How to tackle unconscious bias: Step 1 – read this!

What is unconscious bias?

Although levels of explicit prejudice are falling, discrimination continues to be a problem for many sections of society.  One reason for this may be ‘unconscious bias’.

Unconscious bias is “a bias that we are unaware of, and which happens outside of our control. It is a bias that happens automatically and is triggered by our brain making quick judgments and assessments of people and situations, influenced by our background, cultural environment and personal experiences.”

Everyone has some degree of unconscious bias.  Unconscious thoughts are often based on stereotypes and prejudices that we do not realise that we have.

From a survival point of view, these brain ‘shortcuts’ are a positive and necessary function – they help us to make snap decisions in dangerous situations, for example.  However, in everyday life, they can negatively effect rational decision-making.

Types of unconscious bias

Unconscious bias has different forms.  One common form is Affinity bias – the subconscious preference for people with similar characteristics to ourselves (sex, age, ethnicity, socioeconomic class, educational background etc.).  In 2015, the CIPD reported that recruiters were often affected by affinity bias, resulting in the tendency to hire ‘mini-mes’.

The Halo effect involves the tendency for an impression created in one area to influence opinion in another area.  For example, a disproportionate number of corporate CEOs are over six foot tall, suggesting that there is a perception that taller people make better leaders, or are more successful. Similar patterns have been observed in the military and even for Presidents of the United States.

The Horns effect is the opposite of the ‘Halo effect’ – where one characteristic clouds our opinions of other attributes.  For example, the perception that women are ‘less capable’ in certain occupations.  A review found that female psychologists and women in STEMM (science, technology, engineering, mathematics and medicine) departments were just as likely to discriminate against female candidates as their male counterparts.

The same qualities can also be perceived very differently in different people – for example, assertiveness in a man may be perceived more positively (‘strong leader’) than in a woman (‘bossy’).

Impact of unconscious bias

Unconscious bias not only influences our body language and the way we interact with people, it can also negatively influence a number of important decisions in the workplace, including:

  • Recruitment
  • Promotion
  • Staff appraisals
  • Workload allocations

As well as being unfair, decisions based on unconscious biases are unlikely to be optimal and can result in missed opportunities.  Where unconscious bias also effects a protected characteristic, it can also be discriminatory.

How to mitigate unconscious bias

So, now you know what unconscious bias is, what can you do about it?

The good news is that it is possible to mitigate the effects of unconscious bias. The first step is to become more aware of the potential of unconscious bias to influence your own decision-making. Large organisations such as Google and the NHS are already providing unconscious bias training to their staff.

You can take this awareness further by taking an Implicit Association Test, such as that provided by Harvard University.  This will help to identify and understand your own personal biases.

Other ways to help reduce the influence of unconscious bias include:

  • Taking time to make decisions
  • Ensuring decisions are justified by evidence and the reasons for decisions are recorded
  • Working with a wider range of people and get to know them as individuals, such as different teams or colleagues based in a different location
  • Focusing on positive behaviours and not negative stereotypes

At the corporate level, ways that organisations can help to tackle unconscious bias include:

  • Implement policies and procedures which limit the influence of individual characteristics and preferences, including objective indicators, assessment and evaluation criteria and the use of structured interviews
  • Ensure that selection panels are diverse, containing both male and female selectors and a range other characteristics where possible (ethnicity, age, background etc.)
  • Promote counter-stereotypical images of underrepresented groups
  • Provide unconscious bias training workshops

Tackling unconscious bias is not just a moral obligation; it is essential if organisations are to be truly inclusive.  By making best use of the available talent, it can also help to make organisations be more efficient and competitive.


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Is the record high employment rate masking the reality of in-work poverty?

wage-packetBy Heather Cameron

The employment rate may have hit a record high of 74.6%, with unemployment continuing to run at an 11-year low, but in-work poverty has also reached unprecedented levels.

More than half (55%) of people in poverty are living in working households, including millions of children, according to the latest Monitoring poverty and social exclusion (MPSE) report.

And new research for the Joseph Rowntree Foundation (JRF) published last week says four million more people are living below an adequate standard of living and ‘just managing’ at best.

Statistics

The findings of MPSE paint a bleak picture for a substantial share of the UK population. It notes that the proportion of the UK population living in poverty has barely changed since 2002/03, remaining at around 21%. And at 55%, those in poverty in working households has reached its highest level since the data set began in 1994/95.

Of this 55%, four fifths of the adults in these families are themselves working – a total of 3.8 million workers were living in poverty in 2014/15, an increase of around a million since 2004/05.

Female employees make up the single largest group within this group at 1.5 million, followed by male employees at 1.4 million. However, the majority of workers in in-work poverty are male (53%) as there were 620,000 male self-employed workers in poverty in 2014/15, while there were 250,000 female self-employed workers.

