CIPD highlights the risks of short-termism

CIPD’s new research, covering 3,500 business leaders and 2,200 HR practitioners around the world found that a many business leaders were seeking to enhance organisational performance by rewarding high-performing individuals ‘regardless of the values the demonstrate.’ Their research suggests that businesses are increasingly focussing on the short-term without considering the long-term consequences of their decisions.

CIPD’s survey showed that only 24 per cent of business leaders were ready to make short-term sacrifices for the long-term benefit of the company and its people. Business leaders also said that while their employees had the ability to influence decision making, they did not consider it a priority – with 75 per cent saying employees inputs ‘as either nice to have but not imperative’ or as ‘applying but can be compromised.’

CIPD chief executive Peter Cheese said: “This risks unintended consequences when people try to cut corners or maximise short-term returns without thinking about the consequences of their actions on all their stakeholders, which includes employees, customers, suppliers, and communities, and, as we’ve seen in the case of VW, the shockwaves are considerable and can significantly damage even the biggest brands.”


Collaboration with employees crucial to innovation

The EveryDay Innovation Report, produced by Wazoku with Cisco, Waitrose, Great Places to Work and The Future Shapers covered 1,000 board-members, senior managers, middle managers and everyday workers within large enterprises across the UK to identify organisational challenges to drive innovation.  The study reveals that although most believed innovation to be crucial to organisational success, most were faced with barriers and ‘ambiguity’ from implementing innovative policies and strategies.

More than half of those questioned said that their organisation is ‘full of people with great ideas’ – but that they do not have the right platform to share them - while almost 60 per cent said that management did not take their suggestions seriously.

Cris Beswick, Innovation Expert and Founder of The Future Shapers said: “Building a culture of innovation isn’t rocket science but it does require something more than a note on a board report or yet another senior team discussion. The ultimate goal is for every person at every level throughout an organisation to embrace EveryDay Innovation. The challenge is for leaders to step up and make it happen.”


Employers to spend an extra £1.6m in wages next year finds PwC

A survey conducted by PwC of over 100 employers with an average of 11,000 employees each shows that they expect to pay an extra £1.6m in wages next year as a result of the National Living Wage in – rising to £11m by 2020.

Figures published by ONS earlier this week indicated that in 2014, around six million employees were paid less than the Living Wage in the UK. This is the figure calculated by the Living Wage Foundation which reflects the cost of living. At £7.85 and £9.15 in London, it is higher than the National Living Wage of £7.20 which will be introduced in April, becoming the new minimum wage for employees over 25.

The employers surveyed said that almost one in four of their employees (23%) are currently on less than the level of the National Living Wage (£7.20 an hour) and nearly two in five (39%) are on less than £9 an hour – the target rate for the National Living Wage in 2020.

To cover the overheads, around a third of businesses that took part in the survey said that they are planning to pass on the increased costs to customers while over a quarter said they plan to reduce their workforce. John Harding, employment tax partner at PwC said: “While many employers should be able to afford the increase to their wage bill, the disproportionate impact on sectors employing a large number of lower paid workers such as retail, transport and logistics, healthcare and hospitality and leisure cannot be ignored…Organisations must have a plan to deal with these costs, that isn’t simply passing them on to consumers or reducing headcount.”