pride. ‘I feel very proud to be in place excessive strain on workers. one of the top performing restaurants One representative spoke about the in the country,’ as one worker put it. In introduction of electronic health records theory, there could be a darker edge and how ‘this will change everything’. to this – where poor data is used for 38 Can Good Work Solve the Productivity Puzzle?
punitive performance management. clear here that when autonomy interacts However, the management told with technology, it can generate us the data was only ever used for greater productivity. Not only this, it supportive conversations, and the could allow workers to feel in control, workers we interviewed did not seem which encourages greater acceptance unduly concerned by the possibility of of innovation. Autonomy is not for workplace monitoring being used in this everyone, however. Workers we spoke way. with at the restaurant valued flexibility over autonomy, pointing to the freedom The robots used in cancer surgery to choose how to fit their work patterns provided a good example of where around their home life as one of the key technology is having more positive benefits of working there. effects on health care professionals. Long-term occupational health across Central to the impact of technology the NHS was identified as a major issue on workers is whether it interrupts their by the NHS representatives we spoke core or periphery work; that is, whether to. Robots are seen as a technology it impacts on the elements they identify that could enable people to ‘work much with and care most about, or on those longer from an early age’; for instance that they feel do not contribute to their by reducing risk of back injury because success or happiness. If it is the latter, surgeons ‘could be operating on then workers tend to be largely happy someone while sitting in another room’. with implementation and do not require in-depth consultation. If it is the former, We also saw an example of how, when however, disruption is felt much more workers have autonomy over the profoundly. In the restaurant, many of technology they are operating, it can the tasks did not intrinsically pertain to lead to unexpected but productive the core category, and instead workers outcomes. In the hospital, iPads were cited progression and flexibility as initially introduced for physicians to their key drivers, and hence were more update notes with, but it transpired accepting of technological changes. In that they were actually more useful contrast, much of the work in the NHS for taking photos and examining the hospital hinged on core tasks, and there progression of injuries. Similarly, at our we found technology adoption to be employers’ workshop, representatives slower and more pained. Similar results from the transport sector told us about were found in ethnographic research how workers were using their initiative by Google: office workers perceived it and communicating delays on the to be acceptable for AI to substitute London underground via Twitter. This peripheral work but resisted its use for goes against working procedure but core work. delivers a more effective service. It is 5. Technology, productivity and good work: views from the ground. 39
Who controls the future: At our workshop one employer told worker agency in an age of us how they had used data to make radical technology decisions about technology that improve job design: ‘we used to have Lacking across both sites was a sense high turnover in a particular admin that workers had any agency over the role. Based on this data we decided implementation of new technologies. to automate the role and people now As one fast-food restaurant worker told spend more time in client-facing roles’. us: ‘I don’t know what’s coming – it Some of the restaurant workers also should be a balance between people and spoke about this point. In reference to technology’. But decisions to introduce individualised data, one said, ‘I wouldn’t new technologies appeared to be much mind it at all if it helped with my more driven by a desire to improve progression, then it’s useful’. They could customer experience, although this can see the benefits on a personal level, take time: ‘when we first introduced it recognising that it could highlight how [the self-service kiosk] customers did they could improve their performance not like it, then later when they visited and the subsequent potential for our other stores, they asked why we did promotion. We found similar insights at not have them there!’ Meanwhile, in the hospital, where workplace shortages the hospital we were told that there are have seen health professionals hopes that innovation in the NHS will be other than physicians step up to driven by patients, but that this can slow take on more clinical responsibilities. down the pace of change because ‘apart One representative tells us how ‘in from “expert patients”, most people don’t Endoscopy, we did not have enough know what they would change about doctors, nurses are now clinicians, using health services, that’s why they everyone else has moved up a layer’. suggest things like the food’. However, he adds that not everyone wants to be a ‘quasi doctor’ and so ‘it A common theme across our enquiry is important to release some people’s was that both managers and workers are time to get on with patient care’. And broadly optimistic about new technologies they have ‘got to make sure people but desire a more worker-centred approach are paid right too’ if given additional to adoption. Many employers we spoke responsibilities. to as part of our enquiry highlighted the importance of job design in ensuring that Worker voice is seen by employers as technology changes will promote both crucial to alleviating these concerns. As productivity and good work. To borrow the one workshop participant argued, ‘if words of one workshop participant: ‘the you’re not happy with the tasks you are extent to which automation will change doing you need to be able to speak to the way tasks are allocated is essentially an your manager and communicate this; ethical decision on one level, as well as a you need to have some control over job management decision’. design’. Employers were equally eager to 40 Can Good Work Solve the Productivity Puzzle?
push for change surrounding voice and is to be a driver for good work and representation when radically labour- productivity, it will require a stronger shaping technology is rolled out: ‘we’re focus by employers on job design. As going to need to find practical answers the role of worker voice in alleviating to the questions of how you involve concerns about technology shows, workers in those conversations around employers’ approach to job design the changing workplace’. needs to be both holistic (too often job design strategies focus exclusively on tasks, with less thought about how Conclusion: job design for those tasks ultimately relate to jobs or good work an organisation’s wider systems) and mediated through a process where This last insight emphasises perhaps workers have some agency over the the central message of our research. outcome. Yet if firms can approach Across both sites we found support for technology roll-out in this manner, our the argument that technology tends findings suggest it can have a key role to to change tasks, rather than whole play in the future of both good work and occupations. Therefore, if technology higher productivity. Can Good Work Solve the Productivity Puzzle? 41
6. Can gig work be good work? By Gill Dix, Acas 42 Can Good Work Solve the Productivity Puzzle?
Introduction Although estimates of the number of gig workers vary, the often-heard claim The gig economy seems to have is that there are almost as many gig captured the public and the policy workers in Great Britain as there are imagination. The former stems people working in the NHS (1.2 million)2. from a fascination with the notion Research from the TUC found that of a fast-moving, but often invisible numbers are growing fast, with nearly business model that is driven purely by 1 in 10 (9.6%) working-age adults technology. The policy focus is rooted in surveyed working via gig economy a deeper unease about all forms of so- platforms at least once a week in 2019, called ‘atypical’ work, with their strong compared to around 1 in 20 (4.7%) in associations with insecurity, call-on call- 20163. No matter the size, the atypical off labour supply and low pay. corner of the economy is complex and multi-faceted and it is rightly demanding In broad terms, the gig economy refers an urgent review of whether and how it to short-term employment contracts can be considered good work. or freelance work, as opposed to traditional, permanent jobs. But it often refers more specifically to the use of Balancing flexibility and job online platforms for sourcing such ‘gig security for good work work’1. Although food delivery cyclists may be one of the most visible signs of Gig work, along with other forms of the gig economy, in reality the type of atypical contracts, are at the heart work undertaken ranges from unskilled of an ongoing debate about how we physical work to skilled, creative and achieve the right balance between professional work. business flexibility and individual job security. Depending on your point of The business model on which gig work view, gig workers may symbolise ‘the thrives seems to offer the best of vulnerable human underbelly’ of the both worlds, with the ability to tightly UK’s labour market4 or ‘the springboard schedule and activate workers to meet for entrepreneurial success’5. customer demand. The result? The potential for maximising productivity While clarity around employment status and flexibility. But if we are interested and subsequent entitlement to rights in allying productivity and good work may be on the horizon with forthcoming within this growing economy, we need to legislation, gig workers themselves seem address concerns about the vulnerability divided on how to get this balance. In of such workers and employment a report from the CIPD6, 63% of gig practices that can amount to ‘bad work’. workers agree that the government should ‘regulate the gig economy so that all those working in it are entitled to receive a basic level of rights and 6. Can gig work be good work? 43 benefits’. Yet, at the same time, half the gig economy, there are the added (50%) say that people working in the gig challenges of effective awareness- economy decide to sacrifice job security raising and access to support. and workers’ benefits in exchange for greater flexibility. Again the picture is paradoxical. Some studies, including those by INSEAD9 The Low Pay Commission7 is concerned and Oxford Martin School10 suggest that one-sided flexibility is a problematic that the flexible nature of gig work feature of the modern economy, and the autonomy it can bring may because ‘some employers misuse lead to greater life satisfaction and flexible working arrangements to create a ‘boost’ in mental health, although unpredictability, insecurity of income the driving factor would seem to be and a reluctance amongst some workers worker preference when it comes to to assert basic employment rights’. following this line of work11. A report The government has issued a response from Gallup12 found that ‘compared with a focus on securing hours of work with traditional workers, independent and notification of cancelled hours. gig workers enjoy much higher levels Other non-legislative initiatives are of flexibility, creativity, autonomy and also emerging to redress the balance. even feedback’. But again much would For instance, the Labour xchange seem to rest with choice – with those app8, supported by Community, stops working as ‘free agents’ in this economy employers from hiring the same person reporting greater satisfaction than those more than three times, and instead there ‘out of necessity’. suggests they offer them a permanent post. Elsewhere, we are seeing an increasing number of ‘WorkerTech’ The limitations and solutions aimed at improving access to opportunities for social protections and rights for gig workers. cohesion and voice
An aspect of good work proposed by Thriving while being out of the Carnegie UK Trust and RSA13 is sight intended to measure the nature of the relationships we have at work. In the Wellbeing – physical and mental – case of gig working, we know it can is increasingly part of the debate involve not just the absence of peers, about how we live and work. But but also the absence of identifiable when it comes to gig work, out of line managers. Gallup14 found that sight could easily mean out of mind, because gig workers ‘are not true eclipsing the importance of protecting employees, it is difficult to directly health and wellbeing. This is also a manage and motivate’ them ‘using problem for remote workers in more a typical approach to performance traditional workplace settings, but in management’. 44 Can Good Work Solve the Productivity Puzzle?
Performance drivers may also be ‘standard’ work. The World Bank has narrow. Wood15 found that algorithmic argued16 that facets of the labour rating-based control is central to the markets in developed and developing operation of remote gig platforms and countries are already converging. ‘workers with the best scores and the most experience tend to receive more If the future of work is to be based upon work due to the platforms’ algorithmic core values that can be applied across ranking of workers within search results’. all parts of the economy, then there This leads workers to work long hours are three issues that need our urgent to please the rating system and to attention: compete with other workers potentially based anywhere in the world. Find the right contractual status in law to protect rights Similarly, the dispersion of gig workers and promote job security, while presents problems in terms of how also recognising the importance organisations can properly engage and of worker preference and self- communicate with them. And even if identification. The point here is they are seen, can they be heard? There not just about legal entitlement; are encouraging signs that worker voice it is also about shifting the is beginning to reinvent itself with the culture of uncertainty and help of campaigning platforms such rebalancing the give and take of as Coworker.org and Organise. Further, the workplace relationship. the creation of self-organised digital communities, as outlined in research by Use the right voice channels Oxford University, has placed some of in order to amplify worker voice the negotiating power back in the hands and representation. This is an of workers who can ‘warn each other issue that goes back well beyond of bad clients, recommend good clients any current preoccupation and attempt to influence pay’. with the gig economy, but is exacerbated by the remoteness of relationships and low Conclusion expectations of working life.
Gig work is at the front line of an Build new forms of workplace ongoing transformation of the social relations to fit the economy. contract. With increasing business There is the need for a new, globalisation, the prevalence of long realistic narrative on what good supply chains and complex webs of working relations can look like contractual arrangements, there may – a model that drives productivity be less of a distinction than we think but also worker engagement between the alternative platform and wellbeing in the absence of economy and what constitutes regular, personal interaction. Can Good Work Solve the Productivity Puzzle? 45
7. Enabling fair work, productivity and inclusive growth: lessons from Scotland By Patricia Findlay, the Fair Work Convention and the University of Strathclyde 46 Can Good Work Solve the Productivity Puzzle?
Introduction in addressing complex problems that require innovative solutions. These Fair work – that offers opportunity, ‘wicked’ problems span low relative security, fulfilment, respect and productivity and innovation; low pay, effective voice, and that centres on unequal pay and in-work poverty; under- reciprocity and mutual benefit – lies employment and skills under-utilisation; at the heart of policy priorities in work intensification; income inequality Scotland aimed at driving productivity, and limited social mobility2. Addressing growth and inclusion1. Fair work is the potential benefits of fair work for explicitly embedded in the activities, productivity involves focusing on the strategies, policies, practices and need for supportive management performance indicators of the Scottish practices that harness the productive Government and its public agencies. potential of labour. Crucially, fair work is increasingly recognised as important by employers, This essay makes four key arguments employers’ organisations, trade about the crucial need for, and role of, unions, campaigning and civil society fair work. The first is that fair work is organisations, fuelling a constructive necessary to deliver inclusive growth. and challenging debate across civic The second is that a commitment to fair Scotland. work drives a better approach to value creation and capture and is a choice This hasn’t happened overnight. The (within constraints) that employers fair work agenda in Scotland builds can make. The third is that employers upon multiple stakeholder networks are the primary actors in delivering (researchers, unions, employers, fair work: as key decision makers, their policymakers and campaigning choices of business models, technology organisations) that acknowledge the adoption, and management and HR centrality of work and workplaces to practices really matter. The fourth is economic, social and civic life, and the that constructive engagement between need to engage holistically with distinct key workplace stakeholders supports stakeholder interests and objectives employers in delivering fair work. 7. Enabling fair work, productivity and inclusive growth: lessons from Scotland. 47
Fair work is key to delivering challenges, solve problems, offer insights inclusive growth and ideas for business improvement and who create more value. Governments As inclusive growth has gained traction and society miss out on tax revenues, in policy debates, definitions3 have and on returns from education and skills focused heavily on two components: investment. improving opportunities to participate in economic life and the need to benefit from this participation. These are, of Employers are the key actors in course, linked because participation fair work without sharing in benefits makes growth unjust, while benefitting Employers are at the heart of how without participating in economic life fair work might better create value represents a welfare approach rather and drive productivity. It is employers than an approach to growth4. Implicit who make the decisions that govern in discussions of inclusion is a growth the character of work and workplaces, effect that is hoped to arise from more largely unconstrained by policy beyond people engaging in economic activity statutory minimum standards. This and from the positive wider economic is not to underestimate the potential benefits thereof. power of regulation, but to recognise its inevitable ‘bluntness’ as a driver of However, what is missing is what comes change within widely heterogeneous between participating in economic businesses. It is also to recognise life and sharing in its rewards – that is, widely differing appetites in the UK the process of creating value. Fair work for regulating the labour market and spans all three key elements of inclusive workplaces, and that employment law growth: by ensuring that workers have and corporate governance powers are first, opportunities to participate on reserved to Westminster. equal terms in work, second, that they have a constructive role in the value Whether or not individuals can access creation that participation entails, fair work isn’t down to the luck, nor is and third that they are able to derive it simply a reflection of their individual benefits from the distribution of that talents, skills, qualifications and effort. value5. The workplace is, therefore, the Employers’ decisions shape the kind of crucial domain in bridging inclusion and work that is available. Those decisions growth. are constrained but crucially, the constraining factors do not determine The cost to individuals of not having fair the fairness or otherwise of work. work is often plain to see. But businesses Businesses even in the same sectors also miss out on the benefits that fair can – and do – make quite different work brings: more engaged, committed decisions that shape the nature of work. and adaptable workers who identify Of course, some employers choose 48 Can Good Work Solve the Productivity Puzzle?
