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“ Good employee relations saved jobs


The point at which the nature of the new employment relationship became clear to everyone was during the recession. One of the most striking features of the recession that hit the UK in the wake of the financial crisis was that unemployment did not rise as high as all previous experience led us to expect. The downturn of 2008-2009 inflicted a larger cumulative loss of UK output than any other post-war recession has previously, yet while output fell 6.4%, employment fell only 2.5%. Had the fall in employment been in line with the slump in output - as it was in the previous two recessions - the UK would now be looking at a jobless total of more than 3 million rather than the 2.4 million we see today.


Working together saved jobs


²Jobs for the Future, CBI, 2009


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One of the main reasons for this is the change in relationship between management and staff that has developed over the last two decades. “What actually happened was that employers and employees found a new way to manage these issues – a new employment relationship” says CBI Director-General, John Cridland. Businesses and employees cooperated to find ways to reduce business costs and retain skilled staff. Job shares, recruitment and pay freezes, reduced overtime and short-time and flexible working all played a part in that. At the height of the recession, our surveys showed that 62% of firms had taken such steps or were planning to do so. We highlight GKN in our video here, but a wide range of firms developed similar proposals, including KPMG, Renolit Cramlington and Pinstripe Print, all of whom we reported on in our publication Jobs for the Future². What was particularly positive in these cases and many others across the private sector was that these arrangements relied on cooperation with


employees and, where present, trade unions. “I think the lesson so far is that both sides looked for increased flexibility to work out solutions to save jobs as opposed to relying on the legal position and looking for confrontation,” says Martin Warren, Practice Group Head, Human Resources Group at Eversheds.


Passing the test


Delivering this more flexible outcome wasn’t easy, for staff or managers. It requires staff to take a more long-term view of their relationship with their employer. For managers, the more complex relationship with staff that a new relationship represents requires more focus and investment in the key management skills that this relationship requires. Firms are aware of the need to support managers in making that transition, and that this is a journey that is by no means over.


Nevertheless, this flexible response to the recession – which has delivered wage restraint and job preservation through the downturn – shows how much progress we have made. “Employment relationships were tested when people were either losing their jobs or at risk of losing their jobs,” says Cridland. “Our employment relationships passed that test.” But this success is something that should now be translated into a permanent and fundamental change in the relationship between employers and employees in the UK. To deliver this, employees and employers will, in turn, require support from government in how it interacts with the workplace. The focus for government should be on fostering positive, flexible relations based on good employee engagement, with key decisions made in the workplace rather than Whitehall.


The lesson so far is that both sides have looked for increased flexibility to work out solutions to save jobs.


” Martin Warren Practice Group Head, Eversheds Lessons from the recession


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