HR The Weapon Of Choice

It seems when reading press stories about certain high-profile companies, Uber, Tesla, Amazon etc. a lot of the coverage revolves around their employment practices (or abuse of).

They have all appeared in the news for conduct that conflicts with their shiny PR front – be it discrimination, (sex and race) or in Amazon’s case their infamous staff turnover.

However, when you read these stories the fact that they reach the media is an indication that their collective HR functions are failing. Moreover, the stories frequently highlight the failure of HR departments to handle complaints correctly. Some HR departments appear to have become part of the weapons used by poor employers – they have become part of the problem. They facilitate breaches of employment law and then hide the misdeeds of the employer. Imagine being the HR department at The Weinstein Company.

HR departments answer to the same bosses as other employees; however, there does appear to be a definite trend to facilitate malpractice. HR is never independent, but it seems to have lost some backbone. Instead of speaking truth to power weak HR departments are colluding in breaches, some of which are both serious and criminal.

HR departments should advise and direct management to take the right course – this is frequently not the easiest path – however, it is now more necessary than before. HR needs to reassert its importance as an independent function within organisations. This also means better recruitment of and training for HR professionals. HR should not be seen as a path from administrative or minor management roles.

Directors of HR should be board-level appointments – appointments that report to the board and no one else.

Due to the General Data Protection Regulation (GDPR) those in charge of data protection and security are now being given board-level status. HR is long overdue for the promotion.

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The GDPR Bandwagon

So hopefully you remember the supposed millennium bug Y2K that was going to eat up and destroy all computers, servers and all the software on these machines – because it didn’t really happen. It wasn’t so much a hoax as a way for the IT industry to stoke fear and extract large fees from fearful clients.

Anyway, it is now 2018, and the upcoming General Data Protection Regulation (GDPR) is a bit of a golden goose for lawyers, IT consultants and others pedalling training courses, seminars and audits. A significant number of these people have no experience or expertise. You can tell this because the first fact to come out of their mouths is the new fines regime, specifically the maximum 4% of turnover figure.

That Fines Figure
The GDPR introduces fines up to 20 million Euros or 4% or annual global turnover whichever is the greater.

But as the Elizabeth Denham, the UK Information Commissioner has pointed out – from 17,300 cases in 2016/17 only 16 resulted in fines. Fines are (and will continue to be) a last resort, and are reserved for the worst (and in some cases persistent) offenders. These tend to be individuals and businesses that know they are breaking the law – these are not businesses accidentally caught out by some arcane part of data protection law.

There is also the ultimate irony – GDPR related spam using stolen or unauthorised contact details.

Advisors are running around telling clients that the sky is going to fall on them – even though Elizabeth Denham, the UK Information Commissioner has clearly stated it will not.

It is, however, true that some organisations have some catching up to do. Unsurprisingly, there are still quite a few organisations that are not even registered with the Information Commissioner’s Office (ICO).

But the ICO appears to have a clear policy of getting businesses registered and complying, rather than fining them for not being registered in the first place.

Anyway, you have heard of Facebook?
Facebook is an example of a company that the ICO is interested in – the ICO is interested in this level of misuse and abuse. It is also the reason Facebook is moving legal aspects of its business outside the EU, to avoid having to offer too many Facebook users the protection of the GDPR.

Do The Right Thing
If you do the right thing with your customers’ data all will be ok:

– tell them how you use it
– keep it safe
– don’t spam them
– let them opt-out

These are things that well-run businesses have been doing for years, long before the GDPR appeared – because it makes good long-term business sense.

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Equal Pay By Law

So all the equal pay kind words and half-hearted legislation in the UK (and Europe) has delivered little in the way of change and progress in the last 40 years. It is not that men are being paid more; it is that women are being paid less – for identical jobs. Sometimes (and embarrassingly so) while standing or sitting next to each other day after day, just ask the BBC.

We should call it what it is – “penis pay”.