business models that are in character reputation, recruitment and retention, inimical to fair work. Where this is the and from having a more diverse case, more effective regulation and workforce with a richness of talent and enforcement may be needed to make ideas. Management and HR practices a difference, as these employers are that promote security and stability of unlikely to be responsive to persuasion employment, income and working hours and soft influence. can reduce turnover; increase returns from investment in training; generate trust and commitment; increase Fair work is a choice employers willingness to learn, adapt and change; can make and the discretionary behaviours that support productivity improvement. By Employers as key decision makers can providing fulfilling work that underpins choose to achieve their aims through self-belief and self-worth, employers can committing to fair work. Fair work support improved task participation, can drive a distinctive – and better and where work is designed to harness – approach to creating value and skills and talents, this helps unleash sharing it. Recent work by Findlay et al.6 creativity and innovation. Ensuring highlights employers’ choice of business respect at work and ensuring dignified models that ‘design in’ practices to treatment enhances health, safety and reduce in-work poverty that enhance wellbeing, with positive implications for employee performance and business productivity. Respectful relationships at outcomes. work improve communication and social exchange, encourage idea generation Positive choices are available to and learning and can support workplace employers across all five fair work cohesion, all of which can improve dimensions – opportunity, security, performance and productivity. Crucially, fulfilment, respect and effective where employers seek out and listen voice – that can enhance business to employee voice and support staff performance and productivity directly participation in decision-making at work, and indirectly. Employers who support staff are more likely to resolve problems fair opportunity to enter, develop and and conflicts, and to contribute progress in work can benefit from better creatively to performance. 7. Enabling fair work, productivity and inclusive growth: lessons from Scotland. 49
The role of collaboration, Scotland’s National Performance challenge and constructive Framework, which sets out a vision of engagement by stakeholders national wellbeing and charts progress towards this through a range of social, Notwithstanding employers’ central environmental and economic indicators. role, a complex ecosystem of actors and institutions can support and The approach of the FWC has been challenge employers to deliver fair voluntarist and social partnership- work. The establishment of the Fair oriented – winning over employers to fair Work Convention (FWC) in 2015 and work by presenting its positive impacts the launch of its Fair Work Framework on business; adducing and assessing in 2016 were defining moments for evidence to identify what works best; fair work in Scotland. The FWC’s role sharing best (and worst) practice; is to advise Scottish Government and engaging in continuing dialogue on to advocate for fair work. The advice areas of agreement and disagreement; focuses on how Scottish Government and having a voice that engages with might use any policy levers at its different groups of workers, different disposal to support fair work and how sectors and sizes of business, and it might influence the UK Government. with the many different challenges The advocacy connects the FWC to that employers currently face. These employers and their representatives, activities entail practice, policy and unions, employees, public agencies and research challenges, but also highlight bodies, regulatory and professional the opportunities and potential of fair bodies, campaigning groups and civil work to address real issues relating to society organisations. labour supply, economic uncertainty, automation, demographic change and A number of actions clearly signal environmental sustainability. the degree of government, and First Ministerial, commitment to making fair Improving and enhancing what happens work a reality. These include the Scottish in work and workplaces is, or should Government’s acceptance of the be, a key focus of public policy. The FWC’s Framework; its attention to fair delivery of fair work can be shaped work across a range of its policies and through business support, economic priorities; the requirement to help deliver development and skills provision; the fair work placed on public agencies; the creative use of procurement approaches development of a wide-ranging Fair and grant funding (Fair Work First7); and Work Action Plan within government; by nudging employers towards fair work and, notably, the incorporation of fair as an important component of social work measures within government legitimacy and business responsibility. performance indicators. ‘Quality jobs Policymakers can also use their influence and fair work for all’ is enshrined in to deter business approaches where as one of 11 national outcomes in there is little reciprocity, where workers 50 Can Good Work Solve the Productivity Puzzle?
carry the burden of risk or where Conclusion negative outcomes require remedial action by the state. Fair work in Scotland is an aspirational agenda steeped in workplace practice A crucial part of the fair work agenda and experience. At its heart is an explicit is to establish common cause with recognition of the need to balance trade unions, consumers, campaigning the rights and responsibilities of all organisations, civil society organisations workplace stakeholders and to build and communities, and to increasing mutual benefit for workers, employers their engagement with businesses and society. All five dimensions of fair and other employers. The Working work support enhanced value creation Together Review8 that advocated the and are inextricably linked to wellbeing. establishment of the FWC made a clear statement about the contemporary Although considerable progress has relevance of trade unions who are been made, there is a long way to acknowledged as legitimate actors go to achieve Scotland’s ambition to and important resources in the pursuit be a world leading fair work nation10, of fair work. Unions have engaged and delivering fair work remains constructively with the fair work agenda, challenging, requiring patience and recognising their own members’ perseverance. Capturing impact is priorities but also employer and sector complex, but measuring progress pressures, as the FWC’s recent Inquiry remains important to delivering on this into social care9 illustrated. ambition. The fair work agenda affords an enormous opportunity, but it also brings a significant responsibility for stakeholders to be creative, develop new thinking, identify new solutions and develop their own internal capability. The emerging debate on fair work in Wales, and good work at UK level, offer important opportunities for learning from similarities and differences of approach. Crucial to the progress of fair work is embedding it in the architecture of government and in the narratives of employers, workers, unions and citizens. Can Good Work Solve the Productivity Puzzle? 51
8. Fair work, low pay and productivity in Wales By Alan Felstead, Cardiff University 52 Can Good Work Solve the Productivity Puzzle?
Introduction has played out in Wales where both productivity and pay are relatively low. Productivity matters because it is the main determinant of living standards The negative consequences of low and so it affects us all. Higher productivity are recognised by the productivity makes employers more Welsh Government. In its current competitive, provides the foundation economic strategy, Prosperity for All: for wage increases and increases the Economic Action Plan1, for example, it government’s tax revenues. Everyone is mentioned 19 times. Figure 7 shows stands to benefit. The reverse is also the scale of the productivity gap in the true with low productivity likened by UK. According to the latest available Frances O’Grady, general secretary of evidence2, Wales is second from bottom the TUC to a ‘self-inflicted wound’ with in the labour productivity league table, everyone losing out. This short essay falling short of the UK average by 16%. demonstrates how this dire warning Only Northern Ireland does worse.
Figure 7: Labour productivity by region/country, 20173.
London South East Scotland East of England
North West South West North East West Midlands Yorkshire and The Humber East Midlands Wales Northern Ireland
80 90 100 110 120 130 140 UK=100 8. Fair work, low pay and productivity in Wales. 53
Figure 8: Labour productivity in Wales by sub-region, 20174. Powys Gwynedd Conwy and Denbighshire South West Wales Isle of Anglesey Swansea Gwent Valleys Bridgend and Neath Port Talbot Monmouthshire and Newport Cardiff and Vale of Glamorgan Central Valleys Flintshire and Wrexham 60 70 80 90 100 UK=100
The picture gets no better when This is both reflected in, and reinforced patterns are examined within Wales. by, relatively low pay in Wales. Workers Figure 8 shows that productivity is in Wales are lower paid and the below average for the UK in all of parts prevalence of low pay is higher than in of Wales. In 2017 the sub-region with the UK. The most recent data for 2018 the highest level of labour productivity suggest that the average pay level in was Flintshire and Wrexham in North Wales was 90% of that in the UK as Wales, but even here productivity a whole and 71% of the average pay lagged the UK average by 3%. The level of those living in London. This is a lowest labour productivity performance pattern that is reflected in the relatively was in the rural sub-region of Powys, poor productivity performance of Wales with productivity 35% below the versus other parts of the UK. Median UK average; this was the lowest gross weekly earnings for full-time adults productivity level across all the sub- working in Wales were £509 in April regions in the UK. 2018, while in the UK they were £569. Median gross weekly earnings in Wales were the second lowest amongst the 12 UK countries and English regions5. 54 Can Good Work Solve the Productivity Puzzle?
Over a quarter (26%) of employees in Pembrokeshire, Gwynedd, Anglesey Wales in 2018 earned less than the Real and Conwy – more than three out of Living Wage. Rather than falling, this ten workers were paid less than the share has been rising. The proportion of Real Living Wage in 2017 – while in employees paid less than the Real Living Caerphilly, Cardiff and Neath Port Wage was 2 percentage points lower Talbot around a fifth of workers were in 20126. Furthermore, in 2017 Wales low paid according to this definition. had the second joint highest proportion This patterning of results corresponds of jobs that paid below the Real Living to the patterning of productivity Wage and was one of only two areas performance with, for example, that saw the proportion of such jobs Gwynedd and Anglesey having relatively increase in prevalence7. low productivity alongside a higher prevalence of low pay, and Cardiff and There is also considerable variation Neath Port Talbot having relatively high within Wales (see Figure 9). In five Welsh productivity but a lower prevalence of local authorities – Blaenau Gwent, low pay.
Figure 9: Distribution of low pay across Wales, 20178. 8. Fair work, low pay and productivity in Wales. 55
In response, the Labour-controlled Welsh collective bargaining and trade union Government has set about making a membership. Although these moves are number of changes designed, first and primarily focused on making Wales a fair foremost, to make Wales a fair work work nation, they may, as a by-product, nation, but also to boost productivity raise productivity by creating a work and close the gap with the rest of environment where workers are willing the UK. With this in mind, the former and able to come up with new and First Minister set up the Fair Work innovative ideas10. Commission to make recommendations about how to promote, strengthen and However, there are limits to what the measure progress to making Wales a fair Welsh Government can do legislatively nation. The report was published in May within the current devolution settlement 2019 and all 48 of its recommendations and the time horizon to act is short, with were accepted two months later9. A key the next Welsh Assembly elections due feature of these recommendations was in May 2021. We can therefore expect that the Welsh Government uses its to see concerted efforts made by the influence and commissioning powers current First Minister and his team in the to promote payment of the Real Living coming months to do whatever they can Wage, known in Wales as the Welsh to make Wales a fair work, and hopefully Living Wage. The primary aim of this more productive, nation. recommendation is to reduce in-work poverty, which is higher in Wales than elsewhere, but also to protect good employers from unfair competition by unscrupulous employers keen to ‘race to the bottom’. It is also designed to shock employers into making more effective and productive use of available labour and, as a by-product, raise productivity.
Strengthening employee voice, both collectively and individually, is also a key aspect of the Fair Work Commission’s recommendations. Plans are now in place for a Social Partnership Act to be enacted by the Welsh Assembly. This will give social partnership a statutory footing so that the collective voice of workers is heard within the Welsh Government and other public bodies. The Welsh Government has also committed to promoting 56 Can Good Work Solve the Productivity Puzzle?
9. The challenge is urgent but not new: good work, productivity and lessons from Tavistock By Zayn Meghji, RSA 9. The challenge is urgent but not new: good work, productivity and lessons from Tavistock. 57
Introduction commonplace and workers were often absent. These problems are notably The Good Work agenda is gathering familiar: the trading of productivity speed. In a context of rapid against job quality and the stunted technological change and the UK’s relationship between technological productivity puzzle, the focus on how job innovation and productivity. quality and productivity can be allied is certainly urgent, but it is not new. The Tavistock suggested that the technical In fact, in the post-WWII period the system of the mines had been prioritised UK attempted to answer a number of above the social system, an insight that questions that we are still asking today. forms that basis of the socio-technical approach. Labour had been inflexibly The Tavistock Institute archives chronicle divided to suit machinery, damaging over 30 years of engagement with interpersonal, workplace relations what might be termed the ‘quality of and undermining the groups that had working life’. This engagement led to developed to cope with the acute stress the development of their socio-technical of working underground. Having seen approach, which considered workplaces that groups that worked with autonomy as having social and technical systems were more productive, the researchers that require balancing. Exploring identified the disjuncture between the this archive, there is an inescapable social and technical system as the driving sense of the past repeating itself — factor behind the failed promise of technological upheaval and economic mechanisation. The solution proposed and political uncertainty – raising the was to form small, secure coalface working question of how past perspectives might groups, skilled in multiple tasks and challenge and enrich current ambitions organised around tasks that they were around Good Work. What challenges able to fully complete. did the movement face, and how did it adapt? What did they leave behind, and For the Tavistock, the socio-technical what should be taken forward? approach appeared to offer a positive alternative to the oppressive focus on efficiency that stemmed from the work The socio-technical approach of F.W. Taylor, whose 1911 monograph Principles of Scientific Management The Tavistock’s landmark National Coal focused on standardising time and Board project illustrates some of the key workflows. The hope of a positive innovations of the movement, as well as alternative that mutually reinforces the key tensions. This was the Tavistock’s productivity alongside quality work second industrial project beginning in survives in today’s Good Work agenda. 1950. Despite promising new technologies, However, the history of the Tavistock productivity and morale in Britain’s mines movement speaks to the difficulty of had slumped — labour disputes were balancing these two ambitions. 58 Can Good Work Solve the Productivity Puzzle?
Quality and productivity: at term success of their work. Revisiting odds or against the odds? one colliery, it transpired that that the working groups had broken down after The Tavistock’s idea of giving one year when management decided to employees more autonomy in how move some members to a new coalface. they approached the coalface was not In weaving sheds in Ahmedabad, well received. A significant factor in this India, where similar reforms had been reluctance was growing pressure on introduced, there was found to be little the British coal industry from a rapidly remaining understanding of the thinking expanding oil industry, which provided behind the working groups and, as a a strong imperative for automation, result, earlier patterns of management negotiated through painstaking had reasserted themselves. Both agreement with the union. This projects speak further to the frailty of agreement traded the equality and trust innovation, but in particularly to the of working groups for better pay for the difficulty of maintaining success past operators of new machinery, ultimately initial experimental conditions. short-circuiting the reforms. This observation is not just the benefit The fragility of innovation is a common of hindsight. The Tavistock Institute was and troubling theme that underlines the quick to realise it too, turning to ideas dependence of success on capricious that put the participatory element of forces. External circumstances that their action research approach at their are beyond control played a large core. This conclusion influenced the role in the fate of the socio-technical development of dozens of industrial approach, with the oil crisis of the democracy experiments in Norway. 70s, in combination with Margaret Although industrial democracy – as Thatcher’s harsh productivity agenda, introduced by the 1977 Bullock Inquiry enough to dampen the appetite for – was met with resistance from both experimentation in workplaces. The employers and unions in the UK, difficulty of successful innovation ironically in other parts of the world, and the importance of the external industrial democracy is still associated environment undoubtedly pose a with the UK. challenge to the Good Work agenda, which is itself framed against a turbulent present-day backdrop. However, the post-war movement faced difficulties well before its eventual decline in the UK.
Some Quality of Working Life (QWL) projects had follow-up studies that help to provide insight into the long- 9. The challenge is urgent but not new: good work, productivity and lessons from Tavistock. 59
Key challenges for the Good Work agenda
1. Innovation often fails through 3. Clarity is as important as no fault of its own. The QWL ambition. The Tavistock experiments took place within experiments were often ambiguous: turbulent technological and were the researchers on the side of socio-political contexts. Context improving the lot of workers, or on can often have a material effect: improving managerial efficiency new technology can fragment and control? Of course, it is never an existing social system and the quite so clear-cut, but ambiguity threat of an emerging resource is not a good strategy for change. can derail an experiment. Brexit Good Work can be subjective, and the threat of automation are but it is important to be able to just two destabilising forces that demonstrate progress against clear could undercut the Good Work measures, particularly if it is to agenda. Although it’s true that speak to the public. disruption and innovation are often reciprocal, research suggests 4. Awareness of legacy. Of 32 that innovation capacity relies to of the Norwegian industrial some extent on job quality. democracy experiments, only five were maintained over a significant 2. The importance of quality time period. With worker voice work must be articulated an important aspect of the Good on its own terms. In practice Work agenda, it is important and under pressure, job quality to be mindful of the long and consistently comes into tension complicated legacy of experiments with the bottom line. The Tavistock in this space. These experiments experiments were most often made progress beyond worker motivated by concerns over representation on company boards productivity and fraught industrial but encountered challenges from relations. Once the incentive which we can learn – for example, for change was removed, the only four of the 32 experiments experiments often withered. The were started on the initiative of aspiration of Good Work needs unions. Good Work builds on, and a broad-based consensus that is legitimised by, a history of trial establishes itself as an ambition in and error. It is important that the and of itself. movement is aware of that. 60 Can Good Work Solve the Productivity Puzzle?
What has changed? floors necessitate technological fluency. RSA’s work on economic insecurity has As our understanding of emergent shown that there is wider societal anxiety technologies such as automation and over an expected deterioration of the algorithms has developed, so too has quality of work, despite employment rates the importance of understanding rising. There is, therefore, a clear role for what these mean for the ambition of Good Work, and job design in particular, Good Work. Despite the prevalence to ensure that the opportunities of of narratives around losing jobs to technology are realised and the associated automation, it’s much more likely that expectation of drudgery is not. The socio- the nature of work will change – it is technical approach, which prioritises the estimated that three in ten jobs will balancing of technical and social systems require different skills as a result of in the workplace, is highly relevant – but automation, compared to one in ten is there any reason that it should be more that might be lost. successful now than in the past?
Those more inclined to pessimism might Today the dynamics of the workplace see that this raises looming questions have changed, there are less antagonistic about how to maintain job quality in industrial relations, a different future workplaces. Some of the usual management agenda, as well as rising touchstones of job quality – ownership expectations from employees of a greater of the whole task, multi-skilled work, quality of working life. The confluence of creativity – do not fit naturally with these changes may provide fertile ground workplaces dominated by the technical for the reorganisation of work around system. There is already a trend towards the principles that drove the work of the the monitoring of workplaces, for Tavistock Institute. Principles such as example to collect data to assist with employees participating in the design of shift scheduling. In opposition to the the jobs they perform; the autonomy of obvious concerns associated with such workers to decide how a task is performed; practices, however, RSA’s work with opportunities for progression and a retail experts suggests that monitoring sense of purpose; and work designed for could present an opportunity, with data continued learning. Principles that speak allowing more informed job design and to the Good Work agenda. empowering individuals by offering bespoke opportunities for career The search for Good Work must be open progression. to ideas from around the world, but should equally remember the history In the retail sector there is a sense that of the UK, not just to pay lip service to jobs may actually become more fulfilling a rich heritage, but to ensure that we as customer experience becomes a key are fully conscious of the challenges of differentiator for brick and mortar shops, an extremely worthy ambition: fair and and as technologically advanced shop decent work for all. Can Good Work Solve the Productivity Puzzle? 61
10. Is it time to turn the future of work on its head? By Josh Hardie, CBI
with support from Jennifer Beckwith and Felicity Burch, CBI 62 Can Good Work Solve the Productivity Puzzle?
