On The Horizon – December 2023

Jennifer Liston-Smith’s monthly review reflects on key themes, news and public policy updates in the world of combining work and family for organisations, parents and carers.

Author: Jennifer Liston-Smith, Head of Thought Leadership, Bright Horizons

Don’t we all want the same thing?

It’s that time of year when – if we’re prone to balancing the interests of wide groups of stakeholders – we might turn to farmed turkeys to seek their considered stance on the coming festive season.

The debate we’re considering here this month is not based on such radically opposed interests. While it might be hard to reconcile the ambitions of turkeys and festive party-goers, it seems there is more chance of a win-win outcome when we weigh up the interests of employers and employees. 

Can workers achieve wellbeing while employers focus on productivity?

Last month, I was looking ahead to our HR Debate for senior leaders hosted by our client Hogan Lovells on 29th November. In ‘Performance vs Empathy: do Employers have to Choose?’, we explored whether productivity and wellbeing are competing agendas.

The Covid pandemic escalated the attention paid to wellbeing and the volatile jobs market that followed dialled up employer emphasis on positive employee experience. Some perceive that power is now shifting back towards employers, in these more uncertain times, where talk turns to efficiency and productivity. Or are employers still focused on the need to engage, empathise, and support a workforce whose eye is firmly on work-life fit?

The view in the room was that Productivity and Empathy are compatible and indeed that it’s hard to have optimum productivity unless we first listen and respond to needs. Kate Holden, UK Head of HR at Hogan Lovells finds that great performance follows when we do this. She outlined the provisions in place at the firm, including Bright Horizons Back-Up Care and Parent Transition Programme – which tie in with the firm’s view that to get the best from people, employers need to empower them in their work and home life needs. A quote from a back-up care service user at the firm sums up the work-life fit value as well as the productivity supported when employers anticipate needs: “I had a lot on my plate regarding work and [my child] was ill and could not go to nursery. Being able to have someone that I knew could be trusted to come to my home and look after [my child] whilst I got my work done was great, not just for me personally but for my team and the clients relying on me to get the work done. It also meant I could get some much-needed sleep that evening rather than working until 2am to get things done.”

Cristina Galindo, International Business Director at Birdeo reminded us of the multigenerational workforce – with expectations of work-life balance at all stages – also drawing on Prof Lynda Gratton’s concept of the 100 year life, meaning that career is no longer a single, linear phase, sandwiched between education and retirement. With more fluid and cyclical working lives, if employees cannot see their values and aspirations matched by their employer, they will leave.

This is backed-up by current news, such as research from Tiger Recruitment with 1,800 UK professionals showing 4 in 10 are planning to look for a new job in the upcoming year, motivated by higher salary, better work-life balance and benefits. So news of a more cautious talent market may be premature. Similarly, in a survey by life insurance broker Reassured, 34% cited work-life balance as a significant factor in decisions to leave their employer, ranking second only to poor pay (37%). HR Director reported the most sought-after benefits include childcare which enhanced sense of belonging for nearly a quarter of employees overall (15% for men and 29% for women). Adult caregiving support increased women’s sense of belonging by 45%.

The legal imperative

Ed Bowyer, Partner in the Employment Team at Hogan Lovells addressed the coming regulatory changes relevant to family life to shape the debate. In some aspects, legislation is tending towards more choice for employees (a Day 1 right to request flexible working and a simplified process) and greater family-friendliness (longer protection from redundancy following parental leave; neonatal leave and pay, carer’s leave and slightly more flexibility around paternity leave). So, there is some obligation on employers to further evolve family support, simply to keep pace with public policy. Leading employers will of course be ahead of this and setting the tone for legislation, rather than catching up.

On the subject of parental leave, the statutory maternity, paternity, adoption, shared parental leaveand parental bereavement leave pay rates have been published and will rise from £172.48 to £184.03 per week next April. Like last year, these increases are in line with inflation (6.7% this time) though a lower uplift than the previous year when being in line with inflation meant a much bigger hike.

Managers and messaging

The Performance vs Empathy debate highlighted the need for skilful, well-supported managers, who can remove barriers to performance that arise when family needs clash with work demands. Helpful tools here, in the view of the room, include:

  • Training in overcoming bias, especially important where managers have been promoted for technical achievements rather than people skills.
  • Checklists for key conversations e.g. new parents, becoming a carer
  • Story-telling: the power of individuals sharing insights into what it’s like to be them, most powerful when it takes place in open networking events.
  • Reverse mentoring, or having a shadow board to scrutinise strategy and policy against Diversity, Equity & Inclusion standards.

There was also an interesting discussion on inadvertent messages: is there a line between supporting and being seen to dictate a certain lifestyle when it comes to life stage choices and policies? With a policy intended to be helpful such as egg-freezing, might we be giving messages about delaying family? Making this part of a wider family-building programme with broad choices softens that unintended message.

Both employers and employees are squeezed

The debate about productivity vs wellbeing was a reminder that empathy should not only go one way. Employers are squeezed too. The National Living Wage (NLW) will increase by over £1 an hour from April 2024. Chancellor Jeremy Hunt has said it will be the largest ever increase and will mean that, “since 2010, the NLW will have doubled in cash terms from around £10,500 to nearly £21,000 a year for a full-time worker”. The age threshold also lowers to 21. This is good news for workers when the cost of living crisis is still very real for many. The inflation rate of around 4.6% means price rises are slowing but they are still rising and the rate of that rise, though falling, is still higher than other similar economies such as the US and the Eurozone. This shows up perhaps nowhere more than in food banks which have the double challenge of high demand and lower donations, as families feel less able to share, given their own squeezed budgets, particularly in light of higher mortgages due to raised interest rates aimed at lowering inflation.

The increased minimum wage is therefore clearly a positive for workers, yet also impacts employers. There are cross-sector concerns about the rising costs and wage inflation. As well as the broad range of employers commenting on this, the early years sector has seen representative voices warning that the “increase the national living wage by almost 10 per cent will risk the livelihood of many early years settings”.

Any further reduction in the availability of childcare would also be a worry to employers who rely on this as part of the business infrastructure. The promised expansion of funded childcare places is being relied on to enable more families to enter the workforce or extend their hours. Large providers such as Bright Horizons are able to make sustained investments in career development, wellbeing, pay and benefits; however smaller providers, having struggled to keep pace with uplifts in the costs of energy, food and salaries may be unable to offer the funded places at the planned rates.

There is never only one side to a debate and as we work through these extraordinary times, we can hope that the quality of conversation between employee and employer, which became much more candid and personal during the pandemic will be sustained so employers continue to relate to the employee voice and see this as the route to productivity.