Is there more to life than money? Should our government be concerned with more than just increasing our Gross National Product (GDP)? Absolutely, argues a new NEF report, “Measuring what matters: Five indicators of National Success”. The first indicator, “Good jobs”, speaks directly to the concerns of business, calling for a living wage and job security for all employees.
The very idea that someone can go to work all day and still struggle to make ends meet feels like a story you would find in the pages of a Dicken’s novel, not a contemporary policy report. But the numbers say something different. Our research shows that 31% of the UK workforce are dissatisfied with their levels of pay, and 48% are concerned with their job security.
This is bad news for British workers. A steady income and reliable work hours help all of us to balance our jobs with the rest of our lives. But it is also bad news for British business. Yes, on the surface, transitioning to financially secure jobs may feel like an outlay that will impact poorly on the bottom line. But dig a little deeper into the consequences of unfairness at work and you find the costs of high attrition, low productivity and negative brand image quickly tip the scales.
Here at Happiness Works we consult with businesses all over the world to improve employee wellbeing and a sense of “fairness” is a fundamental backdrop to a workplace culture where people and are highly engaged, creative, productive, and, ultimately, create profit.
We see the fallout of unfair work conditions in how people behave, how they feel and ultimately whether they stay at a company:
Lack of respect and high attrition
Organisations that haven’t managed to foster a respectful relationship with their employees have trouble holding onto staff. Trust and loyalty is born out of reciprocal relationships, where there is a give and take between what employees need and what their organisation needs. If the balance isn’t there, employees jump ship the moment a better offer comes along. Culturally we have begun to accept staff turnover as an inevitable fact of economic life, thinking of it as a reasonable business cost. But many of our clients have reached out to us because of their significant attrition rates, some up to 90%. The logistical cost of replacing a single employee is over £5,000 to cover costs of temporary workers, advertising, time spent interviewing and HR time spent processing and inducting a new employee. Add in the 28 weeks it takes to get a new worker up to ‘optimum productivity’ and shareholders should be demanding their businesses take fairness seriously.
Worry and low productivity
Whether the trigger is low wages, lack of job security, or working hours that extend way beyond what people signed up for, we see how much human energy gets wasted when people feel they are being treated unfairly. Britain is already ranked second lowest out of all the G7 countries for productivity and it has only got worse since the recession. George Osborne has called raising Britain’s productivity the “challenge of our lifetime”. In our experience this woeful statistic has nothing to do with people’s motivations to work. Employees want to feel a sense of purpose at work. They seek freedom from concerns on the home front to focus their energy on achieving, progressing and exceeding peoples’ expectations. This is personally rewarding and highly productive. Reducing the time that people spend worrying about rent, childcare and lack of time with family creates a quick win: it frees up time and energy to get the job done.
Negative perceptions and a diluted company brand
Another cost to consider is the value of the company brand. In today’s economy the inherent value of many businesses is not tied to their physical assets (e.g., buildings, machinery) but to their human capital. How people feel about a company and the work they do is shared more than ever - online and offline. Employees are situated in friendship networks and online communities who care about them. In our increasingly globalised world, experiences and impressions of a company are more permeable and influential than ever. More of our clients are connecting the dots between employee experience and customer perceptions to develop their competitive advantage. Building a positive relationship with employees is becoming an integral part of brand management.
We like NEF’s report because it reminds us that we should strive for a certain quality of experience at work, as well as in life. “Be fair” is a key ingredient of happy work. Lots of factors influence how engaged, motivated and productive employees are but financial and contractual security is a necessity - a foundation upon which “Good jobs” can be built.