Category Archives: business

Cost: £99bn and 300,000 lost jobs a year Cause: poor mental health

Every year, poor mental health costs the UK economy up to £99 billion as productivity of employees falls and 300,000 people with mental health problems face the personal tragedy of losing their jobs.

But a report by the UK government, ‘Thriving at Work: The Independent Review of Mental Health and Employers’, shows that the status quo can and must be challenged
and that addressing the issue and fixing the problem not only cuts costs and improves employees’ wellbeing, but it can also have a positive financial return on investment for companies.

 The costsScreen Shot 2017-10-26 at 11.02.39

UK employers face annual costs of between £33 and £42 billion; more than 50 percent of those costs coming from ‘presenteeism’, when workers are less productive, and sickness absence and staff turnover.  The government picks up a tab of £24-27 billion much of it from welfare and NHS costs. The overall £99 billion includes all of the above costs, together with the opportunity costs of companies and the economy not being at full production and of the NHS not having to dedicate resources to mental health interventions – money that could be saved or spent elsewhere

 The opportunity

Equally – there are huge opportunities to cut these costs, improve productivity and improve the lot of the employee at the same time. Studies by Deloitte, cited in the report, show that where investment is made in improving mental health, it gives a consistently positive return with one case showing a £9.98 return on investment of £1.

 The vision

While the solutions should be tailored for individuals and by company, the value of the report will initially be that the issue of mental health in the workplace cannot now be ignored by employers.  In addition, individual employees are also encouraged to be aware of their own and other people’s mental health.

The report’s overall ambitions include that:

  • Employees in all types of employment will have ‘good work’ contributing to positive mental health
  • All of us will have knowledge and confidence to understand and look after our mental health.
  • All organizations, regardless of size, will have the awareness and tools to identify and prevent work factors leading to mental ill-health
  • They will be equipped to support individuals with a mental health condition to thrive
  • Organizations will have access to timely help to reduce sickness absences caused by mental ill-health

 Practical actions

The report highlights a set of actions, which over a decade, are designed to slash by a third the number of people leaving jobs due to mental health problems.  These practical interventions – or mental health ‘core standards’ that all companies must do, include:

  • Produce, implement and communicate a ‘mental health at work plan’
  • Develop mental health awareness among employees
  • Encourage open conversations about mental health and the support available when employees are struggling
  • Provide employees with good working conditions and ensure they have a healthy work/life balance and opportunities for development
  • Promote effective people management through line managers and supervisors
  • Routinely monitor employees’ mental health and wellbeing

Best practice

In addition – and depending on their size and maturity, companies in a leading position on promoting mental health at work will also adopt some or all of the following ‘enhanced standards’:

  • Increase transparency an accountability through internal and external reporting [on mental health]
  • Demonstrate accountability
  • Improve the disclosure process
  • Ensure provision of tailored in-house mental support and sign-posting to clinical support

The bottom line results from these interventions could mean 100,000 fewer people leaving their jobs due to mental health problems and employers should be willing to pay £1 to get nearly £10 back.

All this could be great news for people suffering poor mental health, for the NHS and through increased productivity, for the wider economy.  Overall, it will be one element that promotes a decent, respectful society.

The key will now be implementation, transparently measuring and reporting progress and ongoing government focus on the topic.  Otherwise, as the saying goes, the road to hell is paved with good intentions.

Google and PA put pressure on local journalists with ‘robot reporters’

Google yesterday announced an $800,000 project with the UK’s Press Association news agency, in which PA will develop ‘robot reporters’ that will write 30,000 articles a month for local newspapers.

That Orwellian piece of news got me thinking about local journalism and whether an algorithm, let loose in council databases, really can replace the reporter. Is it good for news journalism, is it good for reporters and what effect could it have on the role local papers play as a check and balance on local democracy?

My first contact with local journalism was when I did some work experience on a local weekly newspaper in the UK in the summer holiday of 1977 working with reporters and photographers. In many ways it was the age of the dinosaur; papers then were produced with huge production inefficiencies and the printing end of the operation was a tough closed shop with endemic restrictive practices and over-manning.  But the local paper, as it hit the street, did have the effect of keeping public authorities honest and often exposed them if they weren’t.

