When a fresh-faced Tony Blair swept Labour to power with a landslide election victory in 1997, employers feared a new era of union-friendly legislation, coupled with increased employment regulation that would harm UK business. But have those fears matched the reality? How different is the life of an HR professional in 2007 to that of a decade before?
Nigel Meager, director of the Institute of Employment Studies, said 10 years of Labour had, overall, been a successful period in workplace terms. The employment rate for people of working age is hovering at about 75% – a near 3% rise on 1997 levels, despite the size of the working population rising.
“Having this high figure is mainly due to a solid economic framework and low inflation,” said Meager. “There has also been some success in getting inactive groups such as lone parents back into the workplace.”
Blair’s employment legacy will mainly be the introduction of the minimum wage and a raft of legislation designed to help families.
Cost of legislation
Susan Anderson, director of HR policy at the CBI, said that although the employment rights introduced by the government had bedded down well, the employers’ group was concerned about the cumulative impact of legislation – as well as the cost to business.
“We are saying enough is enough,” she said. “The increasing amount of regulation is taking valuable management time to deal with, and undermines the UK as a place to do business.”
Labour’s tendency to wholeheartedly support European legislation such as the Working Time Directive has also been a “nightmare” for employers, Anderson said.
But Meager said it was important to stand back from these comments and look at the facts.
“The government must balance conflicting pressures from employers and unions, and protect workers,” he said. “On balance, it has done pretty well the UK is one of the least regulated labour markets in Europe.”
Either way, the sheer volume of employment law introduced to the UK over the past decade has greatly affected the role of HR professionals, according to Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development.
“A good working knowledge of regulation is essential for any HR generalist today, particularly around diversity and discrimination law,” he said. “This has pushed HR more into risk-averse mode, where its main job is to keep the organisation out of tribunals.”
A tighter labour market also means HR professionals need to be much more sophisticated with recruitment practices. “No-one was going on about talent management 10 years ago,” Meager said.
One big triumph for Labour in the workplace was the landmark introduction of the national minimum wage (NMW) in April 1999. Before then, Labour activists estimated more than 300,000 workers earned less than £1.50 an hour.
Meager called the NMW “an unqualified success”. He added: “Before its introduction, the CBI was saying it would be disastrous for employers, and would lead to mass unemployment. But the government helped sell the idea by putting into place the independent Low Pay Commission, and initially it was very cautious in recommending the levels the wage should be set at.”
Judy Pearson, director of UK HR at charity Save the Children, said the introduction of the NMW was a positive thing, as there were people working for virtually nothing before its inception. “But the level is still well below the living wage and not widely and effectively enforced, so there is still some way to go,” she said.
Progress on skills
Less impressive, said Meager, is the government’s record on skills and productivity. “Skills have been the major disappointment for Labour,” he said. “Compared with its major competitors, the UK still has a very long tail of under-performing companies and individuals.”
The Leitch Review of Skills published in December last year found that even if the UK met the challenging targets the government has set, it would run to a standstill, as skill levels would still lag behind that of many other countries in 2020.
“There are still a high proportion of people with very poor basic skills, and there has been lots of fiddling around with various skills and training bodies,” Meager said. “The country is clearly not doing as well as it should be.”
This view is echoed by Emmott. He said constant “shuffling of the deckchairs” with the numerous skills bodies had left employers confused. “That has not really helped HR professionals,” he said.
Union umbrella body the TUC said training and skills issues had finally got the profile and urgency from a Labour government that they deserved. But a spokesman said there were still areas where the government could go “further and faster”.
Finally, the world for working families has been transformed since 1997. Parents with young children and carers can now work flexibly maternity leave and pay has been increased paid paternity and parental leave have been introduced and tax exemptions on childcare vouchers are now available.
Nicola Blatch, HR director at Ford Retail, said Labour had provided a “fairer working environment for families”, and given far more flexibility to parents to share responsibilities for childcare.
Ten years of Blair – HR’s verdict
Nicola Blatch, HR director, Ford Retail
“Labour should definitely have done more to address the issue of employee relations and the handling of cases brought against employers. The tribunal system is now a joke, the number of cases is at an all-time high, and yet the legislation was supposed to improve the system and add validity to the process. It has done quite the opposite.”
Judy Pearson, director of UK HR, Save the Children
“There is more bureaucracy and ever-increasing amounts of legislation – some of which is good. But whereas there has been a stated intention to increase flexibility in employment, there is a far greater burden on employers to be driven by processes and systems. The output of this is that it can stifle innovation.”