HR guru says Starmer should think big in union talks

The 1978/79 Winter of Discontent – and the heavy election defeats that followed – continue to cast a heavy pall over the Labour party.

Hardly a surprise, given the period was a near death experience for the party.

The trouble is, Labour’s folk memory now risks actually harming the British economy if, as reported, the party bows to ‘business pressure’ and further dilutes its employment rights package.

‘Union bosses’ are reportedly to meet Labour leader Sir Keir Starmer today (Tuesday 14 May) to voice concern about recent media stories.

He would do well to listen – particularly if they make the broader case that secure jobs for well-trained workers benefit their members, the British economy and UK PLC.

Where it was once industrial strife that plagued British industry, it is now chronic, sluggish productivity. While many ingredients have been stirred into that toxic stew, short-term thinking by policymakers, businesses, bankers and investors is the most important. Businesses have under-invested in plant and people for decades.

Business leaders have stumped up hard cash for the chance to bend the ear of shadow chancellor Rachel Reeves over a glass of warm white wine. That money would be better directed to developing a well-trained and content workforce with job security.

Last month, on the 25th anniversary of the introduction of the minimum wage it was largely hailed as that rarest of things – an unqualified post-war policy success. Most also noted it was preceded by predictions of a jobs Armageddon; warnings that we can see now were just so much Pre-Millennial Tension.

In the closing years of the last millennium and, it seems, in 2024, the often furtive lobbying by business leaders betrays a bleak-zero sum game and a crass binary approach to business management. It is an approach that believes any employee benefits must hit profits and that mightiest of gods, shareholder value, and the need for short term returns.

Owners and managers focus on cost cutting and paring to the bone all labour costs rather than the long term investment in workers and the machinery or systems they need to work most efficiently. Providing job security, decent working conditions and fair pay often delivers a well-motivated and loyal workforce. Such employees are more likely to work with managers to boost their employers’ fortunes, safe in the knowledge that, ultimately, they too may well benefit.

In place of strife

There is plenty of research evidence that employers who make a comprehensive employment offer which includes training and decent pay and conditions have low staff turnover rates and better productivity. It is even fair to say that such employers benefit from ‘efficiencies’ – a much abused word used as a fig leaf for cost-cutting. These efficiencies, however, take the form of improved recruitment and retention, for example.

Saving British industry from itself?

Too often the business leaders who get to engage with policymakers seem to believe that managers and leaders always want the short term and ‘easy’ route to profits. That can hit those employers who actually do want to engage in long term thinking and investment in plant and people. They want to win market share through virtues such as great customer service provided by motivated employees. Those efforts are undermined by competitors focussed ruthlessly on price and resulting in a bleak ‘race to the base’. That narrow focus must taint the culture of the business.

A generation ago, the then Conservative environment secretary Lord (Michael) Heseltine taunted shadow chancellor John Smith and his shadow Treasury team for embarking on a “prawn cocktail” offensive around the City of London and business groups.

Reaching his oratorical peak, he declared: “Never have so many crustaceans died in vain. With all the authority that I can command as Secretary of State for the Environment, let me say…‘Save the prawns’.”

Today, we needn’t worry about the prawns. We do, though, need to save British industry from itself and its more blinkered, debased instincts.