“You can’t support a family on that.” This is CEO of Tomorrow’s Company and former Morrisons HRD Norman Pickavance’s pronouncement on one of the examples he’s come across recently galvanising him around tackling in-work poverty.
“I was with an employment lawyer who talked to me about what happens when a person has an industrial injury. While they are perhaps waiting for a claim to be settled and getting back to full fitness they receive Statutory Sick Pay. This is £80 a week,” reports Pickavance, regarding just one of the scenarios that could easily push someone over the edge from just about managing to very much not.
“So after a month or so people quite easily slip into needing an expensive loan just to keep going,” he says. “We know that such financial worry is the highest source of stress for people on low incomes, and when you hear stories like this it is no wonder.”
Tomorrow’s Company’s campaign on this, for which HR magazine is media partner, kicked off with a screening of A Northern Soul, a documentary by Sean McAllister set in Hull that follows factory worker Steve Arnott. The screening was followed by a panel debate featuring Pickavance, McAllister and Martina Milburn, chair of the Social Mobility Commission and chief executive of The Prince’s Trust.
The campaign then brought together professionals from the financial services sector, debt agencies, food banks, housing organisations and employers – including HR directors drawn from HR magazine’s HR Most Influential rankings – in a series of Chatham House roundtables.
The next activity will be a series of workshops in the Autumn to draw up a list of simple ‘asks’ all employers could sign up to in order to tackle in-work poverty. These will then be piloted at organisations towards the end of this year and launched at a summit in January 2020.
Here’s what, through the recent roundtables, we’ve found so far:
Employers are aware of the issue but aren’t sure what to do
Thanks to recent coverage many companies know that in-work poverty is an issue, but they aren't always sure what their place in solving the problem is. However, some FDs are ignorant of the issue and need some measurability around it, some attendees reported.
<>Many were shocked at the stats
When presented with figures such as that four million people in the UK are in work but also living in poverty, and that 2.9 million children living in poverty are from working households, some of those attending the roundtables were surprised at the scale of the problem. They were particularly surprised that this disproportionately affects women (61% of all low-paid workers are women according to the Resolution Foundation), and that single-parent families are the family type most likely to be in poverty, with 90% of single parents women (Joseph Rowntree Foundation).
Assessing the scale of the problem can feel awkward
A recurring theme was that many employers aren't sure how to find out if their workers are affected. Personal finance is almost a taboo subject even among friends and family, people reported. So most employer-employee relationships aren't intimate enough for people to share financial problems with their bosses, especially when they know a pay rise isn't on the table. Attendees discussed the power of getting small groups of affected employees together to brainstorm solutions.
Employers aren't sure what the limits of their responsibilities are
Employers were wary of taking responsibility for fundamentally restructuring people's lives. They were clear that it shouldn’t be the purview of employers to mitigate the impact of austerity, and stressed the reality that most employers can’t afford to pay people more.
The rhetoric surrounding in-work poverty can be alienating
There is an unhelpful fatalism in the language often used to describe financial issues, roundtable attendees agreed. For example: ‘drowning in debt’ and ‘falling into debt’. Demands and rhetoric must therefore be more positively framed.
Getting senior support could be tricky
Several HR directors at the roundtables warned that it will be challenging to get senior-level support for anti-poverty initiatives if they're not framed as beneficial to the company. One said that the feeling at the top is that companies have been hit with a lot of new obligations in recent years, such as gender pay gap reporting and the National Living Wage. So an in-work poverty initiative could become ‘just another thing’.
Inspiring action is about selling the business case
Participants stressed the importance of highlighting to senior leaders the fact that fighting poverty in the workforce can provide a huge boost to productivity and significantly reduce absenteeism and long-term sick leave. Some pointed out the need to highlight the likely talent and skills gap in-work poverty is causing as a result of people not having the time and headspace to push themselves forward for opportunities and development.
The emphasis should be on simple but powerful changes
There are many offerings employers could consider that would be relatively inexpensive and easy to roll out, people felt. For example: pay flexing where people are given access to a certain percentage of their wages early. Other affordable initiatives discussed included swap shops where employees can exchange belongings, an extra day off each year for employees to sort their financial affairs and improve their financial wellbeing, and employers accessing discounts for staff by purchasing utilities such as electricity at scale.
Tomorrow’s Company and HR magazine would love you to join the debate. If you are interested in getting involved in the upcoming workshops and pilots please email editor Jenny Roper on jenny.roper@markallengroup.com