How the pandemic handed bargaining power back to the people
- Credit: ARCHANT
As employers look to recruit for the world after coronavirus, power is shifting from bosses to lower-paid workers. Eleanor Pringle and Angus Williams investigate.
The economic scales have shifted time and time again over the past year.
While many have lost out, lady luck has smiled upon some of the lowest-paid workers in the East of England.
As bosses gear up to trade unencumbered by coronavirus restrictions, they are rushing to fill positions.
But the region is now facing down a candidate driven market, with the likes of lorry drivers and chefs calling the shots.
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Industry body The Recruitment and Employment Confederation (REC) said almost 200,000 new job adverts being posted in the last week of June alone.
Professor Eric Smith of the University of Essex said the labour market was undergoing a “readjustment”.
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He said: “We’re seeing both demand-side and supply-side issues. On the demand side, there was a huge influx in the need for shelf stackers, and there was no need for people in the hospitality sector because they were all shut down.
“When the pandemic began I was in America and something we saw over there was that although we needed shelf stackers, no one wanted to do the job because it wasn’t safe.
“On top of the fact people might not want to do these jobs is the fact that they may no longer be qualified, as we’ve seen with HGV drivers and Brexit.
“Moving onto the supply side, there are a lot of people who left their jobs for furlough or otherwise during the pandemic that they now don’t want to go back to.
“The power is definitely in the hands of certain groups of workers. We’re seeing wages sky rocketing – people being paid sign-on bonuses and being offered other financial incentives. But businesses are also going to have to start looking at extras like flexible working and working conditions if they want to attract this labour.”
He added that the rebalancing of power from the executives to those lower down the ladder is not necessarily a good or bad thing.
He said: “It’s not down to calling this redistribution good or bad – but it is addressing inequality in a more organic way. In recent history we’ve seen inequality worsening and I think that this will go some way to rebalance that – without the government employing policies to redress it which may have unforeseen economic consequences.”
And Norfolk and Suffolk could stand to benefit, he added: “What we’re seeing on a regional basis is that some of the work supply is unavailable because during the pandemic they wanted to move out of London for a better quality of life.
“As a result we’ve got people moving up to areas like Norfolk, Suffolk and Essex, and the housing market has got really hot. That’s an increase in wealth in the region and presents potentially opportunities for businesses which can capitalise on that.
“However – there will be people who lose out in this situation and it’s a case of balancing that.”
Mark Robinson, a Unite regional organiser across Suffolk, Norfolk and Essex, said: “The shift in power between the employee and employer is always difficult because of the nature of employment law in this country – the balance will always be in favour of the employer.
“But employers have had to step up to the mark and make sure that their terms and conditions of employment are attractive, to get them to the position where they are not only able to recruit staff but to retain them as well.”
Mr Robinson identified road haulage and food production – two of East Anglia’s key industries – as being particularly hit by the phenomena.
“We’re seeing pay rises in blue chip companies – such as Birds Eye in Lowestoft and at Bernard Matthews – being higher than they have been over recent years,” he said.
So far, these wage increases have been relatively small, but that has still been enough to lure workers into a new job.
“It’s a well-known trend in food manufacturing for people to stay for relatively short periods of time, and go to the new site that opens up because they’re paying 50p an hour more,” he said.
“We have seen that, but those pay levels are still just above national living wage – they’re not at £11-12 an hour yet. Whether or not that will come depends on how critical the situation gets.”
He continued: “Many of these people have worked through the pandemics. They’ve been the key workers making the fish fingers and burgers to go into shops.
“There are inflationary pressures – we’re seeing it in shops already – and that is having an effect.
“But it is important to realising that the pay rises in these sectors over recent times have been relatively low.”
He added that these key industries had seen a large number of migrant workers in recent years who have now returned home because of the dual impacts of Brexit and the pandemic, also adding to the wage inflation.
But in other sectors of the economy staff are more likely to see improvements in working conditions that equate to real terms wage increases.
Tom Ginn, founder of hospitality recruitment firm BREAD Hospitality, said: “Two years ago you’d probably have one or two businesses on the Norfolk coast, offering a four-day working week. Now the majority of them are operating that way.
“Flexibility around evenings and weekends – it’s become a big thing.
“I think the industry has had a bit of a shakeup, which isn’t necessarily a bad thing.
“The staff are there, they need to be looked after more and they need to be attracted with more than just money.”
Mr Ginn said that the hospitality industry had been struggling to find fresh recruits into the sector for several years, but the pandemic had compounded this problem.
But in other sectors of the economy, different forces are at play.
Steve Dighton, group business development manager at Needham Market-based civil engineering firm Breheny, said the firm was struggling to recruit highly trained staff.
“From our point of view it’s tougher to recruit professional – engineers and the like,” he said.
“There seems to be a lot of competition in the marketplace with other companies to try poach our people as well.
“In construction there are large infrastructure projects going on around the country and that is attracting resources in terms of personnel and materials.
“Lower skilled recruitment is not so difficult for us. We like to try and grow our own so we’re taking on a lot of apprentices.
“We’ve recruit half a dozen apprentice plant workers – driving excavators and the like – as well apprentice ground workers each year and that’s continued the same as normal.”