The story is different for workless households, however, as the proportion of people in poverty in these households has decreased, with the number in workless or retired families having fallen by half a million. Despite the significant increase in the number of people aged 65 and over, the figures show there are 400,000 fewer pensioners in poverty. There have also been reductions in the number of children in workless households.

While this is clearly encouraging, as the MPSE report suggests, it is difficult to categorise this as progress since there has been little change in the relative poverty measure overall.

Moreover, the new research from JRF warns that millions of just managing families are on the tipping point of falling into poverty as 30% of the population are living below the minimum income standard (MIS). In addition, 11 million people were found to be living far short of MIS, up from 9.1 million, who have incomes below 75% of the standard.

So what is causing these worrying statistics?

Contributory factors

The labour market has undoubtedly had some influence on these figures, with low wages and insecurity. Although average incomes have begun to rise, they are still below their peak. Male weekly earnings are still lower than 2005 levels and female weekly earnings, although now equal to 2005 levels, are still below what they were in 2010.  And with inflation expected to return, it has been suggested that hourly pay is unlikely to reach its pre-recession peak before 2020.

However, this is only part of the issue. There are also a number of other contributory factors, including:

  • increasing cost of living;
  • housing market failures; and
  • cuts in welfare benefits.

The increase in numbers living below an adequate standard of living has been driven by rising living costs while incomes stagnate. The price of a minimum ‘basket of goods’ has risen 27-30% since 2008, and average earnings by only half of this. The JRF analysis suggests the cost of living could be 10% higher by 2020, a period when much state support has been frozen.

Housing is also an important factor. It is often too expensive and of poor quality, particularly in the private rented sector. The MPSE findings show that the number of private renters in poverty has doubled over the last decade, with rent accounting for at least a third of income for more than 70% of private renters in poverty.

Households accepted as homeless and those in temporary accommodation have also increased and landlord evictions are close to a ten-year high.

Added to this, is the four-year freeze on benefits, tax credits and Universal Credit (UC), along with a reduction in the overall benefit cap. The benefit cap mainly affects households with children and will increase the number of families affected, from 20,000 to 112,000.

All this puts those on the lowest incomes at risk.

Way forward

Clearly, strong growth in the number of people in employment does not mean an end to employment-related disadvantage.

To help end poverty, the JRF has called on the government to make a number of changes, including:

  • reversing cuts to the amount people can earn before their benefits are reduced;
  • ending the freeze on working age benefits;
  • extending support to low wage sectors to reduce the productivity gap; and
  • investing in a living rents scheme to provide more affordable housing.

As the MPSE report concludes, “solutions for in-work poverty require more than just more work.”


If you enjoyed reading this, you may also like our previous articles on poverty.

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The disability employment gap – what needs to be done to change employer attitudes to disability?

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By Heather Cameron

‘Employment rates amongst disabled people reveal one of the most significant inequalities in the UK today’ (The work, health and disability Green Paper, 2016)

The government’s recent green paper highlights the extent of the disability employment gap in the UK, showing that less than half (48%) of disabled people are employed, compared to 80% of the non-disabled population.

Despite an increase in the number of disabled people in work, this employment gap between the disabled and non-disabled population has remained largely static at around 30 percentage points for the past decade. There are nearly four million disabled people in work, but research has shown that more disabled people have fallen out of work than moved into work, while the rest of the population has experienced movement in the opposite direction.

The government’s manifesto ambition is to halve the disability employment gap by 2020 – equivalent to 1.12 million more disabled people in work – but at the current rate of progress, it has been suggested that it would take more than 200 years for the employment gap to halve.

At a time when the UK’s employment rate is at its highest level since records began, with almost 75% of the working population in work, this is a disheartening statistic.

Barriers

This suggests that disabled people continue to face significant barriers to work. Some that are regularly cited, include:

  • physical barriers such as access to transport and accessibility within places of work;
  • a skills and qualifications gap between the disabled and non-disabled population, with disabled people only about half as likely to go to university as non-disabled people, and less likely to take up an apprenticeship;
  • insufficient support for disabled people;
  • insufficient support for employers; and
  • employer attitudes.

Employer attitudes have been cited as an ongoing issue which appears to stem from a lack of awareness and understanding.

A recent survey of recruiters found that 95% said companies are ‘fearful’ or ‘unsure’ about hiring disabled people. And analysis from disability charity Scope, suggests that employer attitudes haven’t improved over the last four years.

A new report from the Work and Pensions Committee found that many employers are not sure of their Equality Act duties, or are unwilling to make adjustments for disabled employees. It also suggested that there may be ‘discriminatory or unhelpful attitudes’ about the capabilities of disabled people.