Why adopting productivity- The only way we adopt boosting tech depends on good productivity-boosting work, rather than being a threat technology in the first place is to jobs by providing good jobs
Innovation and the uptake of proven Experts can tie themselves in knots technologies are much talked about when debating how to improve the in the productivity debate. So are UK’s productivity. But all can agree that management practices and the quality technology adoption is one area where of people’s jobs. But too often these we really need to raise our game. When themes are presented as an ‘either/or’ it comes to investing in a whole range – not a week goes by without another of technologies, even straightforward headline debating whether robots are things like accountancy software lined up to take our jobs or whether a life or websites, the UK is, on average, of increased leisure awaits. Technology average1. is presented as an existential challenge to current employment models. The trouble is it’s easy to There is no question that the way implement technology technology affects and changes badly, and poor technology people’s jobs needs to be considered implementation leads to poor and planned for. But worrying about outcomes robots threating the future of good work risks looking through the telescope Show me a person who hasn’t had an from the wrong end. Good work is experience of an IT implementation a prerequisite for good technology gone wrong. We all have a story to adoption, not inevitably threatened by tell of when our employer invested it. Whether it’s game-changing or tried- in some new kit and it was harder and-tested digital, engaged employees to use, added complications to our who are recognised by their managers day and felt downright frustrating. and have opportunities to develop are Negative experiences of technology the foundations for innovation. implementation make companies less likely to invest again, discourage employees from engaging and, crucially, won’t lead to the productivity improvements promised. 10. Is it time to turn the future of work on its head? 63
That’s where employee people’s satisfaction, progression and engagement, skills development development, and also of recruitment and effective leadership comes in and retention as a baseline marker of how motivated and engaged people are Good jobs are mission critical for at work. technology adoption. While opinions differ about exactly what makes a job Third, tapping into external networks good, there’s broad agreement that is vital for leaders to bring good delivering them comes down to three technology and people strategies into things: effective leadership, employee their business. Cumbria Crystal – the engagement and a commitment to last UK producer of lead luxury crystal develop people’s skills. Even small with a 23-strong team – doubled its improvements are associated with turnover and trebled its margin after sizeable productivity uplifts – if a several technology and people change business performing at the lowest levels projects. Its CEO largely attributes their of management can improve to just success to Productivity through People, the UK average, they can see a massive a 12-month leadership programme run 19% productivity boost2. Here are three by Be the Business in partnership with key steps all firms can take: BAE Systems, EDF Energy, Leonardo, Babcock International, GSK, John First, leaders need to articulate why Lewis, Rolls Royce and Siemens. This they’re adopting new technologies and programme enabled the CEO to learn role model new processes. With any from a varied network of business strategy that requires behaviour change, leaders who could challenge every engagement starts when people aspect of the business strategy and understand the ‘why’. Effective leaders operations. As a result, Cumbria Crystal articulate why technology adoption, and invested in a new ecommerce platform bringing people along on the journey, to widen its customer base alongside should be an organisational priority. greater development opportunities Leaders build on this when they practice for the team. Thirty-five per cent have what they preach: organisational been trained in new processes and ways transformations are over four times of working, whilst the organisation’s more likely to stick when leaders role Retail Manager has since participated model the change the business wants in Productivity through People to help to see3. ensure that customers and the team are getting the best out of its ecommerce Second, to keep the business investment4. accountable, leaders should set, and be responsible for, targets towards technology investment and the people aspects that make it possible. That means keeping track of 64 Can Good Work Solve the Productivity Puzzle?
Technology adoption lives or Businesses that can access the dies by the extent to which a digital skills of the future will business engages its people. develop their own people.
Genuine employee engagement – People want opportunities to grow ensuring that people are listened to – 30% of UK workers say they’re and their views acted upon – is a game unhappy at work because they lack changer for technology adoption. In career progression7. Businesses need to part it explains why businesses with the provide such opportunities too – firms highest levels of employee engagement that develop the skills and strengths can see profits 22% higher than those of their people are able to reduce staff with the lowest5. Successful technology turnover by, in some cases, as much as adoption can only happen when people 72%8. When it comes to developing understand how their role contributes and implementing new technology, to the organisation’s goals, why their companies need to ensure they can engagement matters; and have a voice on access the technical skills they need. how new processes can be done better. As many companies seek to transform, When Integrity Print moved away these skills are in short supply. Two-thirds from printed products as they were of businesses already have unfilled digital increasingly being replaced by digital skills vacancies and 95% expect their digital alternatives, their workforce had to make skills needs to grow9. While some firms a cultural shift. This required training and are cautiously optimistic that they will be development, and a change in working able to hire the right skills, it’s a pressing practices. Integrity actively engaged challenge that most are predominantly employees in the change through fishing in the same pool by seeking to hire workplace education and industry site externally to address skills needs. visits to learn best practice. Developing digital print production has given the This will sometimes be the best business the confidence to engage with a approach, but you could be missing a wider customer audience. A new digital, trick. Businesses should look to their own data-driven service has contributed to workforces to find ‘hidden skills’ (think sales of £6m per annum that will grow about the millennial who codes in their to a minimum of 20% of Integrity’s spare time); identify opportunities to turnover in the next two years6. retrain people whose transferable skills could be used in new roles (question whether your telesales team could move to digital sales); or work with partners to develop complementary skills.
Sellafield did just that, introducing a Digital Innovation Suite that 10. Is it time to turn the future of work on its head? 65 enables people across the business The hard truth is that to collaborate on digital projects businesses tend to overestimate and upskill. There’s an off-network how well they lead, engage and interactive room where a wide range develop their people. of employees can consider challenges such as manual reporting; trial new CEOs are far more likely than other approaches; and develop their skills in managers to believe that their company automated reporting or Robotic Process has adopted effective ways to lead, Automation. Digital solution suppliers engage and develop their people, provide the knowledge, experience and often because the business cannot skills training to deliver the initiative effectively measure and benchmark in conjunction with Sellafield. This their performance. approach has enabled an agile, fail- fast, sprint-based cultural change at Sellafield, providing faster route to There’s often no shared view further technology adoption10. of the nature of the problem or what can be done to solve it amongst leadership teams. It’s clear: good work is critical to tech adoption, but what’s Communication between the CEO, stopping progress? Executives and HR Managers is vital to ensure that different views about how Delivering effective leadership, the business is performing on people employee engagement and and what’s holding back progress are development day-in, day-out, is easier discussed. Without it, firms face inertia said than done. It requires a relentless as different parts of the business cannot focus from leaders and managers pull towards shared objectives. to ensure that HR policies are put into practice, progress is measured, benchmarked and accounted for, and to ensure that objectives on people are put on a par with short-term commercial targets at the top and throughout the line.
Some UK firms have succeeded, but overall the UK’s effectiveness lags competitors – if UK businesses matched their performance on people management to their US peers, the productivity of the UK workforce would jump by a massive 12%11. 66 Can Good Work Solve the Productivity Puzzle?
Leaders often underestimate 2. Put people management on a how important their words and par with commercial targets actions are in making good Managers make good work a work a reality. reality day-to-day. They should be incentivised and rewarded for the CEOs are overwhelmingly likely to want time they spend engaging and to improve how their business leads, developing their team, with key develops and engages its people. performance indicators on people But too often the rest of the business management given equal weight does not see it. Just like adopting new to their commercial objectives and technology, leaders need to be front linked to their reward. and centre in communicating and role- modelling why people’s management, 3. Assess how your business is engagement and development is performing on people mission critical. Keep track of how different parts of the organisation perform Irrespective of size or sector, all UK firms against your people targets. Using need to do the groundwork to unlock the external benchmarks to see how benefits of technology investment and you compare to competitors can their people. While there is no one-size help identify how to improve. fits all, firms must start somewhere. Adopting technology and delivering To up your game on technology, first good work isn’t an ‘either/or’ for look at how you’re leading, engaging business. Implementing new technology and developing your people. Here’s depends on leaders and managers where you could start: articulating a vision for change, engaging people in the process and 1. Set and be accountable for developing the skills of their team. To targets on people and regularly get this right, UK businesses needs to communicate progress learn from each other on technology Ensure that responsibility investment and effective leadership for people’s management, and management. Done well, good engagement and development is jobs enhanced by new technology taken at board-level and shared have the potential to reshape the across the businesses, not just in future of work and turbocharge UK HR. What gets measured gets productivity. done, and regularly communicating progress helps people know the leadership team cares. Can Good Work Solve the Productivity Puzzle? 67
11. Productivity through people – supporting best practice in SMEs By Tony Danker, Be the Business 68 Can Good Work Solve the Productivity Puzzle?
Productivity – the cumulative output growth will come and found that of UK workers per hour – is the critical although 45% of growth will come indicator of how competitive we are from leading firms pushing the frontier, as a nation and the surest way of the majority of growth will be from delivering sustained wage growth. In firms adopting existing best practices. the decade after the financial crisis, the UK’s labour productivity has remained Britain has the potential to build the stubbornly flat whilst competing capabilities of modern economic economies have seen theirs return to success by embracing and leading growth. the shift to managerial excellence and high-quality jobs – unlocking The challenge to improve the UK’s the potential of the exceptional competitiveness is not new; however, human talent we have here. However, the methods of most effectively for a number of reasons, this is not addressing the problem have changed. happening. In spite of a growing body Twenty years ago competition policy, of evidence that better management planning and market regulation were practices drive firm-level productivity seen as the key levers to pull to grow gains and that implementation UK productivity. Two decades on, costs are relatively low, UK firms technology is reshaping the traditional still spend insufficient time and structures of the economy; however, resources investing in human capital the leadership of firms remains the and leadership. UK SMEs are not main arbiter of success and failure. maximising their opportunities to Strong leaders are confident and grow. Indeed, it has proven a source of ambitious even in an economic climate frustration amongst some policymakers of uncertainty. that their efforts in developing interventions to support SMEs do not appear to hit the mark and the take up Management practices amongst SMEs remains stubbornly low.
A robust evidence base demonstrates the link between management SMEs practices and UK productivity. Researchers have estimated that about A number of reasons are often cited a quarter of the UK’s productivity as to why this is the case: the firms gap with the US could be down to that fall under the banner of ‘SME’ poor management. Deficiencies in UK are so diverse as to make it difficult, if management skills have also been not impossible, to design programmes shown to be a key driver of inter-firm that are relevant to any more than productivity gaps. Further, McKinsey a small subset of their number. The & Co. conducted a macroeconomic interventions themselves can often analysis of from where future economic be viewed by SMEs as being overly 11. Productivity through people – supporting best practice in SMEs 69 bureaucratic or too slow in delivering ensure a well-functioning marketplace. benefits. There is often a general A well-structured intervention from sense that policymakers do not fully government would provide incentives, understand SMEs or the realities of information and investment to running a business. stimulate the right type of demand amongst SMEs and incentivise an Failure to connect with a SME target increase in the supply of quality audience is a phenomenon not limited management development providers. to the public sector. The business-to- business market for SME services and interventions has its own particular Be the Business failings in this regard. This is primarily around asymmetry of information The inception of Be the Business, a and an inability for SME owners government-supported and industry- and managers to identify from the led initiative, can be viewed at least in multitude of providers which services part as a means of addressing these will actually prove to be of most benefit market failures. Be the Business, as part for their companies. High-quality of its remit to improve UK productivity, service providers can often be obscured is working to design and deliver focused by the flood of offerings in the interventions that enhance leadership marketplace. The nature of this market capacity and productivity within UK is that there is a very real downside for SMEs. We believe this will serve a a company that receives poor-quality number of purposes. By taking a test service, and so a business owner will and learn approach, we can identify often prefer not to procure any service which interventions are the most rather than risk a negative business effective in driving firm productivity, impact. and by communicating these benefits to SMEs we will increase demand. As a result, on the supply side, the By identifying what constitutes best largest professional services companies practice in the design and delivery and many business schools prefer to of management development focus on blue chip companies that are programmes, and disseminating this easier to reach and retain as a client information to the marketplace, we base, thereby reducing the availability also hope to indirectly raise standards of best in class services to smaller amongst suppliers. businesses. On the demand side, where firm-level returns to training investment Our focus on the building of leadership are either unknown, uncertain or are capacity amongst SMEs and our outweighed by downside risk, some evaluation processes have helped ingenuity is required to inspire demand to surface a number of interesting amongst SMEs. In this scenario, examples of where the Good Work government intervention is needed to agenda and productivity increases go 70 Can Good Work Solve the Productivity Puzzle?
hand-in-hand. One of our programmes, Case studies Productivity through People, is a unique SME education programme that In one case, Chris Blade, managing focuses on enhancing management director at Cumbria Crystal, which is capabilities within firms. The 12-month the last producer of completely hand- programme, run in partnership with the blown and hand-cut crystal in the UK, universities of Aston, Bath, Lancaster challenged his employees to deliver and Strathclyde, blends practical a 1% performance improvement to learning from peers and industry each area of the business each month. leaders with classroom sessions. This challenge spurred a series of Participants engage in academic-led innovative ideas from employees in masterclasses; attend site visits to suggesting operational efficiencies. some of the UK’s most productive The success led to his business making businesses; and receive mutual support savings of £30,000 per annum and and advice from a close-knit group of winning contracts with global brands. peers. Interestingly, a core focus of A real-world productivity success story the curriculum is around how leaders – and one that the employees were an can engage their teams to deliver integral part of. productivity boosts to their business. Damini ‘Dee’ Sharma is managing This is not about reinventing the wheel, director of the OM Group, a family- but about having impact. Managers run construction consultancy based that have made improvements to in Coventry. OM Group was one their company productivity through of a number of SMEs impacted by participating in this programme the collapse of Carillion Group and often cite the introduction of, in some swift action was needed to help the regards, fairly standard aspects of company recover. Dee decided to management and leadership practice prioritise productivity and took part – such as regular performance reviews in the Productivity through People and target setting – as having a programme facilitated by Be the transformative effect on their business. Business and Aston Business School. Opening a process of consultation or Dee invested in the development plans dialogue with employees to get their of her employees and upgraded her views on how productivity could be operations to use cloud technology improved has proved to be a win-win. when completing site evaluations. This Employees feel more involved and reduced journey time for employees valued, and managers do not feel and allowed them to focus on the that they are solely responsible for engaging value-added components of improving company productivity. The their role rather than the paperwork. bottom line benefits have also been From a productivity perspective it significant. enabled employees to make 100% more client visits each week – a huge 11. Productivity through people – supporting best practice in SMEs 71 gain. The buy in and support from her employees. We are conducting robust employees in the adoption of digital evaluations of the Productivity through technology was vital for the successful People programmes which we expect to execution of her business strategy. confirm our hypothesis that engaging employees leads to better quality work The evidence coming back from and better productivity outcomes the Productivity through People and that good work and productivity programmes being run with SMEs gains can be mutually reinforcing. We is that positively engaging with expect to see emerging findings on employees and making them part of management practice improvements at the businesses’ productivity journey not the level of the individual manager in only enhances employees’ experience early 2020, with company productivity at work and job satisfaction. It also increases and other firm-level outcomes enables strong productivity growth and expected in the middle of 2021. We bottom line gains. The case studies look forward to bringing these findings referenced are typical in their delivery to the debate about good work and of performance boosts by engaging productivity. 72 Can Good Work Solve the Productivity Puzzle?
