As people return to work, how can organisations ‘build back better’?
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While the experience of South Korea highlights that there are no guarantees that resuming ‘normal’ activity will be straightforward, attention is now turning to how businesses can innovate to not only help them survive the immediate crisis, but return to growth in the future.
As part of a series of papers commissioned to mark the centenary of the Work Foundation, we have published new research from Dr Peter Totterdill today exploring how UK businesses can innovate to improve working practices and boost performance. While the paper was produced prior to the Covid-19 crisis, its proposals for the ways businesses across the country can ‘build back better’ hold new relevance in the context of the current crisis.
How will businesses and other organisations respond to the next phase of the Covid-19 crisis?
The Covid-19 pandemic is reshaping the UK and global economies in ways unimaginable just a few short months ago. The Institute for Government reported on 29 May that 15% of the UK workforce are now claiming Universal Credit, and with nearly a quarter of workers having been furloughed, nearly two fifths of UK workers are currently doing little to no work, and having their income provided in part, or in whole, by the state.
Looking ahead, as Government support begins to reduce, the Office for Budget Responsibility have suggested the UK’s GDP is likely to fall by 35% in the second quarter of this year, with unemployment likely to go up by at least two million. Sectors like high street retail and leisure and tourism that were already struggling in many parts of the country can expect to face new battles for survival.In this context, there is a real risk that faced with significant cost and time pressures, UK businesses and other organisations will seek to cut back parts of their operations, such as training and development. Yet in order to navigate the current crisis and return to growth in the future, all organisations will need to think differently about what they do, and how they do it – something that will be far harder to achieve should they simply limit resource wherever possible.
Drawing on OECD analysis, Totterdill articulates the difference between ‘low road’ and ‘high road’ approaches to organisational and employee development. The former tends to emphasise operational models centred on low skill, low cost, mass production. He argues that not only can this lead to employees becoming marginalised as their skills are devalued, but also, such approaches can hamper innovation, rarely secure a full return on investment for companies, and can lead to expensive errors.
By comparison, ‘high road’ approaches, such as those pursued by Be the Business in their Productivity through People programme, or Scottish Enterprise’s Workplace Innovation Engagement Programme, emphasise empowering workers by increasing job autonomy, boosting employee engagement, and creating the conditions for them to innovate and drive improved performance. Such distributed decision making can also facilitate flatter, more agile organisational structures.
And although the evidence base surrounding these specific approaches is still emerging, there is good evidence linking the adoption of ‘high-performance working’ practices and improved business outcomes.
The role of public policy
Yet the reality is that for many business and organisations, adopting this kind of ‘high road’ approach when responding to the Covid-19 crisis will seem like an impossible task. The sheer scale of the recession ahead will likely put the very existence of large numbers of firms at risk, and their capacity to invest in their workforce or build for the long term during this period will be severely constrained.
Totterdill emphasises the nature of ongoing support available for businesses will be key. Many other European countries have established an overarching framework to help businesses to see the value of workplace innovation, and have reinforced this with continuous funding and support, but the UK hasn’t seen the same sustained focus on management practices.
Therefore, whether it is through enhanced measures to accompany the kind of emergency support currently being delivered through the Job Retention Scheme – for example, funds to enable more training opportunities for furloughed workers – or a revamped approach to the industrial strategy and ‘levelling up’ agenda that enables greater investment in skills and employee engagement, it will be vital that Government does all that it can to support businesses and organisations to invest in workplace innovation for the future.
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