Long-Term Loss
After 40 years there has been some progress, but not nearly enough. Also, depressingly the new titans of fluffy capitalism, companies such as Google are perpetuating the problem by deliberately enforcing the pay gap and then seeking to hide it from public and judicial scrutiny. If you are a woman and working for Google you are going to end up being paid a lot less, in some cases literally millions. It is not just pay that is unfair, that is just the start. It is the loss of, or reduced long-term benefits and incentives, such as shares, share options, bonuses and to cap it all, pensions.

So what is required is legally enforced equal pay and benefits.

On 1st January 2018, Iceland did just that.

Under Icelandic law businesses that employ 25 or more people must look at work done and obtain certification that men and women doing the same jobs are paid the same. No certification means the risk of fines. This law was passed by a centre-right coalition, with the aim of eliminating the pay gap completely by 2022.

Size Matters
The argument against legislation is the burden of complying, (along with actually paying the same). Critics point out that Iceland has a population of 323,000. This is a hollow argument as businesses have committed to the effort of deliberately paying less; deliberately paying the same is not exactly an administrative burden.

Pay Gap
The pay gap in the UK in 2017 was estimated to be 16.9% – the pay gap is the average pay in an organisation for men and women – the difference/gap between the sexes. However, even though it does not provide proof of unequal pay, it does provide some indication of unequal opportunities and promotion.

Unenforced and frankly feeble legislation has achieved only small steps in 40 years. The UK government (and other European governments) need to finish the task…there are a lot of votes to be won by the governments and political parties that step up and do it.

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We Need To Talk About Harvey

We really need to talk about Harvey, or should that be all the Harveys.

With all the press coverage over recent weeks, anyone would think this is a unique situation. The only factor that is unique is that it has come out. Unfortunately, it is not uncommon to have a Harvey in any workplace. However, what is surprising is the number of allegations against Harvey Weinstein and the time-period – almost 30 years of abuse.

It is important to remember that everyone, (including Harvey Weinstein) is innocent until proven guilty. That said the sheer number of allegations, including alleged rapes, does not look good.

Given the level of abuse and the period this must have been an open secret in Hollywood; basically, people knew and did nothing, turned a blind eye, or in some cases facilitated it. To the facilitators – you share some of the guilt; you played a part in enabling the behaviour and covering up.

Now that his fall from grace has begun a long line of people has formed to say how terrible it all is – a large number of these people probably already knew or at least strongly suspected. You also have to ask what his brother Bob was doing to correct or stop his brother – apparently nothing.

So, moving away from the personal to the organisational.

The reputation (and possibly followed by the finances) of the Weinstein Company is in tatters. There are third parties who see this as a good investment opportunity, which it probably is. Though a significant part of any investment is going to be a long and committed re-branding exercise. This can’t be window dressing and must be meaningful.

Despite all the woes an opportunity exists to change things for good. The name must go and Bob with it – a nice pay-off and a comfortable retirement in Florida beckon. Swiftly after that, a female head must be recruited. There are plenty of talented female executives in Hollywood, and it must be someone not tainted by previous association. After that some female board members who equally know what they are doing, just as examples – Arianna Huffington and Meryl Streep, but to be honest there is an embarrassment of female executives that can be recruited – at a price – basically pay them the same as the fat white blokes.

The possible lesson to be learnt from this for other organisations is not to let these situations develop in the first place, and if they do, deal with them swiftly and decisively. Otherwise, one person can damage the reputation of an organisation, and the future of the organisation can be imperiled by the actions of just one person.

Where someone is a founder or a director, the situation becomes very difficult, but not impossible. It is then the duty of other founders, directors or non-executive directors to act to save an organisation. By act, we mean deal with the problem (the person), not pay-off the complainants. Dealing with them will frequently mean removing them; a talking-to will not suffice as the risk remains while they are under the same roof.

Of course, they may just go on to do the same somewhere else, but to be brutally honest that is not your problem – you have fulfilled your duties, stabilised and saved the ship. Importantly, you have also sent a message to your staff and colleagues that this will not be tolerated. Plus the staff that complained should be retained and not punished in any way – this will earn you their utmost respect and loyalty – and the same will go for your other staff.

Leaders lead from the front and set the example – they don’t sweep stuff under the nearest carpet.