12. Dead-end relationship? Exploring the link between productivity and workers’ living standards By Matt Whittaker, Resolution Foundation 12. Dead-end relationship? Exploring the link between productivity and workers’ living standards. 73
Introduction the decoupling story is a neat one: directly linking the slowdown in median Across a number of advanced pay growth recorded across a range economies, there is evidence of a of advanced economies over recent ‘decoupling’ of productivity growth and decades to the various points at which median pay growth, raising questions the gains from growth can escape the about how the gains from economic grasp of the typical employee. That growth are shared. However, although phenomenon is said to derive from there is some evidence of decoupling the rise of globalisation, technological in the UK since the 1990s, productivity progress and diminished worker power growth does still flow through to pay – forces that have been at play across growth in this country. The bad news is advanced economies. that the former has been in very short supply over the last decade. This story appears to be a good account of trends in the US, for example, where Median weekly pay in the UK stood a clear decoupling of productivity and at £439 in 2018, still 1.8% lower than pay emerges in the 1970s. But the the £447 that had been recorded in story in the UK is less clear. There is a 2004 (after adjusting for inflation). The decoupling, but it starts later (in the depth and duration of the pay squeeze 1990s) and is of a much smaller scale. endured in this period is unprecedented And there are different drivers than in modern times, and stands in direct elsewhere. For example, a falling labour contrast to growth of 20.9% over the share is a big part of the story in some preceding 14 years. Of course, it owes countries, but not here. The rest of this much to the financial crisis of 2008, with article explores the factors that have the UK enduring a very sharp drop in driven the decoupling story in the UK, wages in the immediate aftermath. But with different factors at work in different the subsequent pay recovery has been periods. sluggish too and, relative to historical norms, pay growth was already slowing before the crisis hit.
One oft-cited possibility is the presence of a ‘decoupling’ between productivity growth and median pay growth that is affecting all advanced economies. That is, the notion that the gains from economic growth no longer flow smoothly through to the pockets of employees in the middle of the pay distribution in the way they did over the post-WWII decades. At first glance, 74 Can Good Work Solve the Productivity Puzzle?
Understanding the labour share It is worth noting that the share of overall labour compensation distributed While the labour share did fall in the as pay, relative to the share accounted UK over the course of the 1980s it by employer National Insurance subsequently rebounded, marking the Contributions and the share taken up UK out as something of an international by employer pension contributions, outlier. Overall, a modest 2.6% reduction has declined over time – in particular, in the UK’s labour share between 1980 in the period between 1990 and 2008, and 2018 compares with falls of 7.6% accounting for one-third of the 24 in the US, 11.5% in Germany, 12.1% in percentage point decoupling of median France, 16.9% in Australia and 20.5% in pay from productivity. As such, although Japan. We can draw the conclusion that the UK’s labour share of income has UK decoupling has not been the product bucked the international trend, the wage of workers securing a shrinking share of share of income trend has more closely the pie. matched the norm.
This exceptionalism is worth digging into. It does not appear to be the Devaluation effects product of any shift in the UK’s industrial mix or of outlier performance The divergence we have seen between in any one sector, but rather the the consumer and producer deflator presence of economy-wide factors. A has also been a contributing factor. The tightening labour market – with the producer deflator is used to inflation- 16-64 age employment rate rising adjust national output (capturing the from 69.9% in 1996 to 72.7% in 2002 change in prices of all domestically- – is likely to have played a key role, by produced goods, including those strengthening the bargaining power of that are sold and consumed abroad); workers in this period. The introduction while the consumer deflator is used and development of the National to inflation-adjust pay (capturing the Minimum Wage probably also played a change in prices paid by households part, directing an increasing share of the when doing their weekly shop, including income pie to workers. those goods and services that are imported from elsewhere).
The large sterling devaluation that followed the financial crisis (associated with the UK’s financial sector reliance), and the more modest one that followed the EU referendum, served to lift the consumer deflator significantly above the producer deflator. This produced a terms of trade drag for workers in the 12. Dead-end relationship? Exploring the link between productivity and workers’ living standards. 75
UK that has contributed to the widening Restarting the productivity of the wedge between productivity growth engine and pay. Indeed, that’s really the only source of decoupling in the last decade. What can we draw from all of this? It is It is worth noting that over the longer hard to look at the UK experience and term this deflator effect has pulled in conclude that the feed through from different directions, actually pushing productivity growth to pay growth is against decoupling when we take the fundamentally ‘broken’. There is good 1980-2018 period as a whole. It is not a reason for being concerned about structural inevitability. the link between median pay growth and productivity growth in the UK – just not necessarily for the reasons The complex story of wage often assumed. It is the collapse of inequality productivity growth rather than any breakdown in the relationship between By far the biggest driver of longer wages and productivity that explains the term UK decoupling has instead been pay squeeze of the last decade. the change in the distribution of pay observed over the period. The difference Therefore, productivity growth remains observed in mean and median pay centrally important to pay prospects trends accounts for 95% of the overall in the UK. The terms of trade drag 24-percentage point wedge recorded associated with the divergence of between 1980 and 2018. But this is producer and consumer deflators has not a story of ever-widening wage certainly played a key role in holding inequality. Growth across the earnings back real-terms wage growth since distribution over this period has actually the financial crisis, but the impact is been U-shaped: pay has increased the slight relative to the role played by the most at the top, but minimum wage slowdown in productivity growth itself. policies have also supported solid growth at the bottom – it is wages in Of course, disentangling productivity the second quartile that have grown the and decoupling is complex. The post- least. crisis sterling devaluation was itself a reflection of lower long-run productivity growth expectations in the UK. This caused pay growth to more quickly adjust to the new reality than output growth did (resulting in the observed decoupling). Were productivity growth to have been stronger than it was in the post-crisis decade then we might not have recorded the same remarkable growth in employment 76 Can Good Work Solve the Productivity Puzzle?
(indeed, we might well argue that the The robots have not arrived to take our post-crisis pay moderation associated jobs yet – indeed, our economy could with sterling depreciation directly fed do with a few more of them – but new through into higher employment and technologies will alter the way we work lower productivity growth). There is over the coming years. That will bring no guarantee that a faster-growing disruption that, in the short term at economy would result in the same least, will disadvantage some workers balance between labour and capital more than others. And it will require us and between wages and non-wage to place a growing emphasis on worker compensation for example. mobility (in terms of jobs and in terms of location), skills (with a growing need for That said, the conclusion is clear: retraining options over the life course), namely that restarting wage growth and confidence (supporting risk taking and supporting household living standards opportunism) and power (harnessing rests above all else on restoring new technology to bring workers productivity growth to its former levels together in innovative new ways). That (or vice versa, potentially). All boats can won’t happen by accident, but it has the still be lifted, but for this to happen it’s potential to bring significant reward. imperative that the tide starts rising again. Given the good news about the relative ongoing strength of the relationship In part that means reversing the between productivity growth and business investment picture, with recent pay in the UK, the hope must be that weakness explaining around two-fifths the prioritisation of a restoration of of the overall under-performance improvements in output per hour – via a of productivity growth in the post- strategy that places workers at its heart crisis decade. Moving beyond today’s – has the power to deliver direct and uncertain political and economic obvious benefits to all in society. backdrop would certainly help (business investment has fallen in five of the last Adapted from an essay published by six quarters, with firms understandably the Resolution Foundation, January delaying decisions until such time as the 2020. For the full essay, including all Brexit outlook clears). However, the need data tables and sources, please visit to improve the way in which firms adopt www.resolutionfoundation.org innovative technologies and working practices is probably more structural in nature. On that front, it’s important that any focus on boosting productivity recognises the extent to which the world of work is changing. Can Good Work Solve the Productivity Puzzle? 77
13. Can improving productivity help our in-work poverty problem? By Louise Woodruff, Joseph Rowntree Foundation 78 Can Good Work Solve the Productivity Puzzle?
It’s not right that many workers in the This week, Sue, Sonia and John are UK find themselves locked in poverty. amongst the 4 million people heading Business practices are part of the out to work in the UK’s private sector problem, but they can also be part of firms and in public sector roles whilst the solution to in-work poverty and caught in the grip of poverty. The loosening its grip so that workers can proportion of working families that build decent lives for themselves and are in poverty has risen over the their families. last 20 years – an unacceptable situation, and a trend that now sees the majority of people of working age The UK’s in-work poverty experiencing poverty coming from a problem working household. Seventy per cent of children2 pulled into poverty come from Sue1 is a care assistant providing households where at least one adult domiciliary care to older people in her works. Foodbank use in the Trussell Trust area in a coastal town in the South of Network has risen by 73% over five England. She works for an agency on the years3 and around one in six foodbank National Living Wage, receives her shift users are in work4. patterns week to week and often works unpaid to spend more time with her It’s not right that so many working vulnerable clients. She is a single mum families are locked in poverty. Problems5 of two primary school children and often with jobs, housing and social security struggles to pay her rent on time. benefits mean many UK workers are struggling on incomes that just do not John works on a zero-hours contract, cover their living costs, and severely driving all over the North West delivering restrict their options and opportunities. parcels for a major retailer – he’s often Reducing housing costs and increasing tired and has an unpredictable income, support via social security benefits play which makes it difficult to budget and to a key role in addressing in-work poverty keep on top of his claims for Universal at a household level but we should not Credit. He had to use a foodbank in the let the labour market off the hook: the past and feels ashamed that he could UK needs more better paid jobs with not feed his family in those weeks. good conditions, progression, genuine flexibility and more hours to help loosen Sonia lives in social housing in London. poverty’s grip. She is a cleaner with two pre-school children. She often works split shifts to manage childcare with her partner and regularly falls asleep on the bus on the way home to her outer London borough. 13. Can improving productivity help our in-work poverty problem? 79
The characteristics of low-wage sectors complain about having to do work the same basic training again and again every time they change employer and Although there are employees in poverty I wonder how productive that can be: in all sectors, these households are each day across the UK employers are concentrated in the large low-wage spending money on training employees sectors. How these sectors of the in skills they already have but happened so-called everyday economy behave to gain at another employer. What if – their business models, sustainability that money was invested more wisely and productivity levels – really matters in developing new skills or retraining for the millions of workers on low pay for a digital working environment; or if and in poverty. Retail and hospitality we made skills recognition much more are especially important6. They are portable between employers11? It is also large employment sectors with a high well documented that many low-paid incidence of low pay. A little under employees remain stuck on low pay half of workers in retail (46%) and just and flatter structures in many firms short of three-fifths (59%) of workers make pay progression challenging12. in hospitality are on low pay. Around a For many employees, lack of genuine third of workers in poverty work in these flexibility in better paid roles just makes two sectors alone7. Social care and the juggling caring and work too difficult; facilities management sector also face a problem that particularly affects the similar challenges. large number of low-paid mothers in the workforce13. Despite the introduction and rising value of the minimum wage, low-income The government has acknowledged the families have seen slower growth in problem of one-side flexibility14 where earnings than the average family for risk is shifted to the employee who much of the last 20 years8. At least can have shifts cancelled or changed some of this has happened because at their own expense. These working people can’t find jobs that provide them practices are particularly damaging to with as many hours of work as they families on low incomes: making it very would like. A fifth of low-paid men and difficult to plan ahead and being left women say they would like to work more out of pocket for childcare and transport hours than they can find, around three costs. Businesses still operating these times the rate for non-low-paid workers9. business models are clearly out of step with public opinion. Recent JRF polling15 UK firms invest less10 in their lower of low-income voters has shown that paid staff than those in higher-paid 79% voters supported policies to roles and this training can often focus guarantee hours at work each week, on basic induction tasks rather than 62% supported more time flexibility being continuous and linked to pay for workers and 49% supported more progression. Some workers in low-paid advance notice of hours. 80 Can Good Work Solve the Productivity Puzzle?
There are of course, many great employers The discussion on improving productivity in the traditionally low-wage sectors, and job quality sometimes feels such as the employers who pay the disconnected from the real lives of higher voluntary Living Wage16 or sign up people on low incomes. Being treated for Living Hours17; who invest heavily in well at work, paid a Real Living Wage, training and manage their businesses well given opportunities to progress and to to give good notice on shifts and hours; work the right number of hours should or who are developing better progression be fundamental aspects of decency routes for part-time employees. Business at work and should not be seen as a in the Community has developed a toolkit special prize for delivering productivity – Good Work for All – and has some great gains. However, even if our primary case studies18. The work of the Good Jobs focus is raising productivity then we still Institute19 in the US shows how businesses need to focus on raising job quality. We in low-margin sectors can operate in a way need to make sure that interventions that can still deliver good jobs. So what we design to push up productivity will needs to happen for more employers to help create an economy that works adopt these business practices? for everyone, including low-income households. To raise productivity and drive up pay, productivity strategies Will raising productivity help? for low-wage sectors such as retail and hospitality should focus on increasing Low-wage sectors are a concern not just the proportion of workers in on-the- for poverty but also for our economy. job training; improving management German, French and Dutch workers in practices; increasing the percentage these sectors produce more in four days of workers using ICT; and reducing the than British workers do in five. The UK’s share of temporary workers22. productivity gap with its competitors in low-wage sectors is not due to a lack of Can a business or sector really make capital investment or workers’ formal those productivity gains without skills but how well firms use workers in thinking about the lives of their these sectors. But raising productivity in employees – who are, after all, key low-wage sectors and in low-productivity stakeholders? Poverty is estimated to firms is not guaranteed to drive up pay cost the public purse around £78 billion23 in these sectors and firms. During the a year and all businesses, like other post-2008 recovery a 10% increase in firm taxpayers, have to pay part of this cost. productivity is estimated to have increased Businesses should also be concerned wages by just 0.05%20. Recent research about the impact that poverty has on on pay setting shows that firms are more individual employee performance24. How concerned by sector norms; attracting and can you give the best customer service retaining labour and the National Living or make key performance indicators Wage rather than linking pay to driving or or support vulnerable clients brilliantly responding to productivity gains21. if you are worrying about money or 13. Can improving productivity help our in-work poverty problem? 81 whether you will eat just toast that night Arguably, the public debate on low pay to make sure your children get a decent and working conditions might have meal? Employers need to start close to by-passed the economic case-making home for solutions – helping to address on productivity somewhat. Politicians the issues of poverty and unfulfilled across different UK parties are responding potential in their workforce and/or in directly to the needs of low-income their supply chain. working households, particularly on the minimum wage and on other aspects of Recent research25 from Strathclyde good work. The level of the National Living Business School for JRF has explored the Wage became an electoral issue with both ways that businesses interact with the the two main political parties proposing issue of in-work poverty. These findings, considerable increases27. together with concurrent work from the Social Market Foundation26 on pay Ultimately though, designing business progression and the role of corporate practice and policy solutions to decision-making, mean we have a much addressing good work and productivity better understanding of the key levers must connect with the everyday lives for influencing employer behaviour of people working on a low income change. Good work strategies should and what matters to them most. be built into business advice services That’s why at JRF we are also working and help start-ups ‘design in’ good alongside people with experience work practice from their inception. We of in-work28 poverty to co-design can also harness investor pressure to solutions to improving work for low- encourage transparency of company income employees. The UK urgently reporting on pay progression and needs to solve the problems of lagging training. productivity and in-work poverty. There is a real opportunity to drive improvements in both if good jobs become the norm. 82 Can Good Work Solve the Productivity Puzzle?
14. Can prioritising worker health help close the North’s productivity gap? By Anna Round, Institute for Public Policy Research North 14. Can prioritising worker health help close the North’s productivity gap? 83
The idea that healthy workers are more Will this approach to economic outputs productive holds an intuitive appeal for be accompanied by a greater focus on anyone who has struggled through a the social inputs to prosperity, including day’s work, paid or unpaid, with a heavy health? The link between economic cold or a headache. Large-scale studies deprivation and poor health is well- confirm that: established6, but interest is growing in the ‘vicious circle’ by which poor health in turn makes it harder to create wealth … the determinants of in a place. A recent study7 found rates a country’s economic of productivity below the UK average in performance include the health the North of England are due in part to status of its population. That is, poorer levels of health. Unemployment there is a two-way relationship and limited employment prospects between health status and associated with ill-health and long-term socioeconomic factors. People conditions explain around 30% of the in good health are more productivity gap between the North productive …1 and the rest of England. Investment to reduce this disparity could generate over £13 billion in gross value added8. Yet in the proliferating policy discussion of how to address the UK’s ‘productivity This is especially important for areas problem’, the health of workers is a such as the North East, where poor relatively recent theme. Developments outcomes on a range of health such as the 2018 Good Work Plan2 signal indicators are closely related to a new and welcome policy approach, historically high levels of deprivation and recognising the role of health as a the impacts of economic restructuring9. dimension of work quality. Life expectancy at birth for both sexes is below the English average. But crucially, The idea that we should evaluate average healthy life expectancy at birth economies in terms of their human is the poorest in the UK – at around impacts is increasingly popular. 60.4 for women and 59.5 for men10, Conventional production indicators, and several years lower than the State notably GDP, provide an important Pension Age11. As well as contributing to but narrow picture, failing to capture economic inactivity12, this trend almost how an economy is experienced by certainly means that some people who the people who live in it3. Proposals stay in work, for economic or personal for alternatives that define success by reasons, will perform less effectively increases in wellbeing and sustainability because of poor health. as well as growth are gaining traction4, for example in 2019 New Zealand’s first The argument for investment in health Wellbeing Budget was published5. as an economic asset as well as a social one is clear: 84 Can Good Work Solve the Productivity Puzzle?
