HR news round-up: from EDI to job vacancies

McVey announces crackdown on EDI

The Government’s ‘common sense’ minister has announced that there will be no more contracts for external diversity spending in the Civil Service, unless signed off by a Government Minister.

Esther McVey told the Centre for Policy Studies this week that “that includes any agencies with current contracts, including Stonewall”.

She said that Secretaries of State and Permanent Secretaries will take responsibility for equality, diversity and inclusion within their departments, with new “impartiality guidance” issued “to ensure the Civil Service focuses on delivering for the public”.

She signalled that action will be taken to reduce staff networks too. She said: “Many may have started with good intentions, but some have moved to a place of political and religious activism, and such networks have no place in the Civil Service and will be closed down.”

McVey said: “Civil servants should not be distracted by issues unrelated to their ultimate role – delivering excellent results for the taxpayer. Networks that were meant to be about inclusivity too often in fact brought division and upset into the working environment.”

McVey said the action on EDI would extend to job applications. She stated: “After all of the important information – like responsibilities, pay and application details – there are large chunks of unnecessary text outlining what appears to be political hobby horses, distracting from the job application and off putting too many from applying. These unnecessary additions will be removed.”

She also stated that the Government opposes four-day weeks for public sector bodies, saying they don’t deliver value for taxpayers, despite evidence showing that they boost retention and productivity.

Meanwhile, an international tribunal has ruled that the Equality and Human Rights Commission [EHRC] should not be stripped of its top-level UN status as a national human rights organisation over its stance on trans issues. Stonewall and other organisations had asked for a “special review” into the EHRC, claiming it is anti-trans. The EHRC’s advice to the Government that protections for women on the grounds of their sex means their biological sex and not the gender they identify with was cited as a reason.

Vacancies continue to be a problem for many employers

Vacancies remain high compared to pre-Covid, despite an unsteady economic outlook, according to the Chartered Institute for Personnel and Development’s latest report.

Its Labour Market Outlook shows that employment intentions have fallen, however, while expected pay awards for the next 12 months remain steady, with the gap between public and private pay awards persisting. The report says this may make it more difficult to retain public sector staff in the coming months.

Over half (55%) of employers are looking to maintain their current staff level, although public sector employers are twice as likely as their private sector counterparts to decrease their total staff level in the next three months (19% v 9%).

Thirty-seven per cent of employers surveyed have hard-to-fill vacancies. Hard-to-fill vacancies are significantly higher in the public sector (52%) than the private sector (33%).

Toll of long-term sickness on women

Long-term sickness has become the top reason for women being out of the labour market, according to new TUC analysis of official statistics.

It shows that the number of women who are now economically inactive due to long-term sickness has increased by 503,000 (+48%) over the last five years to 1.54 million – the highest number since records began.

Economic inactivity due to long-term sickness has risen steeply for both men and women over the past five years, but women have been worse affected – with the number of men inactive due to long-term sickness rising by 37%.

This means that women account for 59% of the rise in economic inactivity due to long-term sickness over the past five years.

One of the big long-term health issues in women is the rise of musculoskeletal issues (arms, hands, legs, feet, back and neck problems) – up by 47%. Long-term illness due to mental illness such as depression and anxiety is up 27%, while absence due to conditions like cancer is up 15%. The largest increase was in the “other” category, which saw a rise of 138%.

The TUC said the sharp rise in long-term sickness was due to a combination of factors, including long NHS waiting lists and cuts to preventative services. In terms of community health services, TUC analysis shows that between October 2022 and March 2024, for instance, there has been a 15% increase in adults waiting for musculoskeletal care and a 25% increase in adults waiting for physiotherapy.

The TUC adds that another key factor in the rise in long-term sickness among women is job quality. Women, particularly BME women, are more likely to be in insecure work and on low pay, with BME women twice as likely to be on zero-hour contracts than white men.

Read more here.

Economic inactivity up again

Economic inactivity rates are up on the quarter, with over 50s and younger workers more likely to drop up, according to new figures from the Office for National Statistics.

Unemployment was also up on the quarter, on the year and on the pre-pandemic period, standing at 4.3%. The UK economic inactivity rate for people aged 16 to 64 years was estimated at 22.1% in January to March 2024, above estimates of a year ago, and increased in the latest quarter.