Finally, these situations can develop when the HR department looks the other way or facilitates the abuser, a similar situation occurred at Uber and more recently Tesla. A proper HR department intervenes and acts early, in some cases risking fall-out with senior staff in the process. For this reason, the head of HR should be a board-level post, and the person should report direct to the CEO and the rest of the board.

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The BBC – inform, educate, entertain & discriminate

So the recent revelations regarding what the BBC pays for talent are hardly revelations. The white old boys club that is the BBC has always offered more work and pay to those who look like the current Director General and possess that essential element for a successful BBC career – a penis.

Apologies for stripping it down to basics, but that is what we are talking about here – men (unsurprisingly white men) securing better jobs and more pay when compared to their equally talented female or ethnic minority male colleagues. If you happen to be in both of those boxes female and from an ethnic minority you get a really rough deal.

When talent pay was disclosed the industry figures, (all white males) had the front to bemoan that the disclosures would lead to salary inflation, basically “now we will have to pay fairly”. This was said without the slightest trace of guilt or culpability; a clear indication that they believe they have done nothing wrong.

Legislation to combat sex discrimination has been on the statute books since the Equal Pay Act 1970, now replaced by the Equality Act 2010, yet 47 years later nothing has really changed. The BBC was only caught when it was forced to disclose what it pays for talent. The political purpose of this disclosure was to embarrass and harass the BBC because it supposedly pays too much. The irony is that it was found to pay far too little to certain people. This glaring differential cannot be defended when in some cases people in the same studio, sitting at the same desk, doing the same job, at the same time were paid four times more than their colleague a few inches away – who just happened to be a woman.

All the past and current legislation has failed – and failed miserably. New legislation requiring pay disclosure for all organisations and enforced equality is needed. This is a political and moral issue. One of the main political parties needs to step forward with proper legislation. Furthermore, female and ethnic minority voters need to support that party (whoever it may be) with their voting intentions, even if they would usually rather die than vote for the said party. Normally, the government puts forward proposed legislation, but our current government is so weakened and reduced that the opposition benches could force the government to introduce legislation.

Pay inequality is not just an issue for the BBC it goes on at a large number of organisations, some of which you would expect to act differently, such as Google. The other issue for the BBC is that this row relates to pay for front-of camera talent. We have to ask what goes on with regard to regular BBC employees.

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Passw0rds To Parliament

The recent cyber attack on the UK parliament is said by various media reports to have resulted in no more than 90 email accounts being hacked. This has been reported with some relief. True the attack could have been much worse, but to imply that 90 accessed accounts is in any way ok is completely wrong-headed.

It would be safe to assume that some of these compromised email accounts, in turn, have access to other important direct contact details and email addresses. It is this third-party data that can be saved and used at a later date, (when this latest attack has been forgotten) to further burrow into government, civil service and other important accounts.

Hardly An Attack
The attack has been described as a brute force attack – in that the email system was somehow overcome – this sounds good in the media. The truth is that the attack was a straightforward dictionary attack – looking for weak and in some cases embarrassingly feeble passwords – passwords like “password”, “password1” and “passw0rd”. This is way beyond embarrassing and much closer to feckless & reckless.

More Money & Bodies
Politicians (from all parties) need to be educated about the risks to their personal data and in the wider sense to the administration of democracy – both are under threat. Once their eyes have been opened to all the risks, the government need to increase funding and resources to protect (as much as possible) both the democratic and physical infrastructure of this country – as both are at real risk.

GCHQ needs to go on a massive recruitment drive and be given funds to offer competitive salaries for the best candidates. Once that has increased capacity and capability, GCHQ trained staff need to be embedded into all branches of the civil service and democratic institutions, including parliament.

This Is Everything
Defensive cyber security and the ability to respond offensively are as important as aircraft carriers and the nuclear deterrent. The ability to respond aggressively is the effective deterrent that needs to be bolstered. The UK recognises the need – now the action must start.

Human Weakness
The chief weakness is human – everyone has email and Internet access – and the ability to use pathetic passwords. Where possible this weakness needs to be designed out. Two-factor authentication would be a start for all government and related email addresses; this is not difficult to do.

