CBI survey highlights employer concern over regulation

The Confederation of British Industry’s annual employment trends survey, published in September 2003, argues that the prospect of further employment regulation, especially from the EU, threatens to undermine the UK’s flexible labour market.

In September 2003, the Confederation of British Industry (CBI) published its sixth annual employment trends survey, conducted in conjunction with the Pertemps recruitment agency. The survey, carried out in May 2003, reports the responses of 551 private sector employers and covers a range of labour market issues, including key influences on competitiveness, flexible working, pensions, informing and consulting employees, and workforce diversity. A central theme of the report is that prospective regulatory developments such as the proposed EU Directive on temporary agency work (EU0306206F) and the possible removal of the scope for individuals to opt out of the 48-hour limit on average weekly working hours (UK0307102N) are viewed by employers as a 'threat to labour market flexibility' which 'could have a very serious impact on UK business'. Key findings are outlined below.

A majority of employers regard 'effective people management' as the key influence on present and future competitiveness, with 'management skills' being ranked as the most important human resources factor.

The great majority of respondents (84%) report using at least one flexible working option. As in 2002 (UK0210102N), part-time working is the most commonly used flexible working practice (82%), followed by job sharing (34%) and flexitime (32%).

During the first two months’ operation of the statutory right for employees to request flexible working (UK0304104F), effective from April 2003, 45% of companies had received at least one request and, on average, 1% of employees had requested flexible working. Few companies expected the new legislation to have a 'significant negative impact' on their businesses.

However, 59% of employers believed that the proposed EU temporary agency work Directive (UK0212101N) would impose additional costs on their business, even though 74% of employers which use agency workers said that they receive comparable or better terms and conditions than their permanent employees.

The survey finds that, on average, one-third (32%) of employees in respondent companies have signed an opt-out from the 48-hour limit on average weekly working hours. Employers with 50-199 employees have the largest proportion of employees who have opted out (41%), along with medium-sized companies with 200-499 employees (37%). Very small and very large ones tend to have fewer opted-out employees. However, relatively few employees (19%) who have signed an opt-out 'make regular use' of it in practice. Nearly 40% of companies believe the withdrawal of the individual opt-out would have a 'significant' or 'severe' impact on their business. Of these, 80% said that the greatest impact would be on their 'ability to meet customer needs'.

On pensions (UK0301109F), the survey found that half the employers who had final salary pension schemes in 2002 had closed it to new entrants, and that 'stakeholder' pensions are now the most popular form of provision.

Approaching half (47%) of respondent companies are reported to have permanent mechanisms for informing and consulting employees, typically a staff council, compared with 35% in the 2002 survey. The CBI attributes this increase largely to the forthcoming UK implementation of the EU information and consultation Directive (2002/14/EC) (EU0204207F) in March 2005 (UK0307106F). However, fewer companies overall reported trade union involvement in their consultative mechanisms. Over two-thirds (67%) said that no trade union representatives were involved, compared with 45% in 2002, suggesting that union involvement is less likely in new information and consultation arrangements. Regular meetings with project groups was the most popular direct method of employee involvement, reported by 90% of companies.

In terms of workforce diversity, the overwhelming majority of companies (83%) reported having written equal opportunities policies, but fewer undertake regular monitoring (40%) or train line managers on implementing the policy (30%).

Commenting on the survey findings, the CBI deputy director-general, John Cridland, said: 'We reject charges that we are anti-regulation. What we oppose is bad regulation. This survey shows that inappropriate and unnecessary EU rules are threatening the freedom of individuals to work when and how they choose.'