The newspaper office of the ‘70s had that heavy stationery-cigarette combination smell created by stacks of newspapers, copy pads, spikes, brimming ashtrays, wastepaper typewriterbaskets and rancid coffee cups. It was a world that hadn’t changed much since the 1920s – all reporters used shorthand, clattered away on manual typewriters and phoned-in copy (stories) from red phone boxes on street corners.

Fierce news editors demanded the facts and wielded a ‘blue pencil’, striking out comment or sloppy writing: words like ‘recently’, ‘quite’, ‘very’, and ‘big’ were outlawed. Did the story answer the where, when, what, why and how? If not – go away and do it again.

There were stacks of local and county council committee papers that reporters had to read and mark up to ensure a good story wasn’t missed – and they attended the meetings, known as ‘night jobs’, compensated for by an expense allowance of a quid or so for a pie and a pint for your evening meal.

Story tips came from indiscrete coppers, court ushers, friendly council officers and from blokes in pubs.  There was a weekly duty list for court reporting, ensuring all courts were covered or at least the charge sheet was collected and scanned for important cases.

Parcels of news stories marked ‘Urgent, useless if delayed’ were taken to the bus station and given to a driver who delivered it by bus to a neighbouring town. A messenger would meet the bus and deliver the parcel to the print works where a team of compositors would re-type the reporters’ stories into a type-setting machine.

Compositors cut, waxed and pasted paper columns of type onto a page layout, just like cutting an article out of a newspaper and gluing it into scrapbook. Printing plates were made from these layouts and fitted to an ancient Goss web-offset printing press, which thundered away producing the following morning’s paper.

Screen Shot 2017-07-07 at 10.07.05.png

Printing press from circa 1905

These inefficient ‘dinosaur’ newspapers and human news reporters frequently produced exclusive, investigative breaking news about ‘rotten boroughs’, often picked up by national papers, radio and TV news. The result was that a staff of half a dozen journalists often delivered a big helping of accountability for those in power locally.

And today, what of those newspapers in the summer of 2017 – if they haven’t already closed? On the positive side, the operations are far more efficient from a production point of view – email and shared drives are clearly more efficient than putting news stories on a bus…. There’s less paper and no ashtrays in the office and fewer reporters who rarely leave their desks.  That reduced staff have to fill paper and web editions, copy is transmitted in milliseconds, mobile phones that aid the job of reporters and photographers, citizen journalists and bloggers.

Those local papers that have survived can’t spare reporters to go to council meetings or read the committee papers and there’s no court reporting. There’s less time to dig around and tease out a really strong story, while press releases are being copied and pasted, unedited, into papers to fill more white space.  Great for the PR company writing press releases, but not great for an independent press. Ironically, the original Google/PA roboreporter announcement contained a typo in the first line (yes, really) – which is faithfully reproduced in many news stories on the topic. QED.

Google’s robot reporters project – in their words – ‘supports journalism’, but not journalists (my words).  In the final analysis, though, churning out 30,000 stories a month is less of a news operation and more intended to net more readers for the new content, alongside which Google can place its paid-for ads.  Follow the money…

The result of automation will be fewer reporters, fewer investigative, exclusive splashes on sharp practice in public organisations and those in authority are less likely to be held accountable. The local newspaper – paper and web – becomes an increasingly endangered species as their output is automated and quality diminished. The ‘food chain’ of stories from local news teams through to the national media has all but ceased.

And while the internet has brought information to billions of people, a team of Google-sponsored robot reporters isn’t going to be enough to provide sufficient checks and balances on democracy locally, or even nationally. Because even robots require someone to create real news stories and content in the first place before they can ‘scrape’ it and pass it on.

News isn’t so much being suppressed, it’s not even being created. As a result, there’s never been a better time to be a malevolent or incompetent politician, con man, dodgy businessman, criminal or corrupt public official.

Photo credits: Typewriter by Ian Livesey

Goss Printing press: By Unknown (Life time: Unknown.) [Public domain], via Wikimedia Commons

‘Human error’ blamed for BA’s server crash. But which human and what error?