Employers’ views

Indeed, employers themselves have highlighted the challenges of employing disabled people. Recent research from Disability Rights UK, which surveyed businesses from across the UK, reveals that one in 10 businesses believe they are unable to employ disabled people.

It also found that the biggest challenge to employing disabled people is that applicants aren’t always willing to be open about their disability, with around half of respondents (47%) saying that it would help if job applicants were more willing to be open about their health condition. Other challenges highlighted include:

  • fellow staff or line managers not having sufficient training to support disabled colleagues, and the lack of accessibility of some businesses for people with certain types of impairments;
  • concern that disabled people are more likely to take time off work;
  • difficulties in discussing the management of disabilities;
  • the cost of modifying equipment, making it expensive to employ disabled people; and
  • concerns that disabled people will claim discrimination if the job does not work out.

Such concerns are often misplaced, however. The survey indicates that businesses feel constrained by a lack of information about the adaptions they may need to make, and the support available to them. It seems that not enough people are aware of Access to Work, the government scheme that provides grants for adjustments to support people with disabilities or health conditions in employment.

And not all attitudes were negative. The vast majority (84%) of respondents said that disabled people make a valuable contribution to the workplace; and more than four-fifths (82%) considered disabled people as productive as non-disabled staff.

Final thoughts

The research clearly demonstrates that more needs to be done to tackle the disability employment gap. The Work and Pensions Committee report concludes that the government will stand little chance of halving the gap unless employers are fully committed to taking on and retaining more disabled people.

In particular, a transformation in attitudes to disability employment and support for disabled people will be required.

As the government’s green paper argues, “real and lasting change will only come about if we can also address negative cultural and social attitudes about disabled people and people with long-term health conditions.”


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‘Think globally, act locally’ – local job creation

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By Heather Cameron

The Local Government Association (LGA) last week called for greater devolution of employment and skills funding to councils and a ‘radical rethink’ of the way Jobcentre Plus works. Chairman of the LGA’s People and Places Board said:

“Job centres need to engage with more unemployed people for a start and then help more claimants move into sustainable employment. This is crucial to boosting local growth. Councils know best how to do this. We know our local economies, we know our local employers and we know our residents and we can bring local services together in a way central government will never be able to.”

Local solutions

Of course, local solutions for job creation and economic growth is not a new idea. Local development and job creation initiatives first emerged in the 1980s, in response to a ‘new phenomenon of high, persistent and concentrated unemployment that national policies seemed powerless to reverse on their own. Since then they have continued to spread and develop.

Although unemployment is at an 11-year low in the UK, according to recent research many countries, including the UK, are seeing widening gaps in the geographic distribution of skills and jobs. And the importance of local solutions has again been highlighted.

The OECD’s most recent edition of Job Creation and Local Economic Development argues that local development is a key tool for addressing the problem of such unequal distribution. Similarly, in its submission to last year’s Autumn Statement, the LGA argued that local government is central to the delivery of locally tailored solutions to national public policy challenges.

Boosting productivity growth, while ensuring growth delivers improved living standards and distributes the benefits of increased prosperity equally, are highlighted by the OECD as the twin challenges facing all policymakers. Underlined as a crucial but difficult task, it is argued that ‘actions originating at any single governance level or policy area will not be sufficient’.

Whole-of-government approach

The OECD report, therefore, examines how national and local actors can better work together to support economic development and job creation at the local level. In particular, it outlines what both national and local actors can do to improve the local implementation of vocational education and training (VET) and SME and entrepreneurship policies.

Among the recommendations for national actors include:

  • Design VET frameworks that allow local stakeholders to tailor training to local labour market needs while still maintaining a certain level of national consistency
  • Build the capacities needed to make VET systems more agile locally
  • Develop a strong national apprenticeship framework that builds a high quality system, includes strategically-designed incentives for employer participation, and allows for flexible delivery frameworks
  • Maximise the efficiency of SME and entrepreneurship policy delivery by allowing for local tailoring, co-locating services, using intermediary organisations to deliver programmes, and/or developing formal agreements for the division of competences and financing between governance levels
  • Develop national frameworks and strategies to support disadvantaged young people in entrepreneurship, and clearly assign responsibility for this policy portfolio to a single agency or ministry
  • Embed entrepreneurship into national education frameworks, while also providing integrated packages of entrepreneurship support in other settings to reach young people outside of the education system

Among the recommendations for local actors include:

  • Balance the need to meet pressing local labour market demands with ensuring that VET helps to move local economies to higher skilled and value-added products and services
  • Encourage VET teachers and trainers to maintain contact with local employers and industries to keep their skills and knowledge up-to-date
  • Boost employer engagement in apprenticeships
  • Tailor the delivery of apprenticeship programmes so that they work better for a broader range of employers, including SMEs, and disadvantaged populations
  • Forge connections across administrative borders in developing and co-ordinating entrepreneurship and SME policies
  • Work with organisations that have already established relationships with disadvantaged youth to maximise the reach of entrepreneurship programmes
  • To better reach disadvantaged youth, provide integrated packages of support, use hands-on learning methods, and involve entrepreneurs in programme delivery

Decentralisation?