Threats Everywhere
This is not just an issue for government, business data and secrets are also targets. Much more needs to be done to protect against even low-level threats and disruption. Company IT directors need more money and places on the company board. According to the Financial Times, the recent Petya malware attack cost Reckitt Benckiser an estimated £110 million in lost sales, and some of its factories are still not fully operational again. The Financial Times also reports that AP Moller-Maersk the shipping giant has cargo stuck at 15 different ports around the world.

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Grenfell Tower Response

It is probably far too early to learn all the lessons from the Grenfell Tower Disaster. The borough of Kensington & Chelsea has been widely criticised for their response to the tragedy, though some of this is the legitimate anger that the fire should not have spread in the way that it did. The cladding – cause of the fire spreading so quickly is now said to have been used in breach of building regulations.

Again the borough of Kensington & Chelsea appears not to have overseen the work properly – not ensuring that flame retardant panels were used – the cost difference being only £5,000. Furthermore, the council appears to have used rents in the last financial year (and previous years) to subsidise other services, including non-essential events, such as opera concerts. None of this looks good and smacks of a council that wished that North Kensington did not exist or could be just redeveloped out of its current existence.

The borough has been lambasted for its slow response to the disaster; it is hard to know if this is completely accurate or driven by the media pursuing a line of reporting. Whatever is the case the borough probably responded in the way any other council would respond – initially slowly as money and resources were put in place.

What is actually required is a coordinated central government response to such disasters. In these situations, central government should immediately step in with a dedicated team to guide all aspects, from the first rescue efforts all the way to providing food, clothing, shelter and subsequent re-housing. Some may think this excessive, but given the seemingly uncertain times in which we live this should be considered an effective use of money and resources. True, a lot of this already takes place, but the difference would be the immediate handover to central government; and also the use of local resources by central government. Such a response should be used in all significant events, from fire to flood. Also, the decision to deploy a central government should be taken by central government, not local authorities.

Some disasters cannot be prevented, (though sadly the Grenfell Tower Disaster was wholly preventable), but how we respond and the speed of the response can and should be strengthened.

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The Bro Bubble

It looks like some (most) parts of the tech industry have a culture problem. Tech companies go out of their way to show a happy & shiny face to the world. However, underneath this is undermined by some of their employees and bosses. We say some, rather than all – but the some can have a disproportionate effect on any business. Negative headlines can undo many months and years of carefully cultivating culture, whether it is the Uber CEO getting into an argument with one of his drivers, or Tesla failing to address sex discrimination.

There are other deep-rooted issues in tech firms, such as a lack of diversity. This can have long-term commercial implications for many companies. If your workforce is predominately white & male and drawn from the same narrow field of universities, there is every chance you will miss nuances in products, product development, and services simply because your frame of reference is so limited.

You Only Sell To Bros
If you employ a very distinct cohort, they, in turn, will employ more people in their image. There is a very real risk that this circle of events will tighten further. Your employees may well have the same views and refer to each other in both everyday and key decisions. Even when people are employed in key foreign markets there is a tendency towards centralised decision-making, so commercial decisions are referred back.

How To Benefit
So how as a business do you benefit from your competitor’s myopia? The simple answer is to employ, mentor, foster and promote the workers they do not employ or under-employ.

This should never be seen as a chance to hire on the cheap, quite the contrary – pay industry levels of pay and always do so, do not be tempted to go cut-price because people need work – all this leads to is a disgruntled workforce.

By offering a more diversified workforce the same benefits and opportunities your business will flourish. Not only will you have a better chance of making better products & services, but your products & services will also likely appeal to a broader customer base or have greater appeal in more territories.

Furthermore, gaining a reputation as a better employer will allow you to attract and retain more employees – dramatically reducing recruitment costs and reducing staff turnover. The greatest commercial weapon for any business is a secure and motivated workforce – particularly when your competitors are regularly going through embarrassing and distracting convulsions.

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The “right-to-own”?

The government’s recent white paper on the English housing market has been criticised for being too timid. This is partly due to the lack of movement on allowing more green belt development – a fair point, but it still looks like tinkering at the edges.