When there’s an accident at work, it’s often the worker involved who is blamed.

Sometimes – after lengthy and thorough investigations – the multiple causes of accidents are revealed to be much broader than ‘someone doing something stupid’ and the hope is that the BA IS system crash investigation will be as thorough.

Just like in a safety investigation, the discipline of applying ‘root cause analysis’ will seek to find out what happened to cause the failure and more importantly, why it happened.  The ‘why’ is critical because it identifies systemic, cultural and management failures – the root causesPlug pic.

Fixing root causes permanently makes a company more resilient – first it’s less likely to face a similar problem and second, if it does, its resulting contingency planning will mean it ‘bounces back’ from problems and recovers faster in future.

As an example of some ‘why’ issues: why did the contractor re-connect power without going through a process and or without authority?  Why did they not know about the process, or if they did, why was it ignored. And digging a little deeper: how is the process developed and who has management responsibility for the process and for reviewing and auditing that it’s applied properly. How are ‘near misses’ reported, recorded and shared to the benefit of refining the process?  In terms of culture, are contractors pushed to get things done in double-quick time in order to reduce downtime, do they regularly feel they have to resort to short-cuts in order to meet management expectations?

In manufacturing companies – this is characterised by ‘productivity over everything’; do what you have to do to get it done fast.  Is there constant squeeze on costs?  Is there little interest among management in hearing about the consequences of the squeeze, or do they just insist that all activities must continue, but that they must be done more efficiently.

Capital cost reduction, combined with reduction in staff may also result in a situation where the margin for error or the presence of back-up systems compounded the effect of the error. Was the cost of failure factored-in to financial decisions and how much did management think a failure – with all its attendant brand damage – would cost?

And a proper root cause analysis of BA’s outage will get to the heart of the culture that created the circumstances in which a contractor did what they did – either because they didn’t know what the correct procedure was, or felt pressured to override the process.

All this ‘digging into the issue’ may seem tedious, but it’s as tedious as a pilot doing a pre-flight check in the same way, before every flight. As yet, the total cost of the BA outage is not known, but creating a culture that avoids future incidents will certainly save a fortune.

The culture of the flight deck would be a good aspiration for many companies.

Thanks to Kevin Grocki for the picture, used under Creative Commons Licence

The theme of Business Continuity Awareness Week is Cyber Security. No, really…

If businesses and public organizations needed a kick in the backside over their cyber crisis preparedness, then many got it over the weekend as the ransomware ‘Wanna Decryptor’ paralysed hundreds of thousands of users and systems in more than 100 countries, including hospitals and doctors’ practices in the UK National Health Service.

So the irony of this being ‘Business Continuity Awareness Week’ #BCAW2017 is only heightened by the fact that the theme of the week is ‘Cyber Security’. But the timing of this week – and the theme – couldn’t be better.Screen Shot 2017-05-15 at 10.08.25

As the hand-wringing, blame-gaming and shock-horror media coverage continues – it’s worth spending a few minutes leafing through the Business Continuity Institute’s guide on preventing cyber attack (this is safe to click, by the way). Sure, there is some VERY basic advice in the guide – like not using ‘password’ as your ‘password’, but don’t roll your eyes too quickly.  One in five passwords are things like ‘1234567’ or ‘qwerty’ – and other entirely predictable passwords. It’s clear people need reminding of the simplest security habits.

The BCI’s guide won’t solve complex IS security issues, but it’s often the weakest links that allow the hackers in to do their business.  That weakest link is commonly your company’s IS or information security policy (or lack of it) – and if you have a policy – how well employees have been trained to implement the policy AND how diligently they act on those policy requirements.

I’m in trouble – send money!

And finally, it’s not only the junior or non-techie employees who let the hackers in.  Scammers and phishers target all levels of an organization in an attempt to breach firewalls or just separate someone from their money.

I’m aware of one CEO who knew what a ‘419’ scam was (wonder how many of you opened that link…) and how to avoid it, but was nearly stung by another email scam.  We just managed to stop him from sending his credit card details (including the ‘magic code’ on the back) to an employee whose email to the CEO claimed he was in trouble abroad, having had his laptop, wallet and phone stolen and who needed credit card details for him to be able to book into a hotel for the night.  Except it wasn’t the employee’s internet email address and he wasn’t in trouble… and, and, and.