The report concludes that local actors need both flexibility to tailor delivery of national policies to local conditions and the capacity to use this flexibility to ensure informed decision-making.

It is noted that this doesn’t necessarily mean political decentralisation, but rather ensuring the right tools are used to add local flexibility while maintaining national coherence.


If you found this article interesting, you may also like to read our previous blog on Local Enterprise Partnerships

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Beating the back to work blues

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The first journey into work after the Christmas break has to be one of the most painful journeys of the year. Overfed, possibly hungover, still angry at that sly comment your distant relative made across the dinner table a week ago, you and many others return to work at the start of January with the glow of the next set of bank holidays seeming very far in the distance (FYI the next bank holiday is Good Friday on 14th April – yes, APRIL *sobs*).

It’s no surprise then, that January is the time of the year that sees the highest rates of divorce. This is the month heralding some of the highest stress rates of the year, and is the lowest point in the calendar for many people who face daily battles with mental health. A researcher at Cardiff University, Dr Cliff Arnall has even created a formula to work out that 24th January is the “most depressing day of the year”.

Mental health takes centre stage at work

It’s therefore apt that as many of us spend much of our time at work, there has been an increasing recognition of the role of employers in supporting mental health.

In October 2016, Business in the Community published its 2016 Mental Health at Work report, which included a toolkit for employers. The report highlights the damage that concealing their condition can do to people with mental health problems, as well as the level of support that should be made available to employees to help promote positive mental health and wellbeing in the workplace.

Recommendations made in the report include:

  • Talk – Organisations and employers should break the culture of silence that surrounds mental health, particularly in the workplace by talking the Time to change employers pledge
  • Train – Organisations and employers should invest in training to ensure basic mental health literacy for all employees in all areas of the business
  • Take action – Organisations and employers should “close the gap” by asking all staff about their experiences of their own mental health at work and how any issues have been dealt with. Understanding the perceptions that staff have of how the company supports mental health generally across the organisation, can help identify steps to improve/ change practice if necessary.

Employers role in removing stigma

Ensuring good mental health in the workplace affects all levels of staff, from senior management to the newest members of staff who are still training or serving a probationary period. Multiple reports, including those by ACAS, CIPD, MIND and The Work Foundation, have stressed the importance of employers setting an example to their staff. That includes senior staff recognising when they need to take time to support their mental wellbeing too.

The Chartered Institute of Personnel and Development’s (CIPD) Absence Management Report for 2013, showed that stress is one of the biggest causes of long-term absence in the workplace. The report also showed that it impacts staff at all levels:

  • 40% of respondents said that stress-related absence increased over the past year for the workforce as a whole
  • 20% said it increased for managers
  • 1 in 8 reported a rise for senior managers
  • Only 44% would feel confident enough to disclose unmanageable stress or mental health problems to their current employer or manager.

The report suggested that if senior managers acknowledged their own mental health issues, it would remove some of the stigma associated with asking for help with mental health in the workplace. However, doing this requires a significant culture shift in how many organisations are run – which could take years. The Work Foundation, commenting on the 2016 version of the CIPD report, found that:

“Effective management of mental health in the workplace can save around 30% of costs felt by employers.  Line managers have a really important role to play in creating an environment where employees feel safe to disclose with the knowledge that the organisation will do something to help them.  Managers need to have a positive employment relationship where open and honest conversations can be had to discuss any required adjustments and provide that supportive environment.”

Using “blue Monday” to initiate conversations on mental health

This year “Blue Monday” falls on the 16th January. It may be called the worst Monday of the year, but employers are being encouraged to use the publicity around it to create opportunities for employees to discuss mental health in the workplace.

Questions to ask could be: what makes them stressed, what makes them anxious, how can the office environment be changed to improve the wellbeing of employees? There are also ideas for activities to help staff “beat the blues”, including lunchtime exercise, healthy eating and talking to colleagues about things other than work.

Specific sectors have also begun to initiate schemes to try to improve mental health and well being. Mates in Mind is a programme to be launched in early 2017 by the Health in Construction Leadership Group with the support of the British Safety Council. Modelled on an Australian programme, it is a sector-wide programme intended to help improve and promote positive mental health across the construction industry in the UK.

In social work, too, informal peer mentoring schemes have sprung up organically in many offices, with co-workers giving each other support when they need it, often in an informal capacity. More formal schemes have been set up to help social workers monitor and feel safe when talking about their mental health to colleagues and superiors. Feedback indicates that the low rate of retention of social workers is, in part, due to stress caused by secondary trauma or excessive caseloads.

