According to data released earlier this month (August 2019) by the Office for National Statistics (ONS), in the second quarter of 2019, the British economy contracted for the first time in almost seven years.
Down from a 0.5 per cent expansion in the first quarter of the year, output fell 0.2 per cent in the three months preceding June. Despite the new Prime Minister Boris Johnson pledging to put “rocket boosters” on the UK’s economy, many commentators are stipulating that the economy is heading toward recession.
Analysts attested to increased economic uncertainty and slowing stockpiling activity pre-Brexit. Both factors were exacerbated by a pessimistic global economy, with the Chancellor of the Exchequer Sajid Javid declaiming a “challenging period across the global economy, with growth slowing in many countries.”
These latest figures clearly evidence the difficulties facing UK organisations as they sail the uncharted waters toward a likely no-deal Brexit. However, rather than pointing to the global economy, organisations must recognise there are also problems closer to home.
As noted in our 2019 Organisational Wellbeing and Talent Insights Report, many UK businesses are failing to tailor engagement strategies to shifting demographics. In their no-deal planning, business leaders are failing to account for one of the key factors affecting their company’s ability to weather the uncertainty ahead: the shifting attitudes, needs and desires of UK employees.
In the first quarter of 2019, labour insights for the UK had appeared rather rosy. Government figures detailed a falling unemployment rate and job vacancies touching a 15-year high, despite many over-65s still being in the workforce.
However, on inspection, job vacancies and pay increases were restricted to areas such as technology, where skilled individuals were in short supply; and, in fact, productivity in the UK economy had flatlined since 2007.
Demographically, millennials are quickly becoming the dominant force in the employee pool, as more and more graduates continue to be hired, and older members of this generation enter senior managerial positions.
Simultaneously, the labour market could be characterised by its ageing population, with data indicating a lower rate of retirement in recent years. This tendency to stay longer in the workforce coincides with an increase in so-called “third age” employees. Accordingly, the median age of UK employees stands at age 40 today, compared to age 30 in 1974 (ONS, April 2019).
Employer value propositions remain key
With a need to balance these competing demographics, and with reduced capacity to offer increased financial incentives, it is vital that companies bolster their employer value proposition (EVP) – of which non-financial benefits are an increasingly vital core.
Every employer bidding for top talent knows the importance of an EVP. However, many do not realise that every organisation already has an EVP whether purposely created or not. The experience of that EVP is pervasive present in every water cooler chat, performance review, and exit interview.
Ethics and culture are intrinsically linked to the strength of an EVP within the workplace. Increasingly, these criteria affect both the desire to employees to commit their future to their employer, and to do their job to the best of their abilities.
Engagement can become a driving force
Organisations seeking a boost ahead of a tricky “cliff-edge” Brexit would do well to assess the EVP they deliver. Several studies to date have detailed how increased employee wellbeing can significantly improve productivity; according to a report released by The New Economics Foundation earlier this month, giving workers more public holidays and raising wages could yield significant boosts to the UK economy.
Many of the best talent prospects seek workplaces that promote a culture of development, progression and support. Meeting these aspirations is the route to boosting engagement and, in turn, the quality of work produced.
Offering agile working remains one way to efficiently increase engagement. Most employees (89 per cent) consider flexible working a key motivator of their productivity at work even more so than financial incentives (77 per cent). This finding is supported by high-profile studies from the Swedish Government, which investigated the effects of reducing working days for nurses to six hours. In the first 18 months of the trial, nurses working shorter hours logged less sick leave, reported better perceived health and boosted their productivity by organising 85 per cent more activities for their patients.
Much of this rising demand for employers to “stand for something” and champion ethics and culture is indeed driven by the millennial portion of the workforce. However, there exists a significant appetite across all portions of the workforce for policies respecting wellbeing and increasing work-life balance: in a recent Gallup poll, 85 per cent of employees worldwide reported feeling disengaged with their workplace. Addressing this worrying statistic should be a top concern for organisations ahead of a tricky no-deal Brexit, after which employee confidence may sink even further.