Is BlackRock’s CEO Larry Fink a champion of the worker, or an investment manager? Well both actually

Last year Larry Fink’s letter to CEOs of companies in which BlackRock invests urged them and their boards to look forward (as opposed to back) at strategic issues affecting value creation. (See my blog from 2016).

This year, his letter to CEOs urges them specifically to look at a ticking timebomb: the lifecycle of employees’ careers – not only ongoing retraining and ongoing education of workers, but also of actively preparing them for a secure, solvent retirement.

The letter covers some strategic corporate and governance issues on which BlackRock will hold companies to account, such as:

  • Globalization and more particularly the effect of automation on lower-skilled employees’ jobs and the consequent gulf in their earnings versus highly-educated employees
  • As an active, long-term investor, engaging with companies on behalf of their clients, and voting against incumbent directors or misaligned executive compensation, when companies are not sufficiently responsive to BlackRock’s input
  • Reviewing companies on Environmental Social and Governance (ESG) performance – often seen as an indication of a company’s appreciation of long-term factors that affect value creation and how seriously global companies see themselves as part of a local community
  • Research and technology and employees’ development and long-term financial wellbeing

Fink sees the government’s role as supporting the private sector in addressing these challenges by creating a capital gains regime that rewards long-term investment, tax reform, infrastructure investment and strengthening retirement systems.

On tax reform, he doesn’t want to see cash trapped overseas simply being repatriated in share buybacks, but used for strategic growth initiatives.  Infrastructure investment will promote employment and may go some way towards providing jobs to less skilled workers who have lost work as a result of their jobs being automated.  “However,’ he notes,’…it’s not a solution to that problem.”

headcount-cuts

Cutting the headcount

Companies that are currently struggling for technical talent must build their education and training capabilities in order to retrain existing employees for the new demands of the high-tech and connected workplace.  In ‘helping the employee who once operated the
machine to learn to program it’, companies will have ongoing access to talent, while fulfilling their responsibilities to their employees. Chopping out older employees and bringing in fresh talent, apparently, might not be sustainable or competitive.

And once employees reach retirement, Larry Fink is concerned by two issues:

First, that millions of workers are not covered by employer-provided retirement plans and he’d like to see this change via a selection of options, including auto-enrolment, auto-escalation, pooled plans for small businesses and ‘potentially even a mandatory contribution model like Canada’s.’

Second – as many pensions move from defined contribution to defined contribution/money purchase pensions, the financial planning and responsibility for retirement funds moves away from the employer and falls more on the individual pensioner.  In this context, companies have a role in ensuring that their employees become more financially literate, while asset managers also have a responsibility to educate investors so they can make smart investment decisions.

“If we are going to solve the retirement crisis – and help workers adjust to the globalized world – businesses need to hold themselves to a high standard and act with the conviction that retirement security is a matter of shared economic security,” writes Fink

Commentary: As the Baby Boomer population ‘bulge’ in the West creates more pensioners supported by fewer workers over the coming years, companies and governments must review their terms of reference.

Older workers, made redundant before retirement give the handloomsystem a ‘double whammy’ shock as an employee moves from being a net contributor to tax, their pension pot and social costs, to being an early ‘taker’ of benefits.

Companies look like they win twice with a reduced wage bill and no ongoing social or pension costs.

The option of passing older employees on to the State to look after, without penalty, seems to be an implicit incentive for companies to do just that.

This isn’t sustainable, but a last resort would be for governments to hike taxes charged to employers to pay for taking on responsibility for the companies’ ‘surplus workers’.

In this context, governments that find ways to encourage, support and incentivize companies to retain, retrain and educate their older employees will not only help in assuring continuity of employment but will also limit avoidable social security costs for unemployment and pension support.

Loom photo and header photo: Courtesy ILO. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 IGO License. To view a copy of this license, visit creativecommons.org/licenses/by-nc-nd/3.0/igo/deed.en_US