 

So, as we trudge back to our desks for the first working days after Christmas, it is perhaps worth keeping some of these ideas in mind. Employers are keen to talk about mental health, but they also need the input of staff in order for them to work.

Putting some of these ideas into practice, may also go some way to improving the situation of many with hidden mental health conditions in the workplace who don’t feel confident enough to speak openly about it. We needn’t wait for the next bank holiday to improve our mood, small changes can make a big difference to wellbeing in the workplace!


Follow us on Twitter to see what developments in public and social policy are interesting our research team. If you found this article interesting, you may also like to read our other workplace mental health articles: 

Managing mental ill health in the workplace

Ending the stigma around anxiety

‘Olderpreneurs’ – the new generation of start-ups?

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By Heather Cameron

Entrepreneurs are often portrayed as bright young things launching start-ups, but does the reality of start-up demographics paint a different picture?

Changing demographics

The UK has certainly witnessed a boom in young entrepreneurship in recent years – the number of under-35s starting businesses in the UK rose by more than 70% between 2006 and 2014.

However, recent research suggests that the boom in young entrepreneurs may be waning. According to research commissioned by Google earlier this year, the majority of young people are “not interested” in starting a business, with four out of five young people surveyed saying they would rather work for a well-established company. Particular concerns were also highlighted over risk and instability.

The UK is, however, still ranked in the top 10 countries with the most favourable conditions for entrepreneurs to start and scale new businesses. And official data suggests that the UK continues to see record numbers of business start-ups, exceeding 600,000 in 2015, up on the previous two years.

So if it isn’t the younger generation heading up this record number, who is it?

‘Olderpreneurs’

Despite media coverage of the entrepreneurial spirit of the younger generation, the average age of an entrepreneur in the UK has actually been estimated at 47.

And according to the latest data from the Global Entrepreneurship Monitor (GEM), the most notable increase in entrepreneurial activity has been amongst the over 50 age group.

Referred to as ‘olderpreneurs’, this group could arguably be the new start-up generation.

There has been a 46.5% increase in freelancers over 50 since 2008, an age group that accounts for 72% of all self-employed people. According to official statistics there are around 1.8 million self-employed people over the age of 50 in the UK.

With an ageing population that is also becoming healthier, perhaps this shouldn’t be such a surprise.

Motivations

Motivations for people starting up their own businesses include redundancy, retirement, family circumstances, growing older and life stage milestones.

As life expectancy increases, many don’t want to give up work at the traditional retirement age, as they still lead active lives. Retirement has been cited as an ‘important tipping point’ for some, with the main motivation not to make money or grow their business, but rather something to keep them occupied or earn some extra money while doing something relatively easy.

The introduction of pension freedoms last year has also led to more over 50s using their pensions to fund new business ventures. The over 55s cashed in more than £4.7billion of their pensions in the first six months after pension freedoms were introduced.

Economic impact

And such activity is good news for the economy. It has been suggested that if the employment rate of 50-64 year olds matched that of the 35-49 age group, the UK economy could be boosted by £88 billion.

Older entrepreneurs have also been shown to be more successful than their younger counterparts. It has been highlighted that businesses run by owner-managers over 50 drive up revenues at their companies three-and-a-half times faster than GDP growth – 11.5% compared with 3.1%.

And older entrepreneurs create jobs at a rate more than seven times faster than the UK economic average.

It has also been suggested by the Prince’s Initiative for Mature Enterprise (PRIME) that start-up failure rates in this age bracket are remarkably low. It recently revealed that 95% of its members were still in business a year or more after starting up, compared to the national average of just 66%.

Final thoughts

A significant percentage of the UK population is past retirement age. And the number of people aged 50 to State Pension age is expected to rise by 3.2 million, while the number aged 16 to 49 will have reduced by 200,000 over the next 10 years.

As a result, keeping this group economically engaged surely has to be a priority.


If you found this article interesting, you may also like to read our previous articles on entrepreneurship and self-employment

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Who’s afraid of the big, bad robot? Preparing the labour market for a future with AI

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By Heather Cameron

Science fiction is slowly becoming science fact”. This is what the interim Chair of the government’s Science and Technology Committee said in their recently published report on robotics and artificial intelligence (AI).

While admitting there is still some way to go before we witness systems and robots like those portrayed in the creative arts such as Star Wars and Ex Machina, the report noted that there have been a series of recent advances across these fields that are beginning to have transformational impacts.

But just what will these impacts look like, particularly in relation to the labour market?

‘Transformational impacts’

Driverless cars and supercomputers that assist with medical diagnoses are highlighted as some of the transformational impacts of AI that have already arrived.  Others include improved automated voice recognition software and predictive text.

The increase in processing power, the wealth of data and the development of techniques such as ‘deep learning’ have all contributed to the recent progress.

