It’s currently cool to talk about treating your workforce as a commodity. Evidence- Jeff Bezos can get on the Front Page of the New York Times for his experiments in office cruelty. “Amazon is successful right now- Bezos must be getting it right” – this from one hard-pressed “worker” in Pension PlayPen Ltd!
Bezos’ antics haven’t gone un-noticed – not least in the pages of the Guardian where Will Hutton has written brilliantly about the disposability of the workforce, citing the behaviour of Jeff Bezos to show just how far Amazon is from what is the cultural standard in UK’s traditional employers.
But the standards of the past are not always transposing into the present.
The Citizens Advice Bureau have calculated that there are 460,000 people in this country who are being classified by employers as self-employed but are their “workers’ according to the definition applied by the DWP for inclusion in auto-enrolment.
In the old days, we’d have heard about this from the unions, but the 460k lost souls aren’t union members. Of course pensions aren’t the only things they are missing out on but it’s the kind of issue I’d want to have our new(ish) pension minister getting her teeth into
For the record Baroness, it’s not cool as far as I’m concerned.
I wrote in 2012 about the practice of some staffing agencies to move workers to offshore contracts (typically housed in Sark) to ensure they were not eligible for pension contributions till 2017. One organisation offered supply teachers a fractional advantage in take home in exchange for giving up benefits. The staffing agency was supposed to be based in Sark but was run out of Victoria. When I visited their offices they had as piped music- the sound of seagulls. Presumably this helped supply teachers believe they were employed offshore!
This abuse is still going on. It’s not cool to dupe people out of their benefits, nor is it cool for productivity. The decline in the benefits payable to UK workers has followed closely the decline in their productivity, or is it the other way around?
The “don’t give a damn about our staff ” culture , espoused by Bezos and others is replaced by a “give everything for your company” culture. Reading about Amazon, I am reminded of my early years working in life insurance when I (and many of my colleagues) became obsessed with mission statements and quite forgot the broader values that governed social behaviour.
We not only became extremely annoying to our customers, we created an anger against aggressive insurance salesmen that persists to this day. Short term win- long term disaster!
What is cool, is to see employers investing in their workforce for the long-term through training and through benefits. It would certainly be “cool” if some of the companies that manage the pension funds of the likes of BA and Cadburys and Centrica, started to look at the shareholder value they create in terms of the way they treat their staff.
I am an advocate of long-term investment, the fund managers I admire- like Aberdeen and Fundsmith, are managers who value companies who take a long-term view on staff welfare and who invest in their human resource as a priority.
But these investors are few and far between, at the other extreme are the venture capitalists hawking private equity. Their time horizons are seldom more than five years and- as they feel they will not reap the dividend of investment in the workforce, their priorities are immediate profit maximisation.
For the companies being founded in the past fifteen years, the easiest path to growth is through the short-term financing of private equity.
What is needed is a realignment of interests. The interests of people in the company they work for needs to be a long-term interest, just as the interest of companies must be in building long-term relationships with staff.
For those of us who work in pensions (the ultimate long-term product) , there’s a need to return to a vision of what we do that links the benefit of the staff pension to the long-term good of both staff and companies.
This means getting beyond the “compliance culture” of auto-enrolment and convincing employers to treat their staff fairly.
This means including the 460,000 “self-employed” workers currently excluded from workplace pensions, closing down the loopholes that allow British teachers to be employed in Sark (to avoid the payment of VAT and pensions) and a general move back to the payment of proper contributions into auto-enrolment plans.
I don’t meet many bosses who want to be seen as uncaring employers. Even Bezos believes he is caring for his staff (no matter how frightful working at Amazon appears). Lucy Kellaway is quoted in today’s FT as having Bezos as a corporate pin-up.
“At Amazon, the customer wins- and the employee does not. The company may not have chosen the most morally acceptable trade-off. But it has laid bare this fact of economic life, when some win, others lose.”
I’m a boss , a shareholder and an employee. I don’t see things aren’t as binary as that. Nor do Facebook or Google it would seem. Compare the attitudes of these organisation to what we know of Amazon by reading Gill Tett’s recent FT article.
We don’t need to be nasty to our staff to get the most from them. As Will Hutton concludes
Ultimately, long-term value creation can’t be done by treating your workforces as cattle. It’s the great debate about today’s capitalism. It would be a triumph if it was taken more seriously in Britain.
Ultimately , this is a long-term v short-term debate. Good guys win in the long-term.