Manufacturers concerned about labour flexibility

Posted on 25 Jul 2011 by The Manufacturer

The CBI and EEF have raised concerns about the direction of government regulation on workforce flexibility, as 41% of manufacturers in a survey express pessimism over the UK's environment for flexible labour.

Both organisations have recently undertaken extensive research with recruitment agencies Hays and Executives Online respectively, to attempt to uncover employment trends in the sector and gauge industry feeling on the requirement for workforce flexibility against their capability in achieving it.

EEFs research, Modern Manufacturing Workplace shows that 94% of manufacturers believe workforce flexibility will be critical to their competitiveness in the next three years. 74% believe flexibility will be achieved through improving communication between management and staff.

The CBI report Thinking Positive: the 21st century employment relationship detects similar trends and expressions around the importance of flexible working arrangements and strong, stable relationships between employers and employees.

The desire for workplace flexibility among manufacturers has been welcomed as a positive sign of modernity in the sector however research participant have identified government workforce and business regulation as a potential blocker to progress in this area.

Both the CBI and EEF reports on workplace flexibility have been published to coincide with the closure of the government Modern Workplace consultation and the launch of the Red Tape Challenge in the manufacturing sector. The timely identification of the role played by government in supporting business through providing a stable regulatory environment with a minimum of administrative burden on firms has been welcomed by industry partners although, according to the EEF report, 48% of manufacturers believe that further, destabilising regulation is likely to disrupt the work they have already done to achieve flexibility.

Advising government, EEF’s director of policy, Steve Radley said: “Supporting flexibility must be a key part of the government’s growth strategy. To do this, it needs to send a clear signal that additional regulation will be the last rather than the first resort and ensure that any new measures are simpler and much less prescriptive than what we have seen in recent years.”

Particular areas of grievance from past regulation were shown to be the abolition of the default retirement age and the gold plating of standards within the Agency Worker Directive which is due to come into force this October.

EEF’s research shows that around 25% of manufacturers use agency workers to achieve short term flexibility but that only 13% would consider adopting flexible terms with permanent staff. This may have to change in October when the Agency Worker Directive will change the terms of employment for temporary staff with the potential to make their use both more expensive and administratively burdensome.

CBI has compared the Agency Worker Directive negatively with comparative legislation in Europe and called for government to take a lighter touch approach. Jon Cridland, CBI director-general, said: “Traditionally when making employment law governments have tried to specify every last detail of what should go on in the workplace.

“With a strong base of employment rights already in place, we simply don’t need the state telling us how to manage every aspect of basic human relations.

“The Government should adopt a simpler approach to future employment law, one which maximises choice for employers and staff and plays up the strengths of our flexible labour market.”

Supporting these comments and showing how effective relationships between unions and employers can create a working environment in which the interests of both employers and employees are protected Doug McIldowie, group director of Human Resources at GKN, and Frank Duffy, senior union representative at GKN added their perspective to CBI’s findings.

McIldowie shared his experience of negotiating short-time working on a large scale during the recession and said:“Those people are still working with us today. They went through a lot of pain but they are still working for the company and are back to working normally.”

Duffy, added:“If we hadn’t signed up to the short-time working agreement I think we would have certainly lost more jobs.”

Flexibility should not only be thought of as a response to recession however, but also as a means to competitive edge. Accolade Wines, formerly Constellation Wines has developed innovative flexible working patterns at its record breaking Avonmouth plant in order to reap long term benefits for the company. Plant manager, Richard Lloyd believes it is an area of innovation which differentiates the company.