… we need to reposition health maintain it16. Informal understandings as one of the primary assets of tend to assume that health is shaped our nation, contributing to both primarily by the individual exercise of the economy and happiness13. responsibility, discipline and will, with genetic factors also playing a major role17. Experts argue, however, that However, the nature of that investment health creation is complex, arising – who should make it, where it should through multiple interactions with be targeted and how its benefits can be places, experiences and opportunities – measured – is complex. In the first place, including work itself. Individual actions economic gains are only one of a host of and choices to improve health take place reasons for investing in health services in social and economic contexts, and are and the public health measures – the enabled or inhibited by these. ‘compelling case’ for intervention also includes the intrinsic value of health, Many of those contexts can be the role of health in social justice and influenced profoundly by government potential savings in health service costs14. policy. State investment that improves the health and wellbeing of populations In addition, the productivity impacts will also improve their opportunities of health vary by condition, severity for economic participation (subject, and context, as well as by type of job inevitably, to the structures of the local and sector. And while absenteeism and economy and labour market). A second withdrawal from the labour market are key context is the workplace itself; fairly straightforward categories, it is after all, this is where working adults much harder to identify the effect on spend a large proportion of their time. productivity of ‘presenteeism’ or working Black18 identified a strong relationship whilst unwell – although this may be between firm-level health interventions substantial15. Better evidence on these and workplace practices, and economic issues is important, but they need to be outcomes including productivity. Yet treated with care. Recent years have seen employer approaches to investment great gains in enabling work for people in the health of their workers varies with long-term health conditions and in considerably. Multiple examples of good ending the stigma associated with certain practice19 exist alongside uncertainty illnesses. In stressing the importance of about how to create, prioritise and worker health in general for productivity, measure employee wellbeing20. we must make sure that individual employees with health issues are not seen The changing nature of work, with as a potential cost to employers. new patterns of employment and relationships between employers and The way we talk about health is often employees, may have consequences for at odds with expert knowledge of health at work and for the effectiveness what works to improve, create and of employer investment. While more 14. Can prioritising worker health help close the North’s productivity gap? 85 employers recognise the value, social Central and local government are and economic, of comprehensive themselves major employers and have changes, work insecurity is an increasing the ‘hard and soft’ powers to manage concern. Not only could precarious work the integration needed to embed make engagement with workplace health in different contexts, including health more challenging, it may itself the workplace. National examples of have negative impacts for health21 and, good practice, particularly in relation to in turn, for productivity. mental health, already exist24.
This could be a particular issue for Many Local and Combined Authorities certain ‘low-wage’ sectors, as well as for have embraced the Good Work areas and industries that have seen a agenda using existing powers and the relatively large increase in insecure work. opportunities of devolution to improve The proportion of workers on a ‘zero- work quality and bring together partners hours contract’ fell in the North East who can both drive this agenda and between the second quarter of 2017 benefit from it25. In the North East, the and the same period in 201822 but there Good Work Pledge by the new North is evidence that this region has seen of Tyne Combined Authority includes increases above the UK average in other a recognition that good quality work forms of non-permanent work, including supports both productivity and health26. temporary jobs, agency work and self- employment23. Once embedded, evaluated and widely discussed, such initiatives can help to As well as supporting wider calls for make the case for the ‘robust model for investment in health creation and measuring and reporting on the benefits prevention of illness, policy responses of employer investments in health and to improving health for productivity wellbeing’ envisaged by Black27. In time should focus on improving information they will help to reframe health at work and resources for key stakeholders who as a project of co-creation by employers, hold the powers to spearhead change. employees and government. 86 Can Good Work Solve the Productivity Puzzle?
15. What we know – and what we don’t – about flexible working and productivity By Emma Stewart, Timewise 15. What we know – and what we don’t – about flexible working and productivity. 87
Introduction Today, flexible working is a strategic goal for forward-looking organisations and In the 15 years since the Timewise team a legitimate aspiration for employees began focusing on flexible working, (and not just those with children). When there’s been a huge evolution in both you look at the business case2 and the its perceived value and the attention it impact of working flexibly on employee has received. Once a hushed-up perk for wellbeing and engagement3, it’s easy to a small number of maternity returners, see why. with few champions, flexible working is now a core ingredient of workplace strategy. Indeed, it was a central pillar The positive impact of two-way of the recommendations of Matthew flexibility Taylor’s landmark review of modern working practices1. Genuine, two-way flexible working, which delivers for employers and The review spearheaded a growing employees alike, has been shown to understanding into the social and boost talent attraction4 and retention5. economic value of Good Work; that It helps drive inclusion and diversity6, is, work that benefits individuals and and supports the progression to senior society as much as businesses. Taylor level of key groups, including women. was clear about the role that flexible Having less people in the office at the working has to play in making work same time can also lead to savings good: on office space and other business overheads.
‘The Review believes that Flexible working also delivers better genuine flexibility, whereby work-life balance7, with the knock- individuals and employers on effect of supporting mental and are able to agree terms and physical health and improving wellbeing. conditions that suit them both Government figures8 have shown that … is both the key strength in 2017–2018, 57% of all sick days of the UK labour market, were due to work-related stress, anxiety and also a core component or depression; tackling these through of fair and decent work. better flexible working is clearly good for As a society, we should be everyone involved. bolder in designing flexible jobs that allow people to remain and progress in the labour market as their circumstances change.’ 88 Can Good Work Solve the Productivity Puzzle?
The link between flexible Rising interest in the four-day working and productivity working week
So what about productivity? Does the These assumptions have certainly ability to work flexibly make you more contributed to increased interest in productive? the concept of the four-day working week. In the last year there has been There are some figures to suggest that a swathe of articles about companies this is the case. A 2014 survey by BT9 who have switched their employees found that the productivity of flexible onto this pattern, without any dip in workers increased by 30%. Similarly, a productivity or loss of pay. A key early YouGov10 survey from 2015 suggested example of this, Perpetual Guardian in that 30% of office workers felt their New Zealand12, ran a pilot that they say productivity increased when they revealed a 20% increase in productivity. worked remotely, and in a study of A number of companies in the UK have flexible workers undertaken by Cranfield also followed suit13. University11, over 90% of managers said the quantity and quality of work improved or stayed the same. Why this solution is more complex than it seems Additionally, it is simple common sense to assume that if you’re working fewer Does this mean we can all just move to a days a week, you are likely to be more four-day week for the same money and engaged on those days; that if your watch our productivity soar? If only it job fits well with your life, you’re likely were that easy. to bring more energy to it; that working from home, with fewer interruptions, can As I’ve explained in detail elsewhere14, increase your output; and that if you introducing a four-day working week hang on to experienced team members, isn’t just a schedule tweak. Most of who know what they’re doing, your the examples we’re hearing about team as a whole will deliver more, better are coming from one end of the and more efficiently. employment market – office-based roles within knowledge and creative industries, such as PR. In frontline and shift-based sectors it is far more complicated to introduce – or only possible to do so at a prohibitively high cost to the business. And when talent isn’t seen as a high commodity the business case for investment is hard to make. 15. What we know – and what we don’t – about flexible working and productivity. 89
Furthermore, in a shift-based support different working patterns environment, the concept of a four-day and increasing management working week does not really fly, as capability to deliver them. employees are not working a standard five-day week. What most of them really As with the four-day working want is more control and predictability week, this is more straightforward over when and how much they work, in office-based knowledge and to achieve what we at Timewise term creative sectors than it is in shift ‘shift-life balance’. With over five million or service-based ones in sectors people working in permanent shift- such as health and social care, based roles, it is imperative that we retail, hospitality, construction and explore how we can achieve this for the teaching. These are industries that benefit of workers and the economy. face complex operational as well as cultural constraints to making Indeed, as Lord Skidelsky noted in his two-way flexibility work. But they Labour Party-commissioned report15 are industries that employ millions exploring the feasibility of legislation of frontline workers who service to limit hours of work ‘Capping working our economy. Some of whom need hours nationwide … is not realistic or more control and security over their even desirable, because any cap needs working patterns, and others more to be adapted to the needs of different opportunities to progress into better sectors’. paid part-time work to fit with caring or health reasons. So if the four-day week isn’t the answer to increasing productivity on a large We need to test and catalyse new scale, what is? I would argue that there approaches to designing two- are two big steps we need to take to way flexibility in these sectors, tackle this issue in a robust, sustainable particularly as many are struggling way: with skills shortages. But we face both a capability and a capacity gap 1. More investment into designing in understanding how to redesign jobs that deliver two-way work, rather than invest in another flexibility skills training programme as a way to maximise performance. To drive If we agree in principle that two-way change we will need government- flexibility supports productivity, we level investment. We invest in need to make it more widespread. technical innovation to support That involves understanding economic growth in this country; what kinds of flexibility are most it’s time we invested in job design appropriate for each role or sector, innovation too. changing workplace cultures to 90 Can Good Work Solve the Productivity Puzzle?
2. Proper research into the impact of We’re tackling flexible working flexible working on productivity R&D – but we need more support
Once we have more models of At Timewise, we’re already on this flexible working in place, across a journey. We have led a number of wider range of different sectors research projects exploring innovative and role types, we will be in a far flexible options in complex sectors such better position to research the as social care16, nursing17, teaching18 and link between flexible working and retail19. Right now, we’re piloting flexible productivity. The figures I quoted working in the construction industry and earlier are not sufficiently up-to-date investigating the role that flexibility can or wide-ranging; we need to do more play in supporting older workers, through to prove the link, particularly at a the work of our Innovation Unit. sectoral level. But we are just one organisation; and By doing so, we’ll create a virtuous although we are supported in this work circle in which more organisations by a number of like-minded partners, are prepared to move to a more there’s a limit to what we can achieve. flexible approach, which will boost To really drive change at scale, we their productivity, which will in turn need more social partnerships between encourage others to follow their lead. business sector bodies and agents for change, backed by government and industry investment.
If we really want to take productivity to the next level, whilst delivering a happier, healthier workforce, that’s the first step – and we need to start now. Can Good Work Solve the Productivity Puzzle? 91
16. Finding our edge: engaging employers in the movement to make work better By Paul Devoy, Investors in People 92 Can Good Work Solve the Productivity Puzzle?
Introduction analysis will help to build the evidence base, yet in the meantime, there is a When you’re faced with a puzzle, huge body of research and data that it is good to have a clear strategy. confirms the evident link between the Something feasible and practical. Like two. finding the edge pieces, creating a clear structure, and then filling in the gaps to Intuitively, we know and agree that build up a bigger picture. when we treat people well, they respond in kind. Conversely, when we treat them Improving productivity is a puzzle that’s badly, they won’t go the extra mile. Few, been around for quite some time in if any would dispute that. Yet in an age the UK. In this respect, we’ve lost our of job uncertainty, growing competition edge. We’re lagging behind other large and rising workplace stress and anxiety, economies and, if our current rates of one in three workers report being improvement continue, we’ll be around unhappy at work. Some 45% of people 30% less productive as individuals than were looking to move jobs in 2019, people in the US and Germany by 2025. and of the top three reasons given for moving on, not feeling valued and work- related stress each scored 16%. Better The backdrop pay was also an issue, yet interestingly a ‘good work-life balance’ and a ‘good Investors in People has been around for team’ scored higher than pay as things quite some time. We’ve seen many UK that people liked most about their work initiatives come and go, well-meaning (see Figure 10)2. interventions that have had varying degrees of success in terms of boosting As well as being the right thing to do, working conditions and productivity. providing good work is an issue for the We’ve also learned and seen first-hand bottom line as well. The average cost what genuinely makes a difference. of replacing a skilled worker is typically 150% of their salary, and firms with Look at employee engagement engaged employees enjoy around scores by way of a classic example – 40% less turnover of staff – another organisations in the highest scoring dimension of the productivity puzzle. quartile have been shown to be 22% more profitable on average than those So we should be bold and push the in the bottom quartile and have 21% agenda forward, making a powerful higher productivity1. case for good, fair work – because as businesses and individuals, and as a There are many factors at play, and country, we cannot afford not to. so it is not always possible to isolate precisely the impact of good work on organisational performance. More 16. Finding our edge: engaging employers in the movement to make work better. 93
Figure 10: Investors in People job exodus trends3.
37% 34%
34% Top three things workers Top three reasons 30% like most about their why people are current jobs looking for work 26%
21% Work-life balance I think I can get more money elsewhere
A good team I think I will enjoy the work elsewhere
The pay I don’t feel that my skills and talents are valued in my current job
The campaign to create a mindset people to respond on an emotional level, not just statistical. We want a There is a heads and hearts argument movement for change. to be made now. We need an engaging campaign that is supported by the We know that sustained campaigns are evidence we already have and that effective. There has been significant presents a straightforward call-to-action, progress on diversity in the workplace, with a message communicated in such for example, and most organisations a way that people can engage with it are much more aware of their easily and readily. environmental impact and how that plays out with consumers. Behaviours If you say ‘five-a-day’ to someone, are changing as a result. there is every chance they will know you’re talking about fruit and veg. Over Now we need a five-a-day style time, that campaign has sunk into our campaign for getting through to subconsciousness and embedded itself employers and employees. This isn’t as a simple carrot (if you’ll excuse the solely about creating a mindset pun) for healthier eating. amongst employers, but creating a nationwide movement that demands Of course, there were the critics who good work, for good reasons. wanted to pick over the finer points and the scientific evidence behind it, but this campaign, with its clear call-to-action, Tools for sustainable continues to do its job well. improvement
We need a sustained campaign, with a To create sustainable change and compelling central message. We want improve productivity, we need to offer 94 Can Good Work Solve the Productivity Puzzle?
the right tools to all employers, not with their TV ads, just google the classic just the larger ones. These tools will Accrington Stanley ad – a simpler, more help them to act on the campaign in a compelling message you’d be hard way that adds value to their business pushed to find. or organisation. These tools should be proven, useful and easy to access. There are plenty of organisations and Community Interest Companies like This is about building a sustainable ours that understand the challenges model with practical tools and services of the productivity puzzle, along that add value and are viable and with numerous high-performing and affordable. visionary employers of all shapes and sizes. What they should not be is dependent on government funding. We have seen We have to come together as a group too many stop/start initiatives over the – our own version of the Milk Marketing years and it is vital that we move to an Board perhaps. A group that can kick-start independent, sustainable model. a concerted campaign with a powerful message that signposts employers and We already have some great tools at our their people to the tools available. disposal and we should broaden that offering as part of a fresh and focused We know that engagement strategies agenda. The high-value products, which definitely work – we’ve plenty of businesses are willing to pay for because evidence that it really is good to talk – of the value they add, should be used but let us create a sustainable approach to subsidise a range of more-affordable for sustainable results. and free-to-use services for smaller organisations with less resources. If we can encourage the latter to get started Sustainable improvement in on their journey, we will all benefit. practice
If you want to see sustainable Let’s do it, let’s make work better improvement in practice, take a close look at Sevenoaks District Council – a Do you remember the Milk Marketing public sector organisation that has Board? Run by producers, it oversaw shown a genius for staff engagement milk production and distribution for and is reaping the benefits. They are in more than 60 years, supporting product one of the hardest sectors to recruit for, development and promoting milk on with very limited resources, and yet they behalf of the entire dairy industry. At its consistently deliver the goods, achieving peak, it was a marketing tour-de-force. high levels of customer and staff If your age means you’re not familiar satisfaction alike. 16. Finding our edge: engaging employers in the movement to make work better. 95
Figure 11 Sevenoaks Council
Reduced base budget Performance Customer satisfaction Awards by 35% and headcount and productivity levels almost 80% all with access to Public Finance Innovation by 41% over 10 years up 43% and 35% their own coach Award Winner 2017 over same period Council of the Year 2017
Data compiled from discussions with Sevenoaks leadership team and Investors in People
When they first partnered with Investors And to those who ask, ‘Is it worth it, in People over 10 years ago, Sevenoaks won’t I be wasting money developing were looking for the right tool to help people for them just to get another job drive forward the way they managed elsewhere?’, the leaders at Sevenoaks people and the opportunities they are adamant: training and developing wanted to create for them. Today, they people are still the right things to do. maintain Platinum-level accreditation, Some people will always want to move inspiring others in our business on, and that’s OK, it’s just the reality of community and beyond. This incredible work. But they may never have joined in ‘family business’ is very proud of its the first place were it not for the culture people and invests significantly in their and behaviours that are nurtured here. happiness. The positive outcomes for the organisation and its customers are clear and measurable. 96 Can Good Work Solve the Productivity Puzzle?
