For over 25 years, companies have valued our ability to serve as their early warning system—to interpret emerging issues and trends in the sustainable development agenda and help them anticipate, understand, and respond to shifts in the business landscape. Our Ten Trends for 2015 series distills SustainAbility’s thinking over the past year and forecasts the issues that will shape the sustainable development agenda in 2015. This is the first in our series of blogs expanding upon these trends.
Several developments last year—such as calls for banning zero-hours contracts in the UK, the escalation of the living wage issue in the US, UK, and parts of Asia, and initiatives by corporates to address root causes of inequality—have brought into sharper focus the question: What does the workplace—when it’s fit for the future—look like?
The reality of an ageing workforce in developed economies is profoundly shifting how businesses reconfigure working practices and accommodate a multi-generational workforce. McDonald’s has warned that Europe faces a future of stunted growth unless employers take measures to bring young people and older workers into the labour force. Several companies that have focused on adapting their business practices to accommodate older workers are seeing financial returns and productivity gains. For example, since retailer B&Q began actively recruiting store clerks over the age of 50, its staff turnover is six times lower, while short-term absenteeism has decreased by 39%. Unilever UK estimates that it gains six euros in productivity for every one euro spent on a wellness program designed to prolong the working life of its older employees.
In the UK, zero-hours contracts have been receiving attention with regard to hiring young workers. Zero-hours contracts are controversial as they allow employers to hire staff with no guarantee of work. In some zero-hours contracts, the individuals are obliged to accept work if offered, while in others they are not. Some zero-hours contracts also prevent the individual from working for other companies, even when the employer has no work to offer. Labour leader Ed Miliband likened the use of zero-hours contracts by retailer Sports Direct to “Victorian” working practices and UK Business Secretary announced plans to ban exclusivity clauses in zero-hours contracts providing workers more flexibility.
Living wage remains a live topic with New York City Mayor Bill de Blasio signing an executive order. The order expands on the current Living Wage law that increases the living wage for workers who do not receive benefits including retailers, fast-food restaurants, and construction contractors. Over 1,000 companies in the UK are now committed to paying the living wage or above, in part due to mounting pressure from campaigning organisations.
Several initiatives by companies and governments last year reflected a shift in approach to employee wellbeing and responded to the increasingly changing needs of a diverse and multi-generational workforce. Starbucks announced that it would provide funding for employees to receive college education. Subsequently it announced upgrading its scheduling software to enable managers to make more consistent work shifts that account for family-friendly schedules. Malaysia is offering tax incentives to companies that establish nurseries and allow for flexible working hours, thus enabling mothers to join and remain in the workforce.
Looking ahead to 2015, the General Election in the UK will bring greater attention to zero-hours contracts and living wage. However, businesses recognise that addressing wage disparity is only part of the puzzle when considering employee wellbeing and engagement. Workplaces that are fit for the future will identify the broader drivers of wellbeing for employees such as flexible working hours and schedules, terms of contracts that are beneficial for both employers and employees, and adaptability to employees working until later age.