Creating a positive career culture for low wage work could boost productivity

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Posted By Anna Kharbanda

05 February 2014

Under embargo: 00.01hrs 05 February 2014  

Improving how low wage, low skilled jobs are designed, such as contact centre work, could boost UK productivity. Recent studies show that 80% of the 587,000 new jobs created in the UK are primarily in low wage work*, and the UK is less productive than other OECD countries such as Germany, France, the USA and Spain**. However, according to a report published today (5 February 2013) by The Work Foundation, small investments in employee engagement for low wage, low skilled workers could see a further £49 billion contributed to the UK economy (the equivalent of 3% GDP) and help reduce sickness absence.***

 

The absenteeism rate in the UK currently costs £13.4 billion a year to the UK economy. Recent studies show that disengaged employees are almost 3 times more likely to call in sick to work (taking 6.19 days off work per year, as compared to 2.96 for engaged employees). Disengaged employees are also 4 times more likely to leave their organisations than engaged employees. This can be a particular problem for workers who have moved down the labour market into low wage, low skilled jobs and are unable to make the best use of their skills.****

 

Today’s report, Constrained work? Job enrichment and employee engagement in low wage, low skilled work reveals that a 10% increase in funding for strategies to improve employee engagement, such as participation in business development and career progression, could increase company profits by £2,700 per employee, per year.***** As recent studies reveal only 39% of employees feel engaged in their jobs, these findings could significantly boost UK productivity and improve staff retention in low wage, low skilled work.******

 
Professor Stephen Bevan, director for the Centre for Workforce Effectiveness at The Work Foundation said: “We know that underemployment has increased by one million since the start of the downturn, and the labour market for low wage, low skilled work is likely to continue growing."

 

He added: "Contact centre work especially has one of the highest labour turnover rates in the UK, and sick leave for this sector alone costs the UK economy £626 million per year. These roles often have standardised work methods and lack of development opportunities. Many workers who have moved into this sector do not view their employment as a career option. Creating a career culture in this sector, by implementing training and development or shared leadership for problem solving, could have a real impact on productivity.”

 

The full list of recommendations for employers in the report include: introducing performance rewards  an emphasis on training, development and career progression; employee participation in business development and team work; and flexible working. 

 
Ends
 
Notes to editors

 

1. Professor Stephen Bevan, director for the Centre of Workforce Effectiveness is available for interviews, briefings and written comment. The report, Constrained work? Job enrichment and employee engagement in low wage, low skilled work, by Emily Anderton and Stephen Bevan is available from the press office in advance, or can be downloaded from www.theworkfoundation.com from 00.01hrs on 5 February 2014. 

2. The Work Foundation aims to be the leading independent, international authority on work and its future, influencing policy and practice for the benefit of society. The Work Foundation is part of Lancaster University – an alliance that enables both organisations to further enhance their impact.

3. *The figure which reveals 80% of the 587,000 new jobs created are primarily in the low wage sector of employment is taken from Trades Union Congress [TUC] (2013, July 12). Four in five jobs created since June 2010 have been in low paid industries -  http://www.tuc.org.uk/economy/tuc-22364-f0.cfm

4. **The OECD analysis is from the Organisation for Economic Co-operation and Development [OECD]. (2011). Labour productivity levels in the total economy. Retrieved from http://stats.oecd.org/index.aspx?DatasetCode=LEVEL

5. ***The calculation of a further £49billion (3% GDP) could be contributed to the UK economy if small investments were made in employee investment is taken from

Engage for Success (2013). Disengaged Retail Workforce Costs UK £628 Million a Year. Retrieved from: http://www.engageforsuccess.org/disengaged-retail-workforce-costs-uk-628-million-a-year/



6. ****The data for the sickness absence figures of disengaged employees (6.19 days for those disengaged, as compared to 2.96 for those who are not) is taken from The Confederation of British Industry [CBI]/AXA. (2007). Attending to absence: Absence and labour turnover survey 2007. London: CBI.

7. *****The saving of £2,700 per employee is taken from Engage for Success (2013). Disengaged Retail Workforce Costs UK £628 Million a Year. Retrieved from: http://www.engageforsuccess.org/disengaged-retail-workforce-costs-uk-628-million-a-year/


8. ******Recent studies reveal that only 39% of staff are engaged in their jobs. This figure is taken from CIPD, 2012 Employee Outlook series. Retrieved from https://www.cipd.co.uk/binaries/5923%20Employee%20Outlook%20SR%20(WEB).pdf

9. Professor Stephen Bevan will be leading an exclusive roundtable for partners of The Work Foundation on Wednesday, 26 February 2014 looking at the benefits of, and challenges to, creating engaged workforces and exploring job enrichment strategies.

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