17. Unlocking potential: ways of tapping into employees’ ideas to enhance productivity By Alan Felstead, Cardiff University; Duncan Gallie, University of Oxford; and Francis Green and Golo Henseke, University College London 17. Unlocking potential: ways of tapping into employees’ ideas to enhance productivity. 97
Few studies of productivity give the willingness and ability of employees employees’ perspective; instead, to come up with innovative ideas, most are either based on macro-level and hence contribute to increased compilations of different time series productivity. They included: data or employer data taken from plant-level management interviews and surveys, sometimes linked to indicators Three questions on the extent of official productivity. However, the to which innovation is built into Skills and Employment Survey 20171 jobs such as ‘developing new collected evidence on the role that or improved work processes, employees play in improving how they products or services’; work and what they produce, and the factors that encourage or discourage Two questions on the extent to them from coming up with these which personal suggestions and ideas. The decision to collect such initiatives taken on an individual data was made on the grounds that or group basis have led to those who do the job are likely to have ‘increases in the efficiency with a good insight about how to improve which work is carried out’; and the way they work and potentially increase the productivity of themselves Three questions on the extent and others. The results suggest that to which suggestions given by greater employee involvement is key to individuals, problem-solving unlocking the potential that employees groups and management have to improve the work processes they consultation meetings have use, the products they produce and/or ‘contributed to improvements the services they deliver. However, the being made to work processes, research also shows that this is where products or services’. management practices have taken a backward step in recent times, with employee involvement on the decline. For analytical purposes, these questions are summarised in a productivity- The research reported in this essay enhancing index that correlates makes two distinctive contributions2. positively and significantly with industry The first contribution provides new variations in ONS productivity data. This data on the ways in which employees provides external validity for our claim increase productivity through offering that these employee measures provide a ideas and suggestions about improving new, hitherto unexplored, perspective on work processes, products or services. productivity. These new insights come from eight questions asked of 2,882 employees In line with the predictions of employee- who took part in the survey. These driven innovation theorists, very few questions were designed to capture the respondents reported that they were 98 Can Good Work Solve the Productivity Puzzle?
not required to contribute to making who can’t do it’. A document control improvements. At the other end of manager working in central government the spectrum around half (47%) complained about the lack of employee of employees reported that it was involvement in decision-making and ‘essential’ for them to keep up-to-date suggested that ‘if management and apply new knowledge to their job would listen to me, we could improve and around a quarter (24%) reported antiquated processes and procedures’. that developing plans to put new ideas In a similar vein, a speech and language into practice were ‘essential’. Seven therapist working in the NHS yearned out of ten employees (71%) reported for a ‘return to strategic clinical taking the initiative more than once in management and a balanced approach the last year to improve how the work to clinical governance as opposed to was carried out and/or the products a target driven culture’ and suggested or services produced. However, nearly that ‘greater professional autonomy is two-thirds (62%) of employees were not needed’. able to make meaningful suggestions via problem-solving groups either Around half of respondents who offered because such groups did not exist or else suggestions about ways of improving employees’ views were estimated by productivity mentioned improvements respondents to have had no impact. It in the resources needed to do the job, is also noteworthy that employees were such as increased training, more staff relatively reticent about claiming to have and better tools and equipment. There made ‘a great deal’ of difference. were also many organisationally specific suggestions, such as increasing the frequency of window dressing in fashion Changes outlets; factoring in local knowledge when planning lorry routes in haulage Looking beyond current arrangements, businesses; cutting out unnecessary the Skills and Employment Survey 2017 data entry in back-office administration; also asked employees ‘what changes, if better inter-departmental working any, would make you personally more in architectural practices; and more productive in your current job?’ This was frequent and timely stock delivery in an open-ended question to which over supermarket retailing. half (58%) responded in the affirmative. The suggestions given were recorded verbatim. A third of these suggestions Employee involvement related to the way in which they were managed, such as the suggestion The second contribution of the research from a machine operator working for a is that it examines the most effective chemicals company of ‘being allowed ways of tapping into employees’ ideas to put more ideas forward rather about increasing productivity. We find than being told what to do by people that employee involvement exercised 17. Unlocking potential: ways of tapping into employees’ ideas to enhance productivity. 99 individually and/or collectively is contemplate requiring listed companies positively and significantly associated to have employee representatives on with employees’ capacity and company boards giving way to a softer willingness to offer productivity- recommendation that companies enhancing ideas. This finding is in consider ways of taking the workers’ line with theorists who emphasise views into account when making the positive role of collective voice3 board-level decisions5. Evidence as well as those who highlight the suggests that none of the UK’s top positive role that individual voice can 100 listed companies have followed play4. Furthermore, these features of the government’s recommendation work explain a quarter (24.5%) of the by appointing workers to the Board variation in the productivity-enhancing of Directors; yet, this runs counter to index. the types of change that our evidence has shown are needed to enhance However, despite the benefits of employee-driven innovation and its employee involvement, the time series potential to enhance productivity. data suggest that involvement has fallen in Britain over the last decade – task discretion has declined, involvement Training and learning in organisational decision-making has fallen and trade union influence over Our evidence also suggests that work organisation has weakened. There training and learning, which encourages has been, for example, a downward creative thinking, has a strong link to movement in all aspects of task innovation (and hence productivity) discretion with an eight percentage as does the presence of target setting point fall between 2006 and 2017 in and appraisals linked to pay and/or the proportion that reported having a training opportunities. These findings great deal of influence over how hard corroborate previous studies on the they work. This proportion of employees links that training and performance reporting a great deal of say in decisions monitoring have with productivity. that affect the way they carry out their Our research suggests that support work has fallen from 14% in 2006 to and development accounts for well 12% in 2017. There has also been a two- over a quarter (28%) of the variation percentage point fall in the proportion in the productivity-enhancing index. of employees who report that trade Performance monitoring explains just unions at their workplace have a fair under a fifth (19%) of the variation, and or great deal of influence over the way all of the factors considered here explain work is organised. in excess of half (55%).
In addition, the UK Government has However, since we only have one cross- failed to take a lead in reversing these sectional data point, the inferences we trends, with its initial willingness to make are based on associational not 100 Can Good Work Solve the Productivity Puzzle?
causal analysis. Another limitation to productivity in these sectors, it is unlikely our approach is that unlike other studies to trigger a general levelling up of we do not have a direct measure of productivity across the economy. On this productivity. Furthermore, the research basis, the House of Commons recently findings do not offer a policy panacea concluded that, ‘The government’s because there are macro- and micro- Industrial Strategy isn’t doing enough level drivers of productivity on which we for the “everyday economy”, in sectors do not have employee-level data. These such as retail and hospitality where drivers include investment in physical millions of Brits are employed’6 and and intangible capital, the level of spare where – according to our data – capacity, patterns of wage growth and around a third of ‘low productivity interest rates. enhancing jobs’ are located. To really drive productivity upwards, the current ‘picking sectors’ approach needs to Policy responses be complemented by a more general- purpose policy response of tapping into Nevertheless, our evidence suggests employees’ knowledge of the most that supporting a handful of innovative effective ways of boosting productivity and already productive sectors in so that improvements come from all the economy in order to raise the sectors and occupational levels. Based UK’s productivity will be insufficient on evidence presented in this essay a to the challenge. Although targeted more widespread campaign is therefore government investment, in particular needed to raise productivity, with high-profile sectors through, for increasing individual and collective example, sector deals, might raise employee voice at its core. Can Good Work Solve the Productivity Puzzle? 101
18. How can we ensure more workers drive and benefit from productivity gains? By Kate Bell, Trades Union Congress 102 Can Good Work Solve the Productivity Puzzle?
Introduction The drive for greater productivity through a sweated workforce during The world of work is changing, with new the Industrial Revolution led to the technologies offering opportunities for formation of the trade union movement productivity growth that should lead to and the demand for an eight-hour day, greater wealth, more fairly shared with and eventually a five-day week. The workers. rise of technologies allowing for faster management of transactions in the This change means that productivity will 1980s contributed to a model whereby increasingly rely on human ingenuity, labour was outsourced in increasingly with a rise in the value of intangible complex supply chains, both within goods such as intellectual property. the UK and across the world, with an emphasis on reducing labour costs. The But too much debate about how to implications of that are still playing realise these gains has assumed that out today – whether in the collapse of workers will be left behind. Robots outsourcing companies like Carillion with will take our jobs, and the little work the loss of many jobs in the UK or the that’s left will be organised into a continued abuse of the rights of workers series of ‘gigs’ that offer little security, predominantly based in the global predictability or job satisfaction. south. Research by the International Trade Union Confederation in 2016 We argue that there is nothing estimated that the 50 largest global inevitable about this extractive model companies directly employ just 6% of of productivity; instead, productivity the workforce they rely on1. and good work can go hand-in-hand if workers are given a voice in shaping Today, scheduling technology is the nature and pace of change. Social increasingly used to bring ‘just-in- dialogue through collective bargaining is time’ production techniques to the the best way to achieve this. contracting of workers themselves. The rise of zero-hours contracts (now affecting 900,000 workers in the UK) The changing nature of reflects a model where employers are production pushing the costs of a slow period on the shop floor onto workers, rather Understanding the links between good than absorbing these as part of their work and productivity requires us to business. Thousands of workers regularly understand what is being produced and see their shifts cancelled at the last how. Changing models of production, minute, or are expected to come into from the Industrial Revolution onwards, work at the drop of a hat or face not have shaped both the nature of the work being offered further work2. and the struggles to ensure it is decent. 18. How can we ensure more workers drive and benefit from productivity gains? 103
The coming wave of technological change Organization’s4 global commission on should be one that offers the chance the future of work put it earlier this year: to reflect on the failures of previous technological shifts to put workers first. The inequality, social discontent and ‘Forging this new path requires political upheaval that many western committed action on the part of countries now face at least in part governments as well as employers’ reflects the failure to manage past and workers’ organizations. They industrial transitions. Perhaps most need to reinvigorate the social importantly, the nature of the current contract that gives working people wave of technological change is one that a just share of economic progress, increasingly emphasises the importance of respect for their rights and workers themselves. Away from the slightly protection against risk in hyperbolic debates about whether and return for their continuing when the robots will take over, economists contribution to the economy.’ and others are increasingly talking about how to measure the increasing contribution that ideas, innovation and At present, too often we see so-called trust make to economic value. productivity improvements being used to reduce labour costs, rather than to achieve To take one example, the economists genuine innovation. It is not only just-in- Diane Coyle and Benjamin Mitra-Kahn time scheduling. ‘Workforce analytics’ is have suggested that the rise of these expected to be a billion-dollar industry ‘intangible’ assets (alongside the in the next decade, devoted to a range increasing need to measure natural of tools for more closely tracking what resources) requires a new framework workers spend their time doing5. The TUC’s for measuring GDP that considers both own research6 found that half of all workers ‘human capital, accumulated adaptable already experience surveillance in the skills and physical and mental health’ workplace, and two-thirds think it could be and ‘social and institutional capital, the used in ways that increase discrimination. degree of trust affecting the transactions Too many so-called ‘innovative’ gig costs of economic exchange and the economy companies have sought to gain viable provision of public goods3’. A a competitive advantage by reducing measure of production that incorporated labour costs – taking people on as self- these factors would surely see the employed to avoid a responsibility to pay contribution of good work to raising the minimum wage, sick or holiday pay, productivity increases still further. despite clear findings from the courts that these workers should be entitled to these But a change to a model of production basic rights7. Taking an approach that that delivers better quality work won’t measured our national output differently, happen without significant policy these activities would clearly be seen as intervention. As the International Labour extractive rather than productive. 104 Can Good Work Solve the Productivity Puzzle?
Workers voice – the key to Lower staff turnover: unionised better productivity workplaces with an on-site representative have lower rates Luckily, there’s nothing inevitable about of staff turnover (measured a trend to ever more extractive forms by looking at the number of of production. As an increasing range people who voluntarily leave an of evidence shows, enabling workers employer). to shape the way that technology and innovation are used can deliver both More effective management higher productivity and a higher quality of change: job-related anxiety of work. As the OECD’s8 recent report on accompanying organisational the future of work concluded: change at work is significantly reduced when unions are involved in discussions on the introduction ‘Collective bargaining and social of the changes. dialogue can help addressing the challenges posed by a changing Greater innovation: workplaces world of work. As demographic with collective bargaining are and technological changes unfold, more innovative, with higher rates collective bargaining can allow of product innovation. companies to adjust wages, working time, work organisation More use of ‘high performance’ and tasks to new needs in a work techniques: unionised flexible and pragmatic manner. workplaces are more likely to It can help shaping new rights, employ ‘high performance’ adapting existing ones, regulating methods of work organisation, the use of new technologies, such as team-working and providing active support to problem-solving groups, than non- workers transitioning to new jobs union workplaces10. and anticipating skills needs.’ It is notable that these are all features likely to be important in an economy We already know that businesses more reliant on ‘intangible’ goods such that embrace workers’ voice see as innovation. But at present, too few improvements in key areas linked with British workplaces are realising these productivity. Research (summarised potential benefits. Not only has collective by Alex Bryson and John Forth in a bargaining coverage declined, from a literature review for the TUC9) shows high of over 70% in 1979 to just 26% that unionised workplaces benefit from: in 2018, but there appears to be little effort by employers to embrace any form of workplace voice. Research in 18. How can we ensure more workers drive and benefit from productivity gains? 105
2011 found that less than half (47%) Giving the right to access to of employees thought that managers workplaces to tell workers were good at responding to suggestions about the benefits of union from employees and just over one in membership and collective three (35%) said that managers were bargaining (following the system good at allowing employees to influence in place in New Zealand). decisions11. A 2016 survey of nearly 7,500 workers found that although 87% agreed New rights to make it easier for with the statement ‘I am keen to embrace working people to negotiate technology and maximise its benefits’, collectively with their employer, and 73% agreed that technology would including simplifying the process improve productivity, less than one in four that workers must follow to (24%) said that their employer gave them have their union recognised by a say in how technology affects their their employer for collective work12. This is a relative, as well as absolute, bargaining, and enabling unions weakness: in a league table of workforce to expand their reach in large participation across Europe, the UK comes organisations. sixth from bottom, with only Cyprus, Lithuania, Latvia, Bulgaria and Estonia Broadening the scope of performing worse13. collective bargaining rights to include all pay and conditions (including pay and pensions, A stronger voice for workers working time and holidays); equality issues (including Workplace dialogue through collective maternity and paternity rights); bargaining delivers better results for health and safety; grievance employers and better quality work for and disciplinary processes; workers, but employers have proved training and development; work reluctant to realise these benefits, too organisation (including the often choosing to rely on methods introduction of new technologies) to improve productivity that reduce and the nature and level of workers’ quality of life. staffing.
The rapid pace of technological change The establishment of new bodies makes it increasingly important that for unions and employers to we change approach. That is why the negotiate across entire sectors, TUC is calling for new rights to embed a starting with hospitality and stronger voice for workers into everyday social care. working life. We’ve set out a detailed plan for reform14, but the headline Previous industrial revolutions have measures include: too often left workers behind. This one offers a chance to do things differently. 106 Can Good Work Solve the Productivity Puzzle?
19. Afterword By Sarah Davidson, CEO, Carnegie UK Trust 19. Afterword. 107
For over 100 years, the Carnegie Better understanding and promoting UK Trust has sought to advance the of the role that good work can play in wellbeing of people across the UK and helping to solve the UK’s productivity Ireland. Paid work has a fundamental puzzle is a crucial piece of this jigsaw. role in supporting our personal, There is of course some debate community and societal wellbeing, about the concept and measures enabling us to provide for ourselves of productivity, but the historical and our families; buy the goods and evidence of the relationship between services we need; build connections productivity growth, higher wages and in our communities; and establish improvements in living standards is our individual and collective sense of clear. If solving the UK’s productivity purpose and identity. Our wellbeing is crisis is the most fundamental challenge affected not only by having access to facing UK policy makers today, as Andy work, but by how we experience it. As Haldane outlines in his Foreword to the What Works Centre for Wellbeing this essay collection, then we need to puts it, when it comes to wellbeing, understand and demonstrate how good ‘having a job is good and having a work can play a central role in meeting good quality job is miles better’.1 this challenge.
It is well understood that the current That was the task that we embarked levels of record employment in the upon in bringing together this essay UK can mask huge differences in the collection and we are extremely grateful quality of work experienced by workers for the wealth of rich and thoughtful in different industrial sectors, in different perspectives expressed by the authors. regions, and in different demographic No single set of stakeholders can groups. Specifically, we know that address alone the challenges we face in workers’ experience of key aspects of supporting the creation of more good work, such as terms and conditions; and productive jobs. The solutions to pay and benefits; physical and mental such complex, multi-layered challenges strain; job design; support structures; will only be found by bringing people voice and representation, and work-life together from different backgrounds balance, can vary enormously across and experiences. For that reason, we the UK labour market. While good work are delighted that the collection gives has enjoyed a much needed increase voice to perspectives from policy; in policy attention in recent years business; academia; and trade unions, there remains much to do: we need to as well as contributions ranging from continue to explore and advance the a UK-wide angle to a specific focus on range of different levers that might be how this agenda is being taken forward deployed to extend the availability of in Scotland, Wales and in North-East work that improves wellbeing for all. England. 108 Can Good Work Solve the Productivity Puzzle?
