Working longer – the reality ‘behind the headlines’

Senior businessman in office working on laptop

By Heather Cameron

With no shortage of headlines highlighting the record employment rate in the UK, and the increasing number of older workers widely reported, it may seem that the outlook for the ageing workforce is a rosy one. But do these headlines hide the reality?

Recent analysis from Age UK argues that the headline employment rate doesn’t tell the whole story about working longer, “making it an insufficient – and even misleading – tool for public policy decision-making”.

The statistics

The most recent official figures show that the employment rate (the proportion of people aged from 16 to 64 who are in work) is the joint highest since comparable records began in 1971, at 74.8%, while the unemployment rate is the joint lowest since 1975.

Data also shows that the employment rate for people aged 65 and over has indeed increased since the 2008 recession. It is currently at 10.4%, up from 7.3% in 2008.

Age UK has also recognised the increase in employment rates for older people, noting that, in fact, the older the age group, the greater the increase in employment. However, the average number of hours worked has declined since the recession, indicating a more complex and perhaps less reassuring situation than the one portrayed in the media.

The biggest drop was for 50-54 year old men, whose average hours declined by 29%. For men aged 60-64, the average number of hours declined by 8 hours (over 22%), while women aged 50-54 experienced a fall of 18%.

The only age group not to see a decline was women aged 60-64, which is likely to be as a result of the raising of the State Pension age.

Choice or necessity?

The change in the State Pension age was justified on the grounds that it gave people more choice and more scope to continue working if they wished to.

A recent CIPD survey found that the most common reason for wanting to work past 65 is that employees believe it will help keep them mentally fit, followed by wanting to be able to earn a sufficient income to continue to do the things they enjoy.

As Age UK suggests, it may be that the reduction in working hours is a good sign if it is due to older workers choosing to wind down their hours, maybe to enable them to juggle other responsibilities such as caring for their grandchildren, while still earning a wage.

However, the research suggests it may be less through choice and more as a result of the changing labour market such as increasing underemployment (working less hours than they would choose to) or increasing insecure working practices driven by the rise in self-employment and the ‘gig economy’.

As it is likely working fewer hours will mean less income, this could be a cause for concern since it will be more difficult for older workers to maintain their standard of living until they meet the State Pension age and for them to save enough for retirement.

Another issue highlighted by the CIPD, is that most employees don’t believe their organisations are prepared to meet the needs of the over 65s, suggesting that there is a need for employers to also review their practices in terms of managing older workers.

Final thoughts

It is clear that while, for some, choosing to work beyond the traditional retirement age will be a lifestyle choice, for many it will be a necessity. Any substantial reduction in working hours for these older workers could consequently pose a real issue.

It would therefore make sense for policy makers to heed the warning from Age UK not to rely on the headline rate of employment for older workers, and rather look beyond it to the reality of many struggling to get and keep the secure, well paid jobs they want and need.


If you enjoyed reading this, you may be interested in reading our previous post on the pros and cons of the gig economy.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

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.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

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.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The next big thing in management and organisational development … why your organisation should be considering reverse mentoring

A jigsaw of a handshake being completed ny two hands.

Think of the modern workplace and a number of features may spring to mind: technological innovations, flexible and remote working, to name a few. However, a more social factor is also at play: the multigenerational workforce. For the first time in history, it is now feasible that a workforce could comprise employees from four different generations, i.e. the World War II Generation (born 1929-1945), Baby Boomers (born 1946-1964), Generation X (born 1965-1979) and Generation Y/Millennials (born after 1980).

The characteristics of a generation

In 2012, Ashridge Business School identified that Generation Y (Gen Y) has grown up in an environment that is very different to previous generations. Additionally, their survey of managers from around the world found that Gen Y:

  • comes to the workplace with different skills;
  • is motivated by different things;
  • thinks differently about learning and development; and
  • approaches work relationships differently.

As noted by Steve Regus, writing for HR magazine in 2012, Gen Y also take a less hierarchical attitude towards work, and place a high importance on mentoring and feedback. The trick, according to Regus, is for organisations to utilise the strengths of this diverse workforce to their advantage, by creating opportunities to learn from each other.

The technological benefits of reversing

One way that some organisations have approached this is through reverse mentoring. Rather than following the usual path of older, more senior employees being assigned a newer colleague to mentor, reverse mentoring (unsurprisingly) sees younger or newer employees sharing their knowledge with company stalwarts. An early champion of this strategy in the 90s was Jack Welch, then CEO of General Electric. Welch recognised the importance of capitalising on the skills of the company’s younger employees, and instigated an initiative that saw older employees learn how to use Netscape. Today, reverse mentoring is commonplace in global companies including Microsoft and Cisco.