However, the report also notes that such advances raise a number of social, ethical and legal questions that require consideration. These include issues about the transparency of AI decision-making as well as privacy and safety.

And while there is much excitement about the potential of AI to improve and enhance our lives, there is also widespread concern over the potential impact of increasing automation on the workplace.

Implications for employment

Fears over increased unemployment as a result of increasing automation are longstanding. The inquiry found conflicting views over the potential impact to the workforce, with some predicting a rise in unemployment, while others anticipate a transformation in the type of employment available.

It is likely that some occupations will become obsolete. Deloitte has warned that 11 million jobs across the UK economy are at high risk of being automated by 2036, with the retail and transport sectors most vulnerable. The research also indicated that almost 750,000 net jobs had been lost in manufacturing since the turn of the millennium, while the wholesale and retail sector saw net job losses of 338,000.

However, it was noted that millions of new roles had also been created in order to meet changing demand. So perhaps it is adaptation within the workforce that is needed.

Indeed, the Committee’s report highlights a need to focus on delivering the skills needed for people to adapt and thrive as new technology continues to emerge. It has been argued elsewhere that cognitive and social and behavioural skills should be made a priority in any skills strategy for the 21st century to “make workers more resilient to technology-driven labor market shocks like automation.”

And of course some sectors may be more susceptible than others.

Recent research by McKinsey suggests that the impact of automation differs dramatically across sectors and activities. It found that:

While automation will eliminate very few occupations entirely in the next decade, it will affect portions of almost all jobs to a greater or lesser degree, depending on the type of work they entail. Automation, now going beyond routine manufacturing activities, has the potential, as least with regard to its technical feasibility, to transform sectors such as healthcare and finance, which involve a substantial share of knowledge work.”

Another common theme highlighted throughout the inquiry was that robotics and AI could increase productivity and efficiency. One recent study estimated that ‘£1.24bn in automation investment could raise the overall value added by the manufacturing sector to the UK economy by £60.5bn over the next decade’.

Future

There are clearly many debates about the potential impact of robots and AI, but it is not yet clear what the actual impact of advances in these fields will be on the labour market.

What is clear is that there is a need for skills to be developed for a world where AI is more prevalent.

But as the inquiry highlighted, the government doesn’t yet have a strategy for developing these new skills or responding to the social and ethical issues it poses. The report therefore recommends that “the government must commit to addressing the digital skills crisis through a Digital Strategy, published without delay.”

Perhaps the future will be similar to the past, as written evidence to the inquiry suggests:

During the industrial revolution, mechanisation did not change long-run equilibrium employment because new jobs emerged which were unimaginable at that time. Similarly, jobs lost to automation today might be replaced by jobs we cannot yet imagine.


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The pros and cons of the gig economy

By Heather Cameron

The ‘gig economy’, also described as the ‘sharing economy’, ‘collaborative economy’ or ‘on-demand economy’, has grown rapidly in the UK, a trend that is predicted to continue amid post-Brexit uncertainty.

A new study from the McKinsey Global Institute suggests that work in the gig economy is even more widespread than official data suggest, with 20-30% of people in the US and UK working independently. And while the report suggests the majority of these workers are participating in the gig economy by choice, a sizable minority are there reluctantly.

So what exactly is the gig economy and what are its benefits and drawbacks?

What is the gig economy?

The gig economy comprises enterprises such as Uber, the driver hire app, Airbnb, the accommodation-sharing platform, and Deliveroo, the online food delivery company. These enterprises enable people to use digital platforms to buy services from, and sell services to, each other.

A recent PwC study identified five key sectors within the gig economy:

  • peer-to-peer accommodation
  • peer-to-peer transportation
  • on-demand household services
  • on-demand professional services
  • collaborative finance

People that work in the gig economy, as described in the McKinsey report, are independent workers, rather than employees. Three key features of these workers have been identified:

  • a high degree of autonomy
  • payment by task, assignment, or sales
  • short-term relationship between the worker and the customer

Growth

The UK has seen higher growth in the gig economy than the rest of Europe, partly due to the recent establishment of London as a global financial technology (FinTech) hub. Transactions reached £7.4bn in 2015, almost double the previous year.

The number of jobs in the online gig economy advertised by UK employers increased by 14% between May and September, according to the Online Labour Index. This is around double the 7.5% rise elsewhere in Europe, and 6% in the US.

The McKinsey research estimates that there are up to 162 million independent workers in the US and Europe combined. The number of people classified as self-employed in the UK has grown by 47% since 2000, while the number of employed has risen by just 13% over the same period.

Pros

Supporters of the gig economy argue that it enables more people to participate in the labour market by providing flexible working, provides opportunities for the unemployed and could increase productivity.

