With the effects of inflation combined with rising interest and the post-pandemic squeeze, HR departments have not faced a more challenging time in well over a decade. Wage growth is certainly not keeping pace with the current inflation rate of 11% but the same can also be said for the past few years. Most pay increases have done no more than keep things on track and, in real terms, across many industries and sectors, rises have still felt like a cut in pay.
The perception is that industrial action only impacts the public sector, but that is not the case. It is true that the overall impact of days lost in the public sector is far greater because of the volume of workers. However, recent ONS analysis has started to show a significant number of days lost to strike action in the private sector, with a peak in August 2022 (see graph).
Recently, Greene King - whose pub brands include Hungry Horse and Wacky Warehouse and who brew popular beers Old Speckled Hen and Abbot Ale – have faced a significant challenge with 188 Unite members staging a five-day walk-out from 5 to 12 December.
Across the board, the main reasons for strike action are pay, changes in working conditions and changes in benefits, in particular pensions. The challenge to HR is a cause for genuine concern and disruption is becoming far more frequent. On the one hand, employees affected can become unsettled and disillusioned with morale strained. On the other, the effects on the organisation can be immense through a combination of reputational fall-out, productivity decline and financial impact.
While organisations don’t have to recognise a union, you could find trade unions lobbying for union recognition, if organisations choose not to and the union achieves 10% membership it can then apply for statutory recognition from the Central Arbitration Committee (CAC). Interestingly, Office for National Statistics (2021), highlighted that membership over the last number of years has been driven up by female membership. Regardless of whether this ends up happening or not, companies should certainly guard against this eventuality by getting out ahead of the issue and communicating with their workers.
With that in mind, here are four areas to look at to reduce the chances of it reaching that stage.
Steps to mitigate discontent
- Listen to your workers and understand what they are saying – Try to encourage an open and positive environment through effective two-way communication channels between workers and HR. If workers can address issues and raise concerns they are less likely to feel aggrieved.
- Be self-aware and know what messages you are sending out - Are your leaders unapproachable, or even invisible to employees? Are luxury perks going to a chosen few? What practices are happening, that whilst may have the best intention, aren’t landing well? These things can cause discontent among employees struggling, to make ends meet. Be mindful and empathetic.
- Track pay trends - Know what your competition is doing and keep track of other industries and sectors. Get under the bonnet of your own workforce to fully understand what pay and reward look like across its dynamics and demographics. Ask: what are we paying at the low end and the high end? Who has received pay increases recently? Why did they get them and what did they amount to? Can we see any red flags in terms of pay approach and benefits differences?
- Transparent pay policy - Ensuring that you have a framework and pay policy in place which not only provides clarity for employees on how pay is set and how decisions are managed but more importantly how they can progress their pay. If your approach is transparent and consistent, it’s more likely to also feel fair.
In summary, try to encourage an environment that provides two-way communication, enables issue resolution and sense-checks against a culture of ‘haves vs have-nots'. All of these can mitigate discontent. At the same time, keep your finger on the pulse when it comes to cross-industry pay practices and make sure your employees know how their pay is set, managed and potentially grown. These measures should give you a happier workforce and make you better placed to deal with any issues that arise.