Also, the move to improve renting will come to nothing without imposing proper rent controls on the market, something very few seem prepared to do. The fact remains if (and it is a big if) you can save up enough for a deposit it is usually cheaper to pay a monthly mortgage than monthly rent. Not to mention the obvious fact that owning a property gives you a huge financial leg up and can be the basis of long-term financial stability.

So making the rental market slightly easier is, in fact, a huge admission of defeat by the government. From a political point of view, it is also a huge miscalculation and an abandonment of the middle ground of politics. The government has an open goal to shoot at – by doing more to provide affordable homes to younger people they could lock-in the next generation of solid Tory votes. The fact remains, those you own their property are more likely to vote Conservative. Simply because there is currently no real opposition should not mean the Tory party free-wheeling up to the next general election.

There does need to be a radical change in government policy, and we do mean radical.

1. A tax system that actively discourages residential property investment for the purpose of renting, whether carried out by individuals or companies. It should become financial suicide to own more than one home, (this includes second homes).

2. Homes that are purchased and not lived in should be similarly taxed. This is a particular problem in London but is growing elsewhere in the country. Overseas buyers who buy a property to rent out or just to use as a safe deposit box are not investing in this country. If they were to move here and live here full-time, they would be investing their personal futures in the UK – and that would be very welcome.

We have to stop looking at residential property as an investment it is bad for our economy. The money would be better used investing in companies and even the stock market. Money should be put to work not tied up in housing.

Also concentrating house ownership into fewer hands creates a greater economic imbalance in society, and that has a long-term detrimental effect. More people need to own their homes and think like homeowners. These same people will spend money renovating and furnishing their homes putting money back into the economy. This has to be a good thing.

We just have to get on with being bold and brave; sadly there seems to be a lack of political will to do the unthinkable. Fine words on the steps of number 10 need to be put into radical action. This must be the radical “right-to-buy” of our age.

The “right-to-own”?

It has political masterstroke written all over it.

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Brexit Lessons

It looks like we are going for a hard Brexit, was there likely to be any other kind?

Regardless of how you voted, knowing how we are going to leave is good news for all of us.

However, we also have to recognise that the warnings from the failed “project fear” as now starting to appear. A falling pound and higher inflation and increased uncertainty in the jobs market – all when we have only started the real recovery from the recession.

There are also dire warnings that GDP will be lower in 10 years time than if we had stayed in the EU.

Brassed off
With all the economic news and forecasting it is easy to forget the real reasons people voted for Brexit. Immigration got the blame because it was an easy target for the right & alt-right and a convenient way to blame others and stoke some hate. People did vote due to immigration, but immigration was caused by a steady recovery in the UK economy, unlike some other European countries – basically caused by good news.

The main reason people voted Brexit was that they were tired of bearing the brunt. Tired of years of recession with less job security, lower pay and few pay increases, where the minimum wage is the maximum wage and for the unlucky – redundancies. It was a cynical lie to state we are in this together. Some have recovered fully from the recession because it hardly touched them, but the majority have suffered. The only factor that prevented things from being worse was ultra-low interest rates for those with any form of debt. Short and long-term borrowing mitigated the drop in living standards. But, this is clearly not sustainable, and people are rightly still brassed off.

But, they are not brassed off by a so-called loss of sovereignty or fretting over the European Court of Justice – that is the burden that must be borne by Old Etonians who have the time and privilege to worry about such things.

For people who have to work, they worry about things such as short-term contracts, zero hours contracts, agency work contracts – the increasing commoditization of work – and them, that neatly coupled with ever-rising housing and living costs – a perfect storm of instability and unhappiness.

Time to deliver
Those that benefitted from and stoked Brexit now have to deliver in the real world. They have to rethink (abandon) their attachment to a flexible and competitive workforce – as these are coded words for exploitation. People want their just rewards for working – all they are asking for is to be able to live properly on what they earn.

The politicians must deliver for ordinary people – Brexiteers promised the Earth, now they must deliver it.

Oh, and slinking off to be a media pundit does not count, that is abandoning the field when the real work is just starting.

Posted in Employment law,, Public Policy | Comments Off on Brexit Lessons