Chartered Management Institute: In My Opinion

John Taylor, chief executive of Acas and a CMI Companion, believes improving staff engagement has curtailed the impact of the recession on employment relations.

Last Updated: 09 Oct 2013

Has the recession had a Jekyll-and-Hyde effect on employment relations? We sometimes try our best to be the 'good' employer, engaging with our employees and looking after their health and wellbeing, but end up spending as much time (or more) playing the part of the 'bad' employer, intent on expenditure reviews and rationalising staff resources. If this is the case, these personality extremes can be hard to live with. That's especially true when almost half of us at work have known only good times, with economic growth and regular pay rises.

The depth and speed of this recession have come as a shock. We have seen the return of deflation for the first time in nearly half a century, with the introduction of 'quantitative easing' - printing money, to you and me - and a sharp rise in the number of unemployed (up from 2.22 million in March 2009 to 2.46 million in October). Overall, though, the impact of the recession on the UK has been patchy, with some areas hit harder than others. The private sector has suffered more than the public sector, with manu facturing and services experiencing the worst job losses. A study by the Work Foundation identified the core cities of the North East, West Midlands and Scotland as suffering the highest rise in those claiming Jobseeker's Allowance.

One issue people often overlook when analysing the impact of the recession is the relative inexperience of the managers and employees at the front line of employment relations. A whole generation of employers have never had to let people go, and a whole generation of employee and union representatives have never had to sell their colleagues a pay cut to preserve jobs.

In this recession, the old adversarial roles have shifted. Looking after sectional interests often comes second to survival. With the bedrock of financial stability crumbling under us, managers and employees can be unsure how to act. For example, employers might send out positive messages in a well-intentioned attempt to maintain morale during tough times, only to raise expectations about pay levels. Equally, employees may fear they are about to lose their jobs and decide they have nothing to lose by putting in a tribunal application against their employer.

In Robert Louis Stevenson's famous story, Mr Hyde was an incarnation of all of Dr Jekyll's bad impulses. One could argue that the recession has accentuated some of the worst aspects of employment relations - such as unofficial industrial action, rising numbers of individual and collective disputes and the increasing vulnerability of agency and temporary workers. Last January, 600 employees walked out of the Lindsey Oil Refinery in protest at the recruitment and working practices of a sub-contractor. This kind of mass action may become more common, with employees making a bigger statement about their economic hardship. Historically, the number of employment tribunal cases rises during difficult times. In the past 12 months, there has been a 22% rise in unfair dismissal claims.

But this isn't the whole story. There are many instances of staff, trade unions and employers working together to come up with creative and flexible alternatives to redundancies. As the number of people in full-time employment has risen, so has the number in part-time work. A survey by the manufacturers' organisation EEF found that a quarter of manufacturing firms have reduced working hours since the start of the recession. This is one way for businesses to hold on to valuable skills, and it shows great foresight, for these skills might otherwise have to be re-recruited at great cost when the recession ends.

Many organisations have frozen or even cut pay as they try to save jobs and retain skilled workers. For instance, staff at Jaguar voted to accept a shorter working week and a one-year pay freeze to avoid compulsory job cuts. Trade unions have often been central to the success of what is called 'concession bargaining', whereby employees accept a deterioration in their terms and conditions in exchange for saving jobs.

The approach that most clearly resembles this give and take between employers and staff is employee engagement. This is essentially a system of exchange whereby an employer provides its employees with the opportunity for job satisfaction, training, equal opportunities, flexible working, regular consultation and communication and fair pay; and, in return, employees provide hard work, loyalty, pride in their work, flexibility and regular feedback. Of course, pay will often be the sticking-point in this arrangement, but many employers are embracing engagement as a way of improving current productivity and, looking forward, as a way of retaining the loyalty and commitment of staff.

I am encouraged that during the boom times we formed some good habits in the workplace. We've learned to challenge inequality and discrimination, protect the rights of parents, value diversity and the need for work/life balance, and developed relationships between employers and employees based on trust and an open, honest dialogue. These qualities will prove more valuable than ever as we fight our way out of recession and prepare for the upturn.

CV - JOHN TAYLOR joined Acas in 2001 as its post-reorganisation first chief executive, having been part of the team that set up the modern service in the 1970s. His background is in the public sector. He has been a member of numerous task forces, was a German Marshall Fund fellowship scholar to the US, and became a CMI Companion in 2003. He is a board member of Government Skills, the Sector Skills Council for Government and the Armed Forces, a governor of Thames Valley University and a member of the NHS Partnership Board.

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