Good Work will help businesses to bounce back better from COVID-19

The context

Right now across the country, many businesses are bringing back staff, reopening, rebuilding or expanding their operations, seeking to adapt to the challenges and opportunities of the COVID-19 economy.

Needless to say, there have been several false starts on this journey. The Bank of England has recently revised its economic recovery forecasts to suggest a more positive trajectory. Unemployment is expected to peak at a lower rate than first feared – though this is little comfort to the people who will be affected, given how detrimental being unemployed is to wellbeing – and jobs growth has been stronger recently too.

However, there is still a great deal of uncertainty ahead. Uncertainty about how far and how fast COVID restrictions may be relaxed to allow something like ‘normal trading’ to resume. Uncertainty about how much unemployment and churn in the labour market may follow the ending of the Coronavirus Jobs Retention Scheme, which has operated like a life support for closed down and restricted businesses. This last year has exerted a severe toll on the financial position of many businesses and households. But there may also be a renewed sense of solidarity in many firms, as business owners, managers and staff have sought to navigate the pandemic together; and we have seen extraordinary examples of business creativity and innovation.

The Chancellor’s spring budget included measures intended to encourage businesses to continue to innovate and invest in new ways of doing things – in the hope that this will contribute towards a stronger ‘bounce back’ for business and aid the national recovery. Our call to action for businesses is to think concertedly about how to achieve a rebound in productivity through a focus on good job design and employment practices.

The links between good work and productivity

We are the Carnegie UK Trust are dedicated to changing society in ways that improve wellbeing. The evidence shows that while being in a job is good for wellbeing (compared to being unemployed), being in a good quality job is even better. Work which offers key ‘good work’ characteristics[1], such as adequate level of income and opportunities for training, development, voice, fulfilment or social connections, produce a greater wellbeing boost than forms of work which lack these. While growing evidence suggests that low paid and precarious work is almost as bad for wellbeing as being unemployed. This is why over the last five years the Carnegie UK Trust has pursued a programme of activity geared towards understanding the mechanisms to unlock good work for more people.

Many business leaders and managers share our aspiration for a labour market that offers good quality work, and want to be responsible employers. Intuitively, it makes sense to many employers that if they treat their people well, they will respond in kind, while if they are treated badly, employees are less likely to go that extra mile or to offer their ideas about how processes could be made more efficient. But we can observe from the success of the Living Wage campaign, that when organisational decision makers are faced with multiple competing pressures and constraints, having a clear grasp of the return on investment can solidify the commitment to delivering good work employment practices.

Our evidence

Before the onset of the pandemic, the Carnegie UK Trust had been researching the links between good work and productivity to generate just such an evidence base. We commissioned new research and analysis from the Warwick Institute of Employment Research (IER) and qualitative research with employers undertaken with the RSA. We published a collection of essays presenting research, opinion and analysis on the routes to boosting job quality and productivity from nearly 20 key representatives from business, policy, trade unions and civil society. This previewed the key findings from IER’s research, showing a strong and compelling link between good work and worker productivity. We have delayed publishing IER’s full research reports while we undertook a new programme of work in response to the pandemic. But now, as businesses consider how to make the best use of their resources, creativity and people to weather the coronavirus storm and thrive going forward, the findings of this research feel more important than ever.

Key findings

The research undertaken by IER consists of a literature review and new analysis of UK job quality and productivity datasets, examining seven key dimensions of good work and looking at productivity outcomes in sectors. In this section, I summarise the key findings from this research, and what it means for businesses.

1. Good work and workplace productivity are positively correlated. Five of the seven dimensions of good work assessed in the research were positively associated with improved productivity: pay and benefits; job design and nature of work; social support and cohesion; voice and representation; and work-life balance. 

2. Not all good work practices are created equal. The strengths of the correlations varies amongst the seven dimensions. The relationship for voice and representation is particularly strong; work-life balance much less so. Of those dimensions that are positive and significant, the results suggest that there is 8% higher productivity in the sectors where workers are more satisfied with pay compared to those least satisfied. The same outcomes are found for job design and social support, and there is 14% higher productivity for the best voice and representation than in the poorest. See the table below, summarising the good work-productivity individual level regressions found in IER’S data analysis:

What does this mean? Employer practices that focus on different dimensions of good work – such as those focused on improving voice and representation, or the other strong performing variables in the table – may deliver more substantial workplace productivity gains than others.

3. Making work ‘decent’ rather than ‘perfect’ seems to the optimal point for generating productivity gains. The correlation is stronger for poor work and poor productivity. This means that taking steps to make ‘bad jobs’ better is likely to boost productivity more significantly than a focus on improving work within firms that is already offers relatively good job quality. This suggests that firms do not need to have ‘cutting edge’ employment and management practices in order to generate productivity gains. Business leaders and managers can make their firms’ jobs better and boost the productivity of their people by making relatively incremental changes in practice that contribute to job quality along the seven dimensions.

Turning evidence into practice

These findings are only the start, of course. More work is needed to improve the quality of the evidence, and to turn that evidence into practice.

On improving the evidence, IER is now working with the Office for National Statistics to generate a more comprehensive database to enable analysis of the links between good work and productivity at sector and firm level, in a major initiative funded by the ESRC’s Productivity Institute.

On turning evidence into practice, organisations like Be the Business, Investors in People and the CIPD offer a wealth of resources to help businesses make those practical changes needed to embed good work practices in a more systematic and confident way, and reap the benefits through boosting wellbeing for workers and improved worker productivity.

Maximising such good work employer practices is not only the right thing to do for wellbeing, it will be crucial to help businesses rebound after the pandemic.  

 Learn more: 

• Read the Literature Review
• Read the Empirical Findings report
• Read the Summary of Research Findings, first published in Can Good Work Solve the Productivity Puzzle in January 2020

[1] The Carnegie UK Trust uses a seven dimension framework to measure good work, which was produced by a cross-sectoral Measuring Job Quality Working Group convened by the Carnegie UK trust and the RSA in 2018.