Good reputations are hard to build and all too easy to lose. Of course business isn’t the only institution in Britain facing a crisis of trust. But unlike others, business can end up paying a high price in lost profit, productivity and jobs.
Unions argue that no one has a greater interest in the success of a company than the workers whose livelihoods depend on it. Workers are wealth creators too and fair treatment is essential to protecting that investment. The better that people are treated – with fair pay, job security, a voice in how the company is run, good management, training opportunities, benefits like childcare support and a decent pension – the more productive they will be.
Good businesses see unions as positive partners. Unions can tell an employer what individual employees really think but may feel too afraid to say. We help prevent and resolve workplace conflict; deliver safer workplaces, and promote health and wellbeing; boost skills with union provided training; and, through collective bargaining, deliver fairer rewards. Many successful modern companies already recognise unions and know the added value a democratic voice for staff can bring.
But the UK’s corporate culture and governance needs to be fit for the Twenty-First Century if we are to have the better businesses Britain needs. Trust will only be rebuilt if pay inequality is brought back under control. FTSE100 CEOs now earn on average 123 times the average wage, while most workers have experienced the longest living standards squeeze in modern history. Stronger demand is vital if the UK’s productivity puzzle is to be solved – and fair pay is an important part of this solution. Without more money in their pockets, it’s hard to see how Britain’s workers can keep spending.
Investment and innovation are also essential to improved productivity, but the UK lags behind other countries. Only 40 per cent of British manufacturing firms are involved in technological innovation, compared to 70 per cent in Germany. We should all worry that, last year, the UK filed just 6,619 patents compared to 56,492 in Germany.
The British disease of short-termism also needs tackling. The TUC believes this is, in part, linked to shareholders holding too much of the balance of power – especially short-term shareholders who are often looking for a quick buck by cashing in on a firms’ assets, rather than building for the long term. Other stakeholder voices should be heard too – not least employees. Modernising corporate governance will be a vital step towards achieving the longer term high investment approach that Britain desperately needs.
Building better businesses also demands a more highly skilled economy. Good businesses train their staff. Businesses, trade unions and government must work together to make sure that training is at the heart of industrial strategies across UK sectors and regions. And we must stop overlooking low paid sectors in industrial strategy. No job, and no worker, should miss out on the chance to progress.
People no longer buy the idea that any job is better than no job. Low pay and lousy treatment is the wrong road for Britain. But if businesses commit to positive engagement with unions, higher investment, decent conditions for staff and a fair share of profits in every workers pay packet, we can look forward to economic growth in which everyone enjoys fair shares.
Frances O’Grady is General Secretary of the Trades Union Congress (TUC).
— Frances O’Grady (@FrancesOGrady) June 10, 2015