Indeed, flexible working has proven very popular among the working population as more seek to achieve the perfect work-life balance. Those surveyed for the McKinsey report who chose independent work, reported greater satisfaction with their lives than traditional workers. They were more engaged in their work, and relished the chance to be their own boss and have more control over their hours. Even those working independently out of necessity reported being happier with the flexibility and content of the work they do, although they were less satisfied with their level of income and income security.

Both consumers and organisations can benefit through greater availability and accessibility of services and improved matching that better fulfils their needs.

And there is also the benefit of minimal cost. Digital business models have lower transaction costs for consumers, and organisations can keep costs down by using independent service providers only when they need them.

Nevertheless, challenges exist.

Cons

While there are more people in work than ever before, due in large part to the increase in self-employment, and despite the high levels of satisfaction among independent workers overall, there are concerns over job insecurity and low income.

Those working in the gig economy do not enjoy the same rights and protections as employed workers, such as health benefits, overtime pay and sick leave pay.

The TUC has highlighted that the increase in self-employment has not been driven by a boom in entrepreneurship but, instead, workers are increasingly forced by employers to accept precarious employment with low pay.

Deliveroo has recently come under fire from workers over their employment practices in relation to the minimum wage. And Uber is involved in an employment tribunal where drivers have contested their status as self-employed, suggesting they should be entitled to a range of benefits such as pension contributions as well as holiday and sick pay.

In a bid to address concerns about the lack of rights held by people working in the gig economy, Theresa May has recently appointed a former adviser of Tony Blair to head a review into employment rights across the new economy.

But this will be no easy feat, as the rapid development of the gig economy poses significant challenges for policy makers and regulators to keep up.

Final thoughts

As the McKinsey report argues, “expanding economic opportunities and income security policies for this group should be a priority”. Hopefully the review of employment rights will mark the first step in the right direction.


If you enjoyed reading this, you may also be interested in our previous blog on ‘the self-employment boom.

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Equal to the task? Addressing racial inequality in public services

huddleCLR

Throughout October, a series of events to promote diversity and equality will take place as part of Black History Month. Although there are many achievements to celebrate, it is an unfortunate fact that many people in the UK today still experience disadvantage due to the colour of their skin.

Over the summer, reports by the Equality and Human Rights Commission (EHRC) and the UN Committee on the Elimination of Racial Discrimination (CERD), found that racial inequality in the UK was ‘worryingly high’.

In its biggest ever review of race inequality in the UK, the EHRC concluded that:

“while for certain people life has become fairer over the past five years, for others progress has stalled and for some– in particular young Black people – life on many fronts has got worse.”

Audit of racial disparities announced

The government responded quickly by announcing an audit of racial disparities in public services. It promises to ‘shine a light on injustices as never before’.

From summer 2017, Whitehall departments will be required to identify and publish information annually on outcomes for people of different backgrounds in areas such as health, education, childcare, welfare, employment, skills and criminal justice.

As well as enabling the public to check how their race affects the way they are treated by public services, the data is also intended to help force services to improve.

The audit is being called ‘unprecedented’ – and it certainly is – up until now, public services in the UK have not systematically gathered data for the purposes of racial comparison. Indeed, according to the FT, very few countries, if any at all, currently produce racial impact audits.

‘Worryingly high’ levels of racial inequality

The audit will have its work cut out.  The review by the EHRC found that, compared to their White counterparts, people from ethnic minorities were more likely to be:

  • unemployed
  • on low wages and/or in insecure employment
  • excluded from school
  • less qualified
  • living in poverty
  • living in substandard and/or overcrowded accommodation
  • experiencing mental and physical health problems
  • in the criminal justice system
  • stopped and searched by police
  • a victim of hate crime
  • a victim of homicide

Institutional racism

Similarly, the CERD findings into how well the UK is meeting its obligations under the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD) raised serious concerns about the level of institutional racism in UK public services. Omar Khan, of the Runnymede Trust, suggested that the findings would ‘embarrass the UK on the world stage’.

Longstanding inequalities in access to services, the quality of care received and patients’ health outcomes were criticised, as was the over-representation of persons belonging to ethnic minorities in psychiatric institutions.

The committee echoed the EHRC’s concerns regarding higher unemployment rates and the concentration of persons belonging to ethnic minorities in insecure and low-paid work.  They also criticised the use of discriminatory recruitment practices by employers.

In education, there were concerns regarding reports of racist bullying and harassment in schools, and the lack of balanced teaching about the history of the British Empire and colonialism, particularly with regard to slavery.

The committee also concluded that there had been an outbreak of xenophobia and discrimination against ethnic minorities, particularly since the EU referendum campaign.  Indeed, the rise in post-Brexit racial tensions has been widely acknowledged.

Equal to the task?