We were open-minded about what our continues to emerge on how manifold writers would tell us: we did not expect aspects of work quality - like fair to find a silver bullet for poor quality pay, genuine two-way flexibility, and work and low productivity. What the effective training – can lever important authors in this collection have provided productivity benefits. are some clear priority actions for how we can rise to the challenge, with These issues are ripe for further a particular focus on tackling ‘bad exploration. We look forward to working work’ among the UK’s long tail of poor over the coming year with all those productivity performing firms, and with a stake in this agenda, including focusing on empowering workers to governments, to understand how the use technology in a way that makes ideas set out in these essays can be work more fulfilling and productive. implemented to deliver more fulfilling Meanwhile, innovative new thinking work for many more people. Can Good Work Solve the Productivity Puzzle? 109
About the Authors
Tera Allas CBE, Director of Jennifer Beckwith, Principal Research and Economics, Policy Advisor, Employment McKinsey & Company Law & Employee Relations, CBI
Tera is Director of Research and Jennifer is Principal Policy Advisor in Economics at McKinsey’s United Kingdom employment issues at the CBI. She and Ireland Office, working closely with currently manages the CBI’s campaign the McKinsey Global Institute. She leads to boost UK productivity by improving McKinsey’s research on government how businesses lead, develop and and business productivity, technology engage their people. She also represents adoption, and future of work, bringing UK employers at the UN’s International together deep expertise and more than Labour Organisation. Jennifer has two decades of experience in economics, previously led the CBI’s policy-making public policy, innovation, and leadership, on diversity & inclusion, gender pay as well as ten years of experience as a gap reporting, modern slavery and management consultant focusing on labour market enforcement. Prior to the corporate and business-unit strategy. CBI, Jennifer was a policy researcher at London charity Community Links Tera is a frequent author, panellist, on public service reform and provided and speaker on topics ranging from editorial assistance to the International economic and innovation policy Institute of Social History, Amsterdam. and industrial strategy to artificial She has a Masters in Social and intelligence to government performance Economic History from Utrecht measurement. She is Fellow of the University, Netherlands. Academy of Social Sciences and serves as a trustee of the United Kingdom’s Productivity Leadership Group, the National Institute of Economic and Social Research, and the Royal Economic Society. She was previously on the board of Innovate UK, the United Kingdom’s national innovation agency, and a member of the States of Jersey fiscal policy panel. In 2018, Tera was appointed Commander of the Order of the British Empire (CBE) for services to economic policy. 110 Can Good Work Solve the Productivity Puzzle?
Kate Bell, Head of Rights, Derek Bosworth, Honorary International, Social and Professorial Fellow, Warwick Economics, TUC Institute for Employment Research Kate Bell is the Head of the Rights, International, Social and Economics Derek has worked with the Warwick department at the TUC. Institute for Employment Research (a leading international research centre The Department leads the TUC’s focusing on the labour market and its work on boosting employment rights, relationships with the wider economy) promoting social and economic policies for over thirty years. Until recently Derek that benefit working people, and was an Honorary Professor at Wuhan building international solidarity. University of Technology, a Senior Research Associate at St. Peter’s College, Before joining the TUC, Kate worked as Oxford and a Visiting Professor at the UK Head of Policy and Public Affairs for a Commission for Employment and Skills. local authority, for the Labour Party, and He has continued to take an interest in for the charities Child Poverty Action issues relating to skills and employment Group and Gingerbread. Kate is also a throughout his career. He has worked member of the Low Pay Commission, extensively on both theoretical and representing workers. empirical labour supply and demand models, as well as analysing their implications for skill shortages, education and training. Can Good Work Solve the Productivity Puzzle? 111
Felicity Burch, Director of Tony Danker, Chief Executive, Innovation and Digital, CBI Be the Business
Felicity leads the organisation’s policy Tony Danker is Chief Executive of the work to create the conditions that enable Be the Business, the campaign for UK businesses to come up with new ideas, productivity and competitiveness. Be the invest in research and development Business was founded and is chaired by (R&D) and adopt new technologies. Sir Charlie Mayfield (Chairman of the John Lewis Partnership) and supported Prior to taking her current role, she spent by the some of the country’s leading two years as the Head of Innovation businesses and UK Government. and Digital, where she led the CBI’s successful campaign for the government Tony was previously the Chief Strategy to commit to a target for R&D Officer at Guardian News & Media expenditure, as well as agenda-setting (GNM), where he had responsibility work on technology adoption. Felicity’s for the Guardian’s strategy, business first role at the CBI was as the Principal development and analytics functions. Policy Adviser on labour markets, where Prior to this role he was International she was responsible for the CBI’s agenda Director, responsible for GNM’s on pay and the future of work. international expansion.
Felicity’s background is in Economic Before joining GNM, Tony spent two Policy, focused on business growth. years in public policy and was a Special Before the CBI, she was Senior Adviser in HM Treasury. He previously Economist at EEF, the manufacturers’ spent 10 years at McKinsey & Company, organisation. In this role she led the with expertise in government and development of their innovation organisational consulting. policy and industrial strategy work and delivered a breadth of economic and industrial trends research. She has also worked on Experian’s Economic Policy team, with a focus on regional growth. 112 Can Good Work Solve the Productivity Puzzle?
Sarah Darrall, Research Gill Dix, Head of Workplace Assistant, RSA Policy, Acas
Sarah is an Assistant Researcher in the Gil Dix is Head of Workplace Policy at Economy, Enterprise and Manufacturing Acas, Britain’s Advisory, Conciliation and team at the RSA, and also provides Arbitration Service. Acas provides free research assistance to the CEO, Matthew and impartial information, advice and Taylor. She has recently completed a training to employers and employees on Bachelor of Science in Economics at the all aspects of workplace relations and University of Bristol. employment law, supporting positive relationships between employers and employees and providing conciliation Paul Devoy, CEO, Investors in services to resolve workplace disputes. People Acas also provides research and commentary on the world of work. Gill Paul Devoy has been heading up has been with Acas since 1994, and was Investors in People since 2011. Paul led Head of the Acas research team before the buyout of the organisation from UK leading a programme of work on public Government ownership into it becoming policy. a Community Interest Company in 2017.
Moving away from Government has allowed Investors in People to significantly redevelop and expand their products, and now they offer various accreditations that make work better as well as a free platform that supports organisations to Jumpstart their people strategy.
In a previous life Paul was Head of Organisational Development at the Scottish Prison Service. During his time there all prisons in Scotland were awarded Investors in People accreditation. Can Good Work Solve the Productivity Puzzle? 113
Alan Felstead, Research Patricia Findlay, Professor Professor, Cardiff University of Work and Employment Relations, University of Alan is Research Professor in the Strathclyde and Co-Chair, School of Social Sciences at Cardiff Fair Work Convention University. He is project lead on the Skills and Employment Survey 2017 Patricia is the co-chair of the Fair and in 2018-2019 he sat on the Welsh Work Convention in Scotland and the Government’s Fair Work Commission Director of the Scottish Centre for as the Independent Expert Advisor. Employment Research. Patricia is also He has previously held positions at Professor of Work and Employment Nuffield College, University of Oxford Relations at the Department of Human and the University of Leicester and has Resource Managed at the University been Visiting Professor at the ESRC of Strathclyde Business School, where Centre for Learning and Life Chances she also leads the ‘Innovating Works’ in Knowledge Economies and Societies programme and the Fair, Innovative (LLAKES), UCL Institute of Education and Transformative work (FITwork) since 2009. His research focuses on: programme. Her research and teaching the quality of work; training, skills and expertise is in the study of work and learning; non-standard employment; the management of the employment and the spaces and places of work. He relationship. has completed has completed numerous funded research projects (including 15 funded by the ESRC), produced seven books, and written over 200 journal articles, book chapters, research reports and discussion papers. He is currently helping to enact some of the Fair Work Commission’s recommendations through a part-time secondment to Welsh Government. However, he writes here in a personal capacity. 114 Can Good Work Solve the Productivity Puzzle?
Duncan Gallie, Emeritus Francis Green, Professor of Fellow, Nuffield College, Work and Education Economics, University of Oxford University College London
Duncan is Emeritus Fellow at Nuffield Francis is Professor of Work and College, University of Oxford. He joined Education Economics, at the Institute of Nuffield College as an Official Fellow in Education at University College London. 1985 and became Professor of Sociology After graduating in Physics at Oxford, in 1996. He has been Vice-President Francis switched to economics with an Social Sciences of the British Academy MSc at the London School of Economics, (2004 -2006) and Foreign Secretary of before writing his PhD thesis on the the British Academy (2006-2011). His theory of saving at Birkbeck College. research is in economic sociology, in He began his career at the age of 22 at particular the quality of work and the Kingston Polytechnic. After spells at the social consequences of unemployment. Universities of Massachusetts, Leicester, He is currently working on two main Leeds and Kent, in 2010 he moved projects. The first is a European to the Institute of Education (now a comparative study on the effects faculty of UCL), where he now works in of employee involvement on work the LLAKES research centre and in the engagement and skill development. Centre for Global Higher Education. His The second is a research programme research focuses on education, skills, examining changes in skills and the graduate labour market and the employment conditions in Britain from quality of work. His latest book, co- 1986 to 2017. authored with David Kynaston is Engines of Privilege. Britain’s Private School Problem, published by Bloomsbury Press. The author of ten earlier books, and more than 150 papers, he also works as an occasional expert advisor on skills and job quality for the UK government, the OECD and the European Union. Can Good Work Solve the Productivity Puzzle? 115
Josh Hardie, Deputy Director- Golo Henseke, Senior Research General, CBI Associate, University College London Josh is CBI Deputy Director-General. An experienced corporate affairs specialist, Golo is a Senior Research Associate at Josh joined the CBI in 2016 and leads the Centre for Global Higher Education the CBI’s overall policy development, (CGHE) and the Centre for Learning media and campaigning work. From and Life Chances (LLAKES) at the UCL Brexit and global trade to Industrial Institute of Education. Golo’s research Strategy, regional growth and the CBI’s focus on inequalities in education and new campaign, Everyone’s business, all degree outcomes, their relationship and Josh’s focus is aimed at helping business antecedents, skills development and to tackle inequality and raise living skills utilisation in the labour market. standards. His work was recognised in recent reviews of the British higher education Josh joined from Tesco, where he system, consultations for the Teaching was Group Director for Corporate Excellence Framework, and in the Responsibility. He has previously held revision of the British Occupational Exec-level roles at EdComs Ltd creating Classification. behaviour change strategies and campaigns for businesses, government departments and the voluntary sector, and an educational charity, Education Extra, campaigning with schools and working with the Government on educational issues. 116 Can Good Work Solve the Productivity Puzzle?
Mary O’Mahony, Professor of Zayn Meghji, Programme Applied Economics, King’s Manager, RSA College London Zayn is a programme manager at the Mary O’Mahony is Professor of RSA, supporting the organisation’s Applied Economics. Her research internal change project. Prior to joining interests include measuring and the RSA, he completed an MSc in explaining international differences in Environment, Culture and Society, held productivity, technology and growth; various roles in the charity sector, and human capital formation and its worked as a research analyst for a impacts on productivity and measuring human resource consultancy. performance in public services, including health and education. She joined King’s in May 2013 and was previously Anna Round, Senior Research Professor at Birmingham Business Fellow, IPPR North School, University of Birmingham. She is currently a visiting fellow at the Anna is a Senior Research Fellow at National Institute of Economic and the Institute for Public Policy Research Social Research, London and a research (IPPR) North. Anna works on education, associate at the German Institute for skills and social policy across the Economic Research, ZEW, Mannheim. north of England. In addition, she has Her research has been funded by published several reports focusing numerous framework grants from on the economy of the North East of the European Commission and she is England. Before joining IPPR, Anna currently a participant and a member of worked as a researcher at several the management team of the Economic northern universities, and as an analyst Statistics Centre of Excellence, funded in government. Previously she lectured by ONS. in theoretical linguistics at London University. Can Good Work Solve the Productivity Puzzle? 117
Emma Stewart, CEO, Timewise Matthew Taylor, Chief Executive, RSA Emma is CEO and Co-Founder of Timewise and Women Like Us, Matthew Taylor has been Chief responsible for the strategic direction Executive of the RSA since November of both the organisation’s business 2006. In July 2017 Matthew published consultancy and its social foundation. the report ‘Good Work’; an independent Her leadership role sees her working review into modern employment, with businesses, thought leaders, policy commissioned by the UK Prime Minister. makers and social reformers to test In 2019 he also became interim Director and scale innovative solutions which of the Government’s Office Labour deliver successful, sustainable, two-way Market Enforcement. Prior to the RSA, flexibility. As a result of her expertise in Matthew was Chief Adviser on Political the flexible working sphere, Emma has Strategy to the Prime Minister and developed a high profile as a key opinion director of the Institute for Public Policy former, advisor and speaker. She has Research. Matthew is a panellist on contributed to numerous government the programme Moral Maze and series task-forces, reports and initiatives, editor of the Thames and Hudson ‘Big focusing on how to encourage more Ideas’ books. people who need to work flexibly into the workplace, shape the labour markets of the future and raise family living standards. Prior to co-founding Timewise, Emma worked in a range of development roles across the private, civic society and social enterprise sectors and within documentary television. 118 Can Good Work Solve the Productivity Puzzle?
Fabian Wallace-Stephens, Chris Warhurst, Director, Senior Researcher, RSA Warwick Institute for Employment Research Fabian is a Senior Researcher in the RSA’s Economy, Enterprise and As Director of IER, Chris Warhurst Manufacturing team. He is particularly is motivated by wanting to see interested in self-employment, the gig- better scientific and policy-maker economy and the impacts of technology understanding of work and employment. on jobs and has co-authored several He is an Associate Research Fellow of recent RSA reports on these topics. SKOPE at the University of Oxford, a He currently leads the Future Work Fellow of the Royal Society of the Arts Awards – a search for innovations from and a Trustee of the Tavistock Institute around the world that are emerging to in London. He was previously Professor address the challenges workers face in of Work and Organisational Studies at finding, creating and sustaining good the Sydney University Business School work. Fabian has an MSc in Philosophy and Founding Director of the Scottish and Public Policy from the LSE. Prior to Centre for Employment Research at joining the RSA he worked at a social Strathclyde University Business School. enterprise for responsible business. He is currently Chair of the Management Committee for the journal Human Relations, co-editor of Palgrave’s Critical Perspectives on Work and Employment book series and an Editorial Advisory Board Member for Research in the Sociology of Work. Chris’ research expertise centres on job quality, skills and aesthetic labour. Chis has been an expert advisor to the UK, Australian and Scottish Governments as well as the OECD, Oxfam Scotland and the Scottish Living Wage Campaign, and has published 16 books, over 50 journal articles, over 60 book chapters and nearly 50 reports for government and practitioners. Can Good Work Solve the Productivity Puzzle? 119
Matthew Whittaker, Director, Louise Woodruff, Policy and Pro-Bono Economics Partnerships Manager (Work), Joseph Rowntree Foundation Matt joined Pro-bono Economics in November 2019, having spent the Louise is a Policy and Partnerships previous 11 years at the Resolution Manager (Work) at the Joseph Rowntree Foundation think tank. He joined Foundation (JRF). Louise leads JRF’s Resolution Foundation as Senior Good Jobs Strategy aiming to influence Economist shortly after its creation, employers so that more people move and was instrumental in developing its out of poverty through work. Louise has research output and defining the low-to- expertise includes developing solutions middle income group that is the focus to in-work poverty in the UK. Louise of the organisation’s work. He went on led JRF’s work on forced labour in the to grow its research team considerably, UK and also worked on JRF’s 2016 becoming Chief Economist and, from strategy to Solve UK Poverty. Louise 2015, Deputy Chief Executive. He is a holds a B.A. from St. John’s College, leading expert on the subject of income Oxford and a PGCE from the University inequality, and has worked across a of Bath. Her background is in education number of areas related to UK living having previously worked on developing standards. Prior to joining Resolution widening participation activity at the Foundation, he worked for five years in University of Oxford after starting the House of Commons Library, where her career as a science teacher in a he provided economic and statistical comprehensive school. advice to individual MPs and to a number of select committees. 120 Can Good Work Solve the Productivity Puzzle?
