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Ian Brinkley
Economic Advisor
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Ian Brinkley

Most workplaces weather the economic storm

Authors: Ian Brinkley Ian Brinkley

28 January 2013

The release of the Workforce Employment Relations Survey (WERS) for 2011 is the first direct evidence we have for how workplaces responded to the recession.  Overall, the results are mildly positive despite the intervention of a deep recession and a very weak recovery since the previous survey in 2004.  Most of Britain’s workplaces seem to have weathered the greatest economic shock of the post war period reasonably well.

The survey confirms that in many workplaces, it was wage cuts, work reorganisations, and recruitment freezes that took the strain, rather than job cuts and redundancies.  Managers in nearly 40 per cent of private sector workplaces said a wage freeze or cut had been used in response to the recession, while only 14 per cent of workplaces reported compulsory redundancies.

These results tell us why levels of employment held up so well across the recession. They do not explain why private sector employers started to hire in large numbers from 2010 onwards. However around 25 per cent of all workplaces  experienced little or no recessionary impact, rising to 37 per cent of wholesale and retailing workplaces, and to 70 per cent of workplaces  in energy and water. The recent closures of well-known retail chains may have changed the overall picture somewhat in retail, but it is clear that the impact of the recession was not universal.  It may be that some of these unaffected workplaces account for the surprising growth in private sector employment.

The results show that most managers think their workplaces came through the recession in reasonable shape. Only 22 per cent of managers agreed with the statement that the recession had made the workplace weaker, with 60 per cent disagreeing. Employees are less happy about their pay and their job security, as might be expected, and many report having to work harder. But on most other measures of workplace satisfaction there has been some improvement, albeit often modest.

Business leaders in general are often held in low regard by the public and there have been well-publicised failures in corporate governance in some sectors. However, despite this employee commitment to organisations has increased significantly. Nearly 70 per cent say they would be proud to tell people who they work for, compared with 60 per cent in 2004. The survey confirms a strong association between organisational commitment and both employee involvement and ability to take the initiative in the workplace.

The news on flexible working is mixed. Overall, there has not been that much change in the shares of workplaces offering flexible work since 2004, despite all the efforts by successive governments to encourage more diversity. And some changes that have been made have tilted towards the interests of employers rather than employees. Zero hour contracts are still unusual, but their incidence increased from four per cent of all workplaces to eight per cent, and increased sharply in hospitality from four per cent to 19 per cent of workplaces. In contrast, job-sharing is becoming much less common – down from 26 per cent of workplaces in 2004 to just 16 per cent in 2011. Managers were also more likely to see achieving work-life balance as the responsibility of the individual in 2011 than they were in 2004.

These are of course just some of the first findings. WERS remains one of the richest sources of information on what is going on in British workplaces. The job of refining, analysing, interpreting and communicating the information contained in the survey has just begun.