Although the audit has been welcomed by many, including the EHRC, others have raised concern about the extent to which it will tackle the root of the problem.  Danny Dorling, of Oxford University, remains sceptical, stating that “within two or three years every single one of these audits is forgotten”.

Some have noted that in order to be effective, the audit will also have to capture outcomes for migrant families, and for poorer White people, who also suffer from discrimination and disadvantage.  Others, including Labour’s Angela Rayner, shadow equalities minister, have noted that there is a ‘huge gap’ in the review as it would not include the private sector.

The EHRC have called upon the government to createa comprehensive, coordinated and long-term strategy to achieve race equality, with stretching new targets to improve opportunities and deliver clear and measurable outcomes.”

Certainly, the data produced by the racial equality audit may well provide some basis for the establishment of such targets.

So while this October there is cause for celebrating the progress made so far, the findings of the EHRC and the CERD underline just how entrenched and far-reaching race inequality remains.  As the EHRC states:

“We must tackle this with the utmost urgency if we are to heal the divisions in our society and prevent an escalation of tensions between our communities.”


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Are councils embracing an agile future … or is it cost-saving without the transformation?

By Heather Cameron

An increasingly diverse working population means that more people require and expect enhanced flexibility to help them balance their lives at work and at home, manage a range of different caring responsibilities and transition into retirement, for example, by reducing hours or through adaptations to how they work.” (CIPD, 2014)

The needs of the workforce is changing. No longer is nine to five office working the norm as more and more employees expect flexible working environments.

According to the CIPD, these changing needs, combined with the fast pace of economic change, require organisations to adopt more agile working practices. And this applies to both the public and private sectors.

What is agile working?

The concept of agile working refers to a way of working that incorporates time and place flexibility. It enables employees to work where, how and when they choose, subject to business needs, in order to improve work/life balance and maximise productivity. It is a move away from the reliance on the office location towards a culture that incorporates remote working and more dynamic office spaces.

The Agile Future Forum defines agile working practices along four dimensions:

  • Time: when do they work? (e.g. part-time working; staged retirement)
  • Location: where do they work? (e.g. people working across multiple sites)
  • Role: what do they do? (e.g. multi-skilling)
  • Source: who is employed? (e.g. using contractors or temps)

In addition to offering practical solutions to help improve the work-life balance of the workforce, agile working can also provide the opportunity to reduce and control operational costs. One of the biggest costs for any organisation, whether in the private or public sector, is the fixed costs associated with buildings and furniture.

As local government finances continue to be squeezed, councils face an ongoing dilemma of having to try and reduce costs while maintaining service delivery. So perhaps agile working is a way of achieving this.

Cost savings?

 As a recent briefing paper on agile working in the public sector has highlighted, it is no surprise that the public sector estate should be earmarked for cost savings and reform, given its vast scale. The local government estate consists of over 180,000 buildings, with a value of £250 billion and annual running costs of £25 billion.

Council offices are also often housed in old inefficient buildings that are often located in prime real estate sites that could be sold for redevelopment. “They have become valuable assets that are ill-suited to their current purpose.”

And many of these buildings are underutilised. According to the briefing paper, the majority of local government buildings have a desk occupancy rate of 45% and a meeting room occupancy rate of 60% – meaning that there can be as many as 297,000 empty desks on any given day and numerous underutilised meeting and conference rooms.

It is therefore no wonder we have seen a move by councils to introduce agile working in recent years.

Agile working in local government

Earlier this year, it was reported that Angus Council plans to invest £2.2 million in two buildings to promote agile working among its staff. This forms part of the council’s plans to close 32 offices in a bid to save almost £5 million a year from its budget.

Head of technical and property services at Angus said:

“The investment in works and furniture will provide modern office environments to support staff adopting new ways of working aligned with the agile culture, while reducing the council’s existing estate portfolio.”

In 2013 Monmouthshire Council opened a new £6 million headquarters with only 88 desks for 200 staff. The new office was created to help facilitate the council’s agile working policy and reduce costs.

Lambeth Council is moving from 14 operating sites to just 2, with a 10:6 desk ratio. The council’s flexible working strategy aims to help reduce its real estate costs by £4.5 million per year.

It has been argued that the main catalyst for change across councils has been the creation of the government’s One Public Estate initiative, launched in 2013.

Under the initiative, councils in England have freed up land for around 9,000 homes and created 20,000 jobs. It is expected that the councils involved will raise £129 million in capital receipts from land sales and cut running costs by £77 million over 5 years.

Final thoughts

The potential cost savings from agile working would seem undeniable. But does the adoption of agile working in local government represent true transformation?

Of course, it is more difficult to embed a shift in culture change within an organisation than it is to merely convince people that agile working is beneficial. Nevertheless, the success stories from Timewise Councils suggest that transformation is happening.


If you enjoyed reading this post, you might like our previous post on flexible working.

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