Endnotes
1. Overview 4 Irvine, G., White, D. and Diffley, M., 2018. Measuring good work. 1 Taylor, M., 2017. Good work: Taylor Dunfermline: Carnegie UK Trust. review of modern working practices. London: HM Government. Available 5 Warhurst, C., et al., forthcoming for the from: https://www.gov.uk/government/ Carnegie UK Trust. publications/good-work-the-taylor- review-of-modern-workingpractices. 6 We would like to thank Alan Felstead [Accessed October 2019] of Cardiff University and Duncan Gallie of Oxford University for facilitating 2 Irvine, G., White, D. and Diffley, our early access to the latest Skills and M., 2018. Measuring good work. Employment Survey data for theses Dunfermline: Carnegie UK Trust. analytical purposes.
7 There are 60 sectors and each worker 2. Does good work have is allocated one of the 60 productivity a positive effect on measures. productivity? Developing the evidence base 8 For details, see Bosworth, D., et al., forthcoming for the Carnegie UK Trust. 1 Taylor, M., 2017. Good work: Taylor review of modern working practices. 9 It should be emphasised that these London: HM Government. Available findings emerge from initial analysis. from: https://www.gov.uk/government/ Further, more comprehensive, analysis publications/good-work-the-taylor- using the dataset is forthcoming, review-of-modern-workingpractices. published by the Warwick Institute for [Accessed October 2019] Employment Research and Carnegie UK Trust. 2 Siebern-Thomas, F., 2005. Job quality in European labour markets. In: S. 10 Details of this sectoral classification Brazen, C. Lucifora and W. Salverda, can be found in Bosworth, D. et al (op eds. Job quality and employer cit.). Indicatively, the Primary sector behaviour. New York, NY: Palgrave includes agriculture, mining and forestry; Macmillan, 31–66. Low-Tech Manufacturing covers food, paper and water treatment and supply; 3 Our colleagues from the Warwick Knowledge Intensive covers film & Institute for Employment Research television, telecommunications and Wil Hunt and Sudipa Sarkar were computer programming; Less Knowledge part of the project team. Intensive cover accommodation, food & beverage and travel. Can Good Work Solve the Productivity Puzzle? 121
3. From trade-offs to win- 2019. Number of people in wins: how we can unlock employment (aged 16 and over, productivity and good jobs seasonally adjusted). Available from: https://www.ons.gov.uk/ 1 HM Government, 2017. Industrial employmentandlabourmarket/ Strategy: building a Britain fit for peopleinwork/employmentand the future. Available from: https:// employeetypes/timeseries/mgrz/lms assets.publishing.service.gov.uk/ [Accessed October 2019]. government/uploads/system/ uploads/attachment_data/ 4 See, for example, ONS, 2019. Labour file/664563/industrial-strategy- market statistics time series, 2019. white-paper-web-ready-version.pdf Available from: https://www.ons.gov. [Accessed October 2019]. uk/employmentandlabourmarket/ peopleinwork/employmentand 2 Confederation of British Industry employeetypes/datasets/ (CBI), 2017. From ostrich to magpie: labourmarketstatistics [Accessed increasing business take-up of October 2019]; ONS, 2019. EMP13: proven ideas and technologies. Employment by industry. Available Available from: https://www.cbi.org. from: https://www.ons.gov.uk/ uk/media/1165/cbi-from-ostrich- employmentandlabourmarket/ to-magpie.pdf [Accessed October peopleinwork/employmentand 2019]. employeetypes/datasets/ employmentbyindustryemp13 3 See, for example, Office for National [Accessed October 2019]; ONS, 2019. Statistics (ONS), 2019. Productivity A05 SA: employment, unemployment jobs, productivity hours, market and economic inactivity by age sector workers, market sector hours. group (seasonally adjusted). Available from: https://www.ons.gov. Available from: https://www.ons.gov. uk/employmentandlabourmarket/ uk/employmentand peopleinwork/labourproductivity/ labourmarket/peopleinwork/ datasets/productivityjobs employmentandemployee productivityhoursmarketsector types/datasets/employment workersmarketsectorhours unemploymentandeconomic [Accessed October 2019]; ONS, inactivitybyagegroupseasonally 2019. Employment in the UK: adjusteda05sa [Accessed October September 2019. Available 2019]. from: https://www.ons.gov.uk/ employmentandlabourmarket/ 5 ONS, 2019. Personal and economic peopleinwork/employmentand well-being: what matters most to employeetypes/bulletins/ our life satisfaction? Available from: employmentintheuk/september2019 https://webarchive.nationalarchives. [Accessed October 2019]; ONS, gov.uk/20160106043118/http:// 122 Can Good Work Solve the Productivity Puzzle?
www.ons.gov.uk/ons/rel/wellbeing/ Oxford: Oxford University Press, measuring-national-well-being/ 135–160. what-matters-most-to-personal- well-being-in-the-uk-/index.html 11 See ONS, 2018. Estimating the [Accessed October 2019]. impact of the self-employed in the labour share. Available from: 6 ONS, 2019. Personal and economic https://www.ons.gov.uk/economy/ well-being. economicoutputandproductivity/ productivitymeasures/methodologies/ 7 ONS, 2019. Measures of national estimatingtheimpactoftheself well-being dashboard. Available employedinthelabourshare [Accessed from: https://www.ons.gov.uk/ October 2019]; peoplepopulationandcommunity /wellbeing/articles/measuresof Gutiérrez, G., 2019. Revisiting the nationalwellbeingdashboard global decline of the (non-housing) /2018-09-26 [Accessed October labor share. Staff Working Paper No. 2019]; Wheatley, D. and Gifford, 811, Bank of England. J., 2019. UK working lives 2019 survey: full report. London: 12 See, for example, Layard, R., Chartered Institute of Professional 2016. Measuring wellbeing and Development. Available from: cost-effectiveness analysis: using https://www.cipd.co.uk/Images/uk- subjective wellbeing. London: What working-lives-2019-v1_tcm18-58585. Works Wellbeing. Available from: pdf https://whatworkswellbeing.org/ product/measuring-wellbeing-and- 8 Health and Safety Executive, 2019. cost-effectiveness-analysis-using- Working days lost in Great Britain. subjective-wellbeing/ Accessed Available from: http://www.hse.gov. October 2019] uk/statistics/dayslost.htm [Accessed October 2019]. Bangham, G., 2019. Happy now? Lessons for economic policymakers 9 Health and Safety Executive, 2019. from a focus on subjective well-being. Work-related stress, anxiety or London: Resolution Foundation. depression statistics in Great Britain. Available from: https://www. Available from: http://www.hse. resolutionfoundation.org/app/ gov.uk/statistics/causdis/stress.pdf uploads/2019/02/Happy-now-report. [Accessed November 2019]. pdf Accessed October 2019]
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13. Can improving productivity many working families are trapped help our in-work poverty in poverty – it’s time for action. problem? Blog: Joseph Rowntree Foundation. Available from: https://www.jrf.org. 1 Sue, John and Sonia are all pen uk/blog/its-wrong-so-many-working- portraits based on a wide range families-are-trapped-poverty of evidence sources, including [Accessed October 2019]. https://www.jrf.org.uk/report/ what-do-low-paid-workers-think- 6 Innes, D., 2020. What has driven the would-improve-their-working-lives; rise in in-work poverty? York: Joseph https://www.jrf.org.uk/blog/why- Rowntree Foundation, forthcoming. working-parents-are-struggling- repel-rising-tide-poverty; https:// 7 Sissons, P., Green, A. E., and www.tuc.org.uk/research-analysis/ Lee, N., 2017. Linking the reports/insecure-work; https:// sectoral employment structure www.equalityhumanrights.com/ and household poverty in the sites/default/files/the_invisible_ United Kingdom. Available from: workforce_full_report_08-08-14. https://journals.sagepub.com/ pdf; https://www.jrf.org.uk/blog/ doi/10.1177/0950017017722939 universal-credit-needs-reform- [Accessed October 2019]. unlock-families-work-poverty; and https://www.jrf.org.uk/case-study/ 8 Innes, D., 2020. What has driven the sean-mcallisters-a-northern- rise in in-work poverty? soul?gclid=EAIaIQobChMIy-Tp8fqZ 5gIViaztCh0ongf3EAAYASAAEgKEi 9 Sissons, P., et al., 2017. Linking the PD_BwE [Accessed November 2019] sectoral employment structure.
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8 Health and Safety Executive, 2019. over-to-four-day-working-week Work-related stress, anxiety or [Accessed November 2019]. depression statistics in Great Britain, 2019. Available from: https://www. 14 Stewart, E., 2019. Can the four day hse.gov.uk/statistics/causdis/stress. working week work for everyone? pdf [Accessed November 2019]. Blog: Timewise. Available from: https://timewise.co.uk/article/the- 9 Unison, 2014. Flexible working: four-day-working-week/ [Accessed making it work. Available from: November 2019]. https://www.unison.org.uk/ content/uploads/2014/09/On-line- 15 Skidelsky, R., 2019. How to achieve Catalogue225422.pdf [Accessed shorter working hours. Available from: November 2019]. https://progressiveeconomyforum. com/wp-content/uploads/2019/08/ 10 YouGov, 2015. 30% of UK office PEF_Skidelsky_How_to_achieve_ workers are more productive when shorter_working_hours.pdf working remotely. Available from: [Accessed November 2019]. https://yougov.co.uk/topics/politics/ articles-reports/2015/10/20/30-uk- 16 Timewise, 2017. Caring by office-workers-are-more-productive- design. Available from: https:// when-work [Accessed November timewise.co.uk/wp-content/ 2019]. uploads/2018/02/1957-Timewise- Caring-by-Design-report-11.pdf 11 Cranfield University/Working [Accessed November 2019]. Families, 2008. Flexible working and performance. Available from: https:// 17 Timewise, 2019. Improving nurses’ www.workingfamilies.org.uk/wp- work-life balance: insights from a content/uploads/2014/09/Flexible- team-based rostering pilot. Available Working-Performance-2008.pdf from: https://timewise.co.uk/ wp-content/uploads/2019/09/ 12 4 Day Week, 2019. White paper: Timewise-Nursing-Report-2019-1. The four-day week. Available from: pdf [Accessed November 2019]. https://4dayweek.com/four-day- week-trial [Accessed November 18 Timewise, 2019. Building flexibility 2019]. into secondary schools: how to create part-time and flexible roles that work 13 The Guardian, 2019. String of British for teachers and schools. Available firms switch over to four-day working from: https://timewise.co.uk/ week. The Guardian, 12 March wp-content/uploads/2019/07/ (online). Available from: https:// Timewise-Now-Teach-Report_2019. www.theguardian.com/world/2019/ pdf [Accessed November 2019]. mar/12/string-of-british-firms-switch- 136 Can Good Work Solve the Productivity Puzzle?
19 Timewise, 2016. Modern retail: a 17. Unlocking potential: nation of part-time shop-keepers?. ways of tapping into Available from: https://timewise. employees’ ideas to enhance co.uk/article/modern-retail- productivity nation-of-part-time-shopkeepers/ [Accessed November 2019]. 1 The survey is seventh in a series of nationally representative sample surveys of individuals in employment 16. Finding our edge: engaging aged 20–60 years old (although employers in the movement the 2006, 2012 and 2017 surveys to make work better also sampled those aged 61–65). In 2017, 3,306 workers (employees 1 In 2012 Gallup analysed 263 and self-employed) were interviewed research studies across 192 for around 60 minutes in their own organisations in 49 industries homes (www.cardiff.ac.uk/ses2017). and 34 countries. See Harter, J. K. et al., 2013. Gallup: the 2 See Felstead, A., et al., 2018. relationship between engagement Productivity in Britain: the workers’ at work and organizational perspective – first findings from the outcomes. Available from: https:// skills and employment survey 2017. employeeengagement.com/wp- London: Centre for Learning and Life content/uploads/2013/04/2012- Chances in Knowledge Economies Q12-Meta-Analysis-Research-Paper. and Societies, UCL Institute of pdf [Accessed October 2020]. Education.
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6 Reeves, R., 2019. Government’s content/uploads/2017/10/making- Industrial Strategy must not shut the the-future-count.pdf [accessed door to ‘neglected’ industries. Chair December 2019][accessed October of the Department for Business, 2019] Energy and Industrial Strategy, 19 March. Available from: https:// 4 Global Commission on the Future www.parliament.uk/business/ of Work, 2019. Work for a brighter committees/committees-a-z/ future. Geneva: International commons-select/business- Labour Organization. Available energy-industrial-strategy/ from: https://www.ilo.org/wcmsp5/ news-parliament-2017/industrial- groups/public/---dgreports/--- strategy-report-published-17-19/ cabinet/documents/publication/ [accessed October 2019] wcms_662410.pdf [accessed October 2019]
18. How can we ensure more 5 Belton, P., 2019. How does it feel workers drive and benefit to be watched at work all the time. from productivity gains? BBC Business, 12 April. Available from: https://www.bbc.co.uk/news/ 1 International Trade Union business-47879798 [accessed Confederation, 2016. Scandal! October 2019] Inside the global supply chains of 50 top companies. Available from: 6 Trades Union Congress, 2018. I’ll be https://www.ituc-csi.org/IMG/pdf/ watching you: a report on workplace pdffrontlines_scandal_en-2.pdf surveillance. Available from: https:// [accessed October 2019] www.tuc.org.uk/research-analysis/ reports/ill-be-watching-you [accessed 2 See, for example, Low Pay October 2019] Commission, 2019. A response to the government on one sided 7 See, for example, BBC News, 2018. flexibility. Available from: https:// Uber loses latest legal bid over assets.publishing.service.gov.uk/ employment rights. BBC News, government/uploads/system/ 19 December. Available from: uploads/attachment_data/ https://www.bbc.co.uk/news/ file/765193/LPC_Response_to_ business-46617584 [accessed the_Government_on_one-sided_ October 2019] flexibility.pdf [accessed October 2019] 8 Organisation for Economic Co- operation and Development 3 Coyle, D, Making the Future Count, (OECD), 2019. Facing the future Available from https://indigo. of work: how to make the best of testudo.goodcaesar.org/wp- collective bargaining. In: OECD 138 Can Good Work Solve the Productivity Puzzle?
employment outlook 2019: the 12 The Smith Institute, 2016. The future of work. Paris: OECD. Available productivity puzzle: a view from from: https://www.oecd-ilibrary. employees. London: The Smith org/sites/9ee00155-en/1/2/5/ Institute. index.html?itemId=/content/ publication/9ee00155-en&_ 13 European Trade Union Institute, csp_=b4640e1ebac05eb1ce93dd 2019. Benchmarking Working e646204a88&itemIGO=oecd& Europe 2019. Available from: https:// itemContentType=book [accessed www.etui.org/Publications2/ October 2019] Books/Benchmarking-Working- Europe-2019 [accessed December 9 The research is summarised in 2019] Bryson, A. and Forth, J., 2017. The added value of trade unions: 14 Trades Union Congress, 2019. new analyses for the TUC of the A stronger voice for workers. Workplace Employment Relations Available from: https://www.tuc. Surveys 2004 and 2011, London: org.uk/sites/default/files/2019-09/ Trades Union Congress; and Bryson, Astrongervoiceforworkers.pdf A. and Forth, J. 2017. Work/life [accessed October 2019] balance and trade unions: evidence from the Workplace Employment Relations Survey 2011, London: 19. Afterword Trades Union Congress. 1 Submission by Nancy Hey, Director 10 Askenazy, P. and Forth, J., 2016. of What Works Wellbeing, to the Work organisation and HRM – does Carnegie UK Trust, Sept 2017, see context matter? In: T. Amossé, A. https://whatworkswellbeing.org/ Bryson, J. Forth and H. Petit, eds. product/job-quality-and-wellbeing/ Comparative workplace employment for more information relations: an analysis of Britain and France. Basingstoke: Palgrave Macmillan.
11 The 2011 Workplace Employment Relations Study: first findings. Available from: https://www.gov.uk/ government/publications/the-2011- workplace-employment-relations- study-wers [accessed December 2019}
Carnegie UK Trust The Carnegie UK Trust works to improve the lives of people throughout the UK and Ireland, by changing minds through influencing policy, and by changing lives through innovative practice and partnership work. The Carnegie UK Trust was established by Scots-American philanthropist Andrew Carnegie in 1913. www.carnegieuktrust.org.uk
These collected essays were reviewed and edited for the Carnegie UK Trust by Gail Irvine, Carnegie UK Trust, January 2020.
Carnegie United Kingdom Trust Registered Charity No: SC 012799 operating in the UK Registered Charity No: 20142957 operating in Ireland Incorporated by Royal Charter 1917