Employees struggling to make work pay

Struggling employees need additional help, says Tom Henderson. Picture: TSPL

Work has always been seen as the route out of poverty, however with more than half the UK working population in poverty, and at its highest level ever, can we make work pay? In my role as Tackling In-work Poverty manager at Scottish Business in the Community (SBC), I’ve witnessed positive steps employers can take to address issues of poverty, which in turn will help their business be more resilient and productive and make the economy stronger. Our Tackling In-work Poverty team has visited over a hundred businesses across Scotland this year, of all sizes and in all sectors.

For so many to be in work but in poverty, this would suggest that the type and indeed the majority of jobs currently on offer are low-paid, minimum-wage, part-time, temporary, below “living wage” or based on zero-hours contracts.

Our team is raising awareness among businesses of the forthcoming changes in the welfare system, which are anticipated to remove as much as £1.6 billion from the Scottish economy – equivalent to an average of £480 per working-aged adult.

Disposable income will be reduced and less will be spent across a range of areas in the Scottish economy.

Those working but in poverty could be on a cocktail of benefits to supplement their income and a reduction in welfare payments could result in a host of issues for businesses to deal with – such as the impact on health and wellbeing, an increase in employee turnover and problems relating to “in-work conditionality”.

Widening income inequality has wiped as much as six to nine percentage points off the UK growth rate, a new report from the OECD shows. Income disparities are the single biggest impact on growth.

So poverty in or out of work is an important issue for us all.

A workforce that is under-employed or over-employed, under-paid or with people in it whose potential is not fully valued, will never be as engaged or productive then one that is. Addressing in-work poverty is a way to tackle many of these issues and the good news is that businesses do not have to do it alone.

SBC, working with our members and key partners, including the Joseph Rowntree Foundation, Child Poverty Action Group, Citizens Advice Scotland, and the UK Social Mobility and Childhood Poverty Commission, have looked at the issues and research, and are finding practical solutions for businesses and employees.

SBC has also been holding Tackling In-work Poverty events with local partners throughout the country, giving local businesses a greater awareness of how poverty, and the welfare reforms, will affect their business.

Businesses are starting to turn their attention to this issue and their role in addressing it.

They are acknowledging that they are likely to have employees in poverty who are getting welfare payments to supplement their income.

Businesses have more of an understanding of how this will directly affect them. And, while still maintaining the appropriate employer/employee relationships, are making hands-on changes to their business practices to tackle in-work poverty.

This doesn’t always mean having to raise wages; they will be able to signpost employees to support from other agencies who can help people manage their income.

They will be looking at their in-work recruitment and progression processes to make them fairer for all staff and they will understand and meet their legal obligations, and work to go beyond this, offering flexible working, increased hours, and contracts that suit the employee’s circumstances too.

They will also be working with other businesses in their local communities to tackle the grassroots causes of poverty.

An hour a week in a local school talking about the world of work or helping a youngster with their reading skills is a valuable contribution.

And yes, whenever possible, they reward productivity by progressing people to an even fairer wage, thus creating an ethos and culture of shared values within their businesses.

Dramatic challenges in the economic climate have captured our attention over the last few years, however our shared goal of a fairer and more prosperous Scotland can only be met if we have an engaged and productive workforce – with every employee fulfilling their potential and aspirations.

The likelihood is that you will have employees and colleagues, working with you, who are currently experiencing poverty, either themselves or indeed through their wider family unit.

Most employers are good employers and when they recognise that they can help, they will.

Our recent SBC “call to action” demonstrates how ever more important the role of business in society is, and by working more collaboratively and with smarter methods, we can do better for all.

We encourage you to contact SBC to find out how you can take action.

• Tom Henderson is programme manager with Scottish Business in the Community