‘You can’t get the staff these days!’ Or the workforce planners and human capital investors..

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18 Aug 2022

Dr Duncan Brown, Principal Associate

Follow @duncanbHR

‘We’re sorry but…’

Like me, you are probably both enjoying and suffering from the summer boom in demand that our service sector businesses are experiencing at the moment. It is wonderful after the nightmare of Covid to be able to go abroad on holiday, physically to shop and buy new stuff and eat and drink in nice restaurants.

But not so wonderful that it took me 36 hours instead of three on a nightmare journey back from Sicily on EasyJet, and my flight out of Heathrow next month has already been cancelled. Or that getting up to the Lake District on Avanti trains later this month is looking to be a logistical nightmare after they just announced major cuts to their regular timetable. Or that Boots in Twickenham was shut for three hours in the middle of the day on Friday. Or that I got chucked out of Pret a Manger when they shut early, mid-afternoon, one day last week.

‘You can’t get the staff…’

But who is to blame for the service disruptions? Why the workers of course! And with record low unemployment and record high vacancy levels, it’s the lack of them. As Brooke Masters noted in the FT last week, on how service businesses are struggling to adapt to a demand strong/labour short economy, ‘corporate executives universally blame the problems on (lack of) staff'. Avanti blamed (unofficial) striking rail workers, Sharon White Waitrose’s chief executive cited the ‘great retirement’ of the over 50s, who left the labour market during Covid and haven’t returned.

The airports and airlines seem to be all blaming each other, as well as the staff shortages and competition from better paying employers such as Amazon. What appalling underhand tactics, actually paying staff higher wages! The CEO of Qatar Airways who sits on Heathrow Airport’s board even expressed the hope that it will become easier to recruit again once unemployment increases:‘The only way we will get out of it is when people realise they have to get out of their home and back to their jobs and work to earn.’

The growth in aggressive and violent behaviour from customers being suffered by front-line workers at the moment is perhaps one of the worst and less-reported aspects of these disruptions to our daily services.

Planning and paying, or cutting?

But hang on a minute, couldn’t some of this booming demand have been foreseen once the economy opened up again after Covid? And the staff shortages too, given that the Brexit vote occurred in 2016 and unemployment was already at a record low of 4 per cent in 2019? Might executives and management, perish the thought, have done a bit of workforce planning, perhaps improved pay and conditions, trained more of their own people rather than hiring them in, and acted to address this situation earlier?

Pret a Manger’s dispute followed a proposal to cut store bonus opportunities by 50 per cent. Cutting sick pay benefits, a common employer and HR cost-reduction measure in the 2010s, looks pretty dumb when a global pandemic strikes.

We might also now question, as Professor Ewart Keep at Oxford University did recently, whether the cuts in employer training days, representing a fall of 60 per cent since 1997, has really been a sensible workforce supply strategy?

On the railways, according to railway engineering expert Gareth Dennis, ‘large-scale cancellations by Avanti owe more to a dysfunctional (staffing) model than unofficial strike action.’ Apparently cost-driven staffing models have been so tight that 20 per cent of services were being staffed by drivers voluntarily on overtime.

As for retail workers, as Yvonne Roberts notes, if the over-50s have experienced a decade of worsening pay and conditions in many sectors, then no wonder so many have jumped at the first possible opportunity to call it a day.

In aviation, airlines have outsourced as many parts of the business as possible, producing a complex web of business and labour inter-relationships. If an unexpected crisis hits, then as Philip Georgiadis notes:

’When one link in the chain fails — and each part of the industry has suffered staffing problems this year — the fine margins airlines run on tend to break down. Airlines have blamed disruption on ground-handlers, for not having enough workers. But frustrated executives in those companies say these airlines have for years squeezed margins on the contracts they offer.’

BA cut around 10,000 of its 42,000-strong workforce during the pandemic despite the operation of the furlough scheme, a move described as “wanton destruction” by a UK parliamentary committee. Yet many of its rivals took similar steps.

Ryanair on the other hand, hardly represented in the media as a leading exponent of HR management, made the decision not to lay off any staff (though it did cut salaries - now restored). It has been rewarded in being able to deliver a rapid return of passengers without any need for flight cancellations, leading to a rapid return to profits this year.

The hopes for better pay and planning

Other employers appear to be getting the message now on better pay and workforce planning. BA for example has recently awarded its check-in staff and refuelling workers a 13 and 12 per cent pay rise respectively and currently are offering a £1,000 signing-on bonus for new employees. On the ground, Avanti are recruiting and training 250 extra drivers. In retail Aldi next month will be raising pay rates for its shop staff for the second time this year to £10.50 per hour, totalling a 10 per cent increase for the year. Pret have similarly made two pay awards over the past year.

And at last more employers seem to be reacting to the prescient pre-pandemic admonishments of my colleague Wendy Hirsh to ‘stop dithering, start (workforce) planning!’  The report on workforce planning that Wendy authored for CIPD is a brilliant guide and ‘how to’ manual with many useful tools for HR professionals. I recently used it working with a well-known bar chain who were experiencing horrendous staff shortages and turnover, leading to reduced hours in many locations. In response, they introduced a simple staff planning process for their bar managers. It has proved so useful that it is being extended to annual staffing plans with monthly update reports for every bar.

Have UK employers really recognised that the failure to plan for, and invest sufficiently in staff pay and skills, just creates a poorer, low-skill, low-pay, low-productivity company and country? We really hope so at IES, and are helping more employers to make the shift in employment approaches required. But far more employers need to follow. And fast.

‘When I started working here, on an apprenticeship, it was really something to be proud of,” a Heathrow Airport engineer told Delphine Strauss earlier this month. ‘Now, I see hours of queues, crying little kids . . . I am ashamed to work here.’

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.