Increases in economic inactivity over the latest quarter were largely among those aged 50 to 64 years and those aged 16 to 24 years. The main drivers were temporary sickness, long-term sickness or retirement. The annual increase was largely because of students and those who were long-term sick.

Pay was also up. In real terms (adjusted for inflation), regular real pay was up 2% and total real pay was up 1.7% in January to March 2024.

Read more here.

Radical reform urged in Carer’s Allowance

The Committee for Work and Pensions has called on the Department for Work and Pensions to radically reform Carer’s Allowance.

The Committee has written to Secretary of State Mel Stride, calling for action on the benefit, including removing the cliff edge for earnings, replacing it with a tapered system and implementing an annual increase to the allowance.

The call came after a DWP-commissioned study was finally published showing ministers knew about the problems with the allowance three years ago.

Read more here.

Call for action on Waspi women

The Work and Pensions Committee is calling on the Government to bring proposals forward before the summer recess to provide compensation for the so-called WASPI women.

In a report published in March, the Parliamentary and Health Service Ombudsman (PHSO) asked Parliament to identify how to provide an appropriate remedy for women born in the 1950s who have suffered injustice due to maladministration on the part of Department for Work and Pensions (DWP) in relation to its failure to communicate the decision to raise the State Pension age, equalising it for men and women.

In a letter to Work and Pensions Secretary of State Mel Stride, following last week’s Committee session with the PHSO and campaigners from Women Against State Pension Inequality (WASPI), the Committee focused on what a remedy might look like. It said the evidence it received indicated support for payments to be based on the extent of change to an individual’s State Pension age and the notice of change they received.

Read more here.

‘78% dip into pension pot early’

More than three quarters of retirees have already dipped into their pension pots by the time they retire, according to new data from Scottish Widows.

Of the 78% who claim early, more than half (52%) withdraw funds five years before their Selected Retirement Age (SRA), according to the research, with 21% opting to start taking out funds nine-10 years before they retire.

Analysis of Scottish Widows workplace pension scheme customers’ behaviour, across 232,654 different retirement claim transactions between 2019 and 2023, revealed that only 20% wait until their SRA before drawing down on their pension.

The data revealed that the average amount a customer withdraws by age 65 is £47,000. Financial modelling by Scottish Widows shows how much that £47,000 could grow if it remained invested for longer:

– If the money stayed invested from age 55 (when the member would have first been able to take benefits) for an additional five years, they would have £13,925 more on average by the time they reach 60 . That figure rises to £24,661 if it were to stay invested for 10 years to age 65 – a rise of more than 50%; and to more than £38,000 if invested to age 70.

A separate modelling exercise was conducted under the assumption that members claimed the maximum tax-free cash available at age 55 which currently stands at 25%, equivalent to £11,750 If the same modelling was run with the remaining £32,250 left in members’ pots after taking the tax-free cash, savers would on average be £10,441 better off after five years, and £18,496 after 10 years if they decided to stay invested.

Read more here.

Lloyds employee engagement falls significantly

Lloyds Banking Group has suffered a significant drop in its employee engagement index since ordering hybrid employees to come to the office at least two days a week.

In 2020, Lloyds’ index set a record of 81%, but it fell to 66% last year following the change in policy. Lloyds had also made many job cuts as part of its long-term transformation strategy.

Speaking at the banking group’s AGM this week, Sir Robin Budenberg, Chair of Lloyds Banking Group, said: “Our leadership team has spent considerable time at line manager, divisional and all-colleague level, building greater understanding of the need to evolve in our ways of working, in order to enable us
to serve our customers better.”

The banking group, which has had a new CEO since September 2022, says that its hybrid approach, part of its Flexibility Works approach launched in July 2023, is “an industry-leading approach” and that it remains a strong advocate of flexibility and of providing equity and fair opportunities to all.

Flexibility Works includes an increase in fully paid maternity leave [up from 20 to 26 weeks], default job sharing opportunities, a work-from-anywhere policy over six weeks in summer, flexible bank holidays [except Christmas, Boxing Day and New Year’s Day, compressed hours for parents of children under two, for six months in key life moments such as bereavement and for those with disabilities or specific caring responsibilities for disabled children or dependants, and foster care flexibility [10 days paid leave]. The banking group also offers increased options for later career stages, including phased retirements, reskilling or reducing hours.

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