CBI chief urges HR to create value

Digby Jones believes that if HR is to be taken seriously it needs to promote
the pivotal role it can play in boosting staff productivity. Paul Nelson

Chief executives do not understand the vital role HR plays in running a
successful business, according to the director-general of the Confederation of
British Industry.

Digby Jones is in no doubt that HR deserves a place on organisations’ main
boards, and blames ill-informed chief executives for snubbing the profession.
"Chief executives and finance directors have got to have a better
understanding of HR and the things it can and cannot change," he said.

"Not enough companies think creatively about the regulations they face.
It is left to the last minute, the HR director is wheeled in and says: ‘you can
do this, you can’t do that’, and wheeled out again – and I would think the
chief executive throws something at the door as they leave."

Jones believes HR needs to promote the pivotal role it could play in helping
organisations ensure their staff fulfil their potential and boost productivity.

"It is important that more HR people are on the board, but even more
important that they are seen to earn their place. Senior HR professionals must
move away from just dealing with regulation – which chief executives view as
slowing business down – to becoming directors on main company boards, viewed as
business partners driving the organisation forward," he said.

"HR must change from telling the chief executive bad news every day, to
saying ‘we are in charge of your best asset – your people – and want to be on
the inside working with you’. HR directors ought to be in there at the start
saying: ‘involve me now’."


Although he describes himself as a champion of HR, Jones is opposed to
planned regulation that will force employers to include HR measurements, such
as information on diversity and absenteeism, in company reports.

Ministers are set to consider the proposals for HR reporting in November
following a report by Denise Kingsmill, who is chairing a government taskforce
set up to tackle the issue. Jones claims that his members would view the move
as more HR red tape.

"Chief executives are very suspicious of it all. The red tape,
regulatory environment of HR has got such a bad reputation.

"I personally believe in it [HR], but CBI members would say: ‘Oh I see
what you want, another regulation that we must comply with, tick some more
boxes and stick it in the annual report.’

"Before we know it, it will become an obligation to do what the report
says, and suddenly, I am stuck with even more red tape that I will have to
employ another four people to deal with."

For the same reasons, Jones is also unhappy with the Health and Safety
Executive’s (HSE) move to introduce stress management standards for employers.
He is concerned they could be too prescriptive.

Positive pressure

He said the HSE and employers should focus on training managers in spotting
the fine line that exists between positive pressure on employees and stress.

"There should be guidance, education and training for staff about
stress as it is an important issue. I make it very clear that I expect my staff
to work under pressure. You find me an employee who does not want to work under
pressure, they enjoy it," said Jones.

"The signs of stress are quite easy to see and good managers should be
trained to recognise, understand and take stress off employees."

The CBI leader has been unhappy with the Labour government’s record on
employment regulations because he believes it is too rigid. He wants the
Government to adopt the same approach to legislation adopted by other EU
countries such as France and Germany, by introducing broad directions employers
must work within.

"I would draw down some very wide parameters and say that we want our
businesses to comply with these, and then come back in five years and see how
it is going," Jones said.

"This would not be a cop out. It is the way Europe does it instead of
‘do this by a week on Friday or we will see you in court’ – and it [the
Government] wonders why we are not competitive."

Jones cites the Data Protection Act 1998 (DPA) as an example of legislation
where the Government has failed to take business needs into account. The Act,
which outlines employers’ responsibilities when handling staff information,
came into force in October 2001, but is so complex effective guidance for
business has still to be produced.

The Information Commission, set up to aid compliance with the DPA, is
currently redrawing its codes of practice on the legislation, after criticism
that its original guidance was unworkable.

Jones said the Department for Trade and Industry now has an opportunity to
prove it is concerned about employers’ needs as it drafts the forthcoming
legislation on information and consultation due to be introduced from 2005.
This will place a duty on employers to consult earlier and more fully with
staff on issues that affect their employment, such as redundancies and

He urged the DTI not to include heavy financial penalties for firms
breaching the new law.

"If you penalise companies financially over this, you may as well make
a big sign saying: ‘would you mind going to make these things in China please,
and make the people redundant on the way out’, because that is exactly what will

Another piece of regulation that Jones is worried could damage UK firms’
productivity and competitiveness is the Agency Workers Directive currently
being finalised by the EU’s Council of Ministers.

As drafted, the directive would mean temporary staff have the right to the
same pay and conditions as permanent staff after six weeks in employment. After
five years, the directive would give agency staff equal rights from day one.

The UK employs around 700,000 of Europe’s one million temps, and the CBI
estimates that 160,000 agency jobs could be lost in the UK if the directive
remains in its current form.


Jones wants the qualifying period for temporary staff to gain the same pay
and rights as full-time workers to be nine months.

The CBI’s leader is in no doubt that an unchanged directive would damage the
unique flexibility of the UK’s employment market, which is vital if the UK is
to compete against emerging global competition from Asia and Eastern Europe.

"Agency working is a bit of ‘suck it and see’ on both sides, and a
wonderful way for a mother to get back her confidence and bring her talents to
the workplace after having a baby," said Jones. "But if employers
have to treat these people the same in every respect as full-time employees,
then they will not employ them, and China will think it’s Christmas Day


Digby Jones’ CV

2000 – Director-general, CBI

1998 – Vice-chairman of corporate finance, KPMG

1995 – Senior partner, Edge & Ellison

1990 – Deputy senior partner, Edge & Ellison

1984 – Partner (property and commercial law), Edge & Ellison

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