Technology is an area in which reverse mentoring is particularly valuable. Having grown up in an age of constant technological change and development, Gen Y are ideally placed to offer insight into how technological innovation can benefit an organisation and its processes. Crucially, technological innovation has also opened up the possibility of working more flexibly, something that is highly valued by Gen Y employees. Senior employees who have taken part in reverse mentoring programmes have also highlighted gaining an insight into the potential benefits of flexible working as one of the positive outcomes of developing a mentoring relationship with a younger employee. Thus, opening up this dialogue between generations can potentially diffuse conflict between the traditional 9-5 generations and the less hierarchical Gen Y.

A two-way street

In practice, reverse mentoring has been found to be less ‘teaching an old dog new tricks’ and more of an exchange of information and experience. At General Electric, one of the most basic benefits for the young mentors was simply the ability to gain contacts in the upper echelons of the company. The mutual benefits of the relationship can also be seen in terms of the insight it offers each party. The older participant gains in terms of gaining new perspectives on the company’s industry, and the thinking of its workforce, while the younger gains a better understanding of the company’s strategies and objectives, and becomes better placed to recommend actions or technologies that may support these.

Reverse mentoring – how to do it

In 2013, Boston College’s Sloan Center on Aging and Work published an evaluation of the implementation of a reverse mentoring initiative by The Hartford, a leading US insurance company. The company’s CEO had identified a need for the company to become more confident in its use of digital technologies, particularly social media, and recognised that its younger employees were best placed to drive this forward. Following a successful initial pilot that went onto become a national initiative within the company, The Hartford highlighted the following factors as crucial to the success of any reverse mentoring programme:

  • the creation of a project timeline;
  • identifying the business objectives – link the reverse mentoring programme to what the business is trying to achieve as far as possible;
  • ensure that mentors are fully informed of what mentees are expecting to get out of the exchange;
  • making sure the initiative has clear agendas and timelines;
  • using the mentor role as a way of keeping younger employees motivated; and
  • encourage both mentors and mentees to be open to the relationship and gaining new knowledge, and to respect that each other approaches learning differently.

The final point is echoed by the majority of companies who have used reverse mentoring within their organisation. Initially, Cisco had issues around more senior employees adapting to younger employees’ more informal way of working. As they, and other reverse mentoring adoptees have discovered, though, the key is commitment to the programme, in recognition of the value it can bring to the business.


Follow us on Twitter to see what developments in policy and practice are interesting our research team.

Further reading: if you liked this blog post, you might also want to read Heather Cameron’s post on how entrepreneurship drives growth in the UK.

Supercommuting: is it worth it?

crowd rush on the london tube

By Rebecca Jackson

In recent years there has been a surge in the number of people in the UK being classed as ‘supercommuters’ – people who travel more than 90 minutes to work each day. And figures from the TUC published last week suggest that over 3 million of us now have long daily commutes of two hours or more, a rise of 72% in the last decade.

Rising rent, the London-centric nature of the British economy and the desire to maintain a healthy work-life balance have all been cited as factors which have contributed to this mass commute which millions of us, myself included, go through every day.

Reliance on commuting for ‘better job’ opportunities

In a recent survey it was found that accountants have the longest average commute, at 75 minutes, with IT software developers next at 65 minutes. The shortest average commute belongs to those who work in the retail and leisure industries, who have commute times of between 20-30 minutes respectively.

A recent IPPR report suggested that commuting, or more specifically the lack of ability to commute, was resulting in many job-seekers remaining out of work. As a result, a reliance on commuting for ‘better jobs’ was limiting the growth of the British economy, particularly in areas outside of London.

Commuting, and the resulting inflexibility this gives many jobs, can also be a barrier to many women, particularly those with families or caring responsibilities, taking on roles which are higher paid or higher up the ‘corporate ladder’, including more senior roles in company structures and professions such as accountancy and law.

The costs of supercommuting

So how realistic is a ‘supercommute’ in terms of cost, and in terms of family life and commitments … and is it worth it?

I calculated the cost and time it would take to commute to London from 4 cities: Manchester, Edinburgh, Belfast and Barcelona (I chose Barcelona because I know someone who did it for a year!).

The scenario I used was for an individual who works full time in an office in the City of London, within walking distance of Liverpool Street Station. All prices shown are averages and will fluctuate depending on proximity to amenities, time of booking transport etc. This information also does not take into account the cost of living more generally, food, utilities, socialising etc.

Untitled 2*Average time, without excessive traffic or delays, for flights includes check in and transfer to Liverpool Street
** Northern Irish “Rates” are slightly different to council tax
*** For a 1 month Zone 1-6 Oyster card OR to fly from MAN; EDI; BFS; BCN to STN and get the Express to Liverpool Street, 3 days per week, returning each night.

The figures seem to show that cost wise, it’s true, supercommutes can save you money if travelling means that you can take a higher wage or better job.

Work-life balance

People who supercommute, while grateful for the better lifestyle it gives them and their families on days off, often highlight how long commutes, which often mean significantly longer working days, impact on their relationships, their health and require significantly more commitment and energy from them as individuals than a ‘normal 9-5 job’ would. An individual’s personal well-being can often be hugely affected by extreme commuting times.

Statistics have also shown that people who supercommute, who have a wife or partner who doesn’t commute with them, or doesn’t undertake a similar length of commute of their own, have a higher rate of divorce and/or separation. And those with children reported stressed and difficult relationships with them too.

Studies have also shown that its not all about the money, and that to equate monetary value to distance commuted, you would need to be offered a pay rise of 40% to compensate for the detriment caused in other areas of life by an extra hour’s commute.

Another factor influencing how realistic supercommuting is as an option for employees, is the willingness of the company, and the ability of the job, to be flexible. Many people who are interviewed, or used as successful case examples of supercomputing, work in jobs where they can work remotely for part or all of the time.

And as you can see in my example above, it is based on the understanding that those commuting from outside London are only doing so on a 3 day week basis, with a view that they would work remotely from home on the other two days. Not all jobs can facilitate this, and neither can all employees.

Is it worth it?

Supercommuting can, therefore, be a way to save money, and offer improved quality of life, enabling people to live closer to family or in the countryside. However it comes at a potential cost to social life and relationships, and to personal well-being in terms of physical and mental health.

Sadly it’s not all afternoon strolls or sangria weekends on a beach in Barcelona, although this can be part of it. It takes commitment to the job and the commute itself and a regular reassessment of the question of “is it actually worth it?”

And, unfortunately for many, supercommuting is no longer a choice, but a situation forced on workers by the state of the housing or employment markets.


Follow us on Twitter to see what developments in policy and practice are interesting our research team.

Further reading: if you liked this blog post, you might also want to read Donna Gardiner’s post on remote working

Sharing the caring – tackling the cultural and financial barriers to Shared Parental Leave

Baby hand in father's palmBy Donna Gardiner

New Shared Parental Leave legislation came into force in England, Scotland and Wales on the 1st December 2014.

The legislation provides much greater flexibility in regards to how parents care for their child over the first year of his or her life. Specifically, a new mother can opt to curtail her maternity leave (subject to a minimum of two weeks), and have the child’s father or her partner take any of the remaining weeks as Shared Parental Leave.

Anticipated uptake and impact

The aim of the legislation is to encourage more men to share childcare, drive greater gender equality in the workplace, and eliminate discrimination around maternity leave. The government estimates that around 285,000 couples will be eligible to share leave from April 2015, and that take up will be around 8%.  However, it is not clear whether significant numbers of fathers will take up Shared Parental Leave in practice.

On one hand, there does appear to be evidence that fathers will welcome the new proposals. Research conducted by Working Families found that many fathers wanted to increase the amount of time they spent at home with their children. Indeed, many fathers, particularly those in the 26-35 age group, felt resentful towards their employers because of their poor work-life balance.

These findings are echoed by the IPPR, which found that one in five fathers wanted to change their working patterns, and another one in five wanted to spend more time with their baby, but couldn’t because of financial or workplace reasons. Another report found that over half (57%) of fathers working full time wanted to reduce their hours to spend more time with their children.

Cultural and financial barriers

However, despite the apparent desire among fathers to spend more time with their children, considerable barriers remain. Continue reading

Learning to manage remote workers effectively

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by Donna Gardiner

As of last month, all employees with at least 26 weeks’ continuous service will have the right to make a request to their employer for flexible working under new Flexible Working Regulations.  Previously, the right to request flexible working was restricted to only those with children and certain carers. Continue reading