Business podcast: May 12th
Dominic Coyle and Barry O’Halloran discuss the Government’s jobs initiative, Cian Blackwell from Grant Thornton on corporate governance and Maeve Kneafsey on the IIA annual conference.
Current Account »
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Any job will do: is part-time working for keeps?
Of all the forces with the potential to flatter Ireland’s unemployment rate (not that the latest rate of 13.1 per cent could be described as flattering), arguably the most worrying is the shift towards part-time working. Migration flows and declining participation rates can be reversed. However, if the greater prevalence of part-time employment in the labour market reflects a greater casualisation of labour, the impact on our working lives could well outlast this recession.
Between 1998 and 2008, the percentage of people in employment who worked part-time hovered in the tight range of 16-18 per cent, Kieran Walsh of the Central Statistics Office (CSO) said on Wednesday. Going back further in time, the proportion of part-timers in the workforce has also more or less stuck to these levels. Now it has increased to 22 per cent: more than one in five people in employment work part-time. This, said Walsh, was an “interesting figure”, and one that signals a change in the make-up of employment.
The CSO’s data for 2009 employment trends, contained in the Quarterly National Household Survey (QNHS), gives the latest snapshot. While the number of people in full-time employment fell by 193,200 in the year to the fourth quarter of 2009, there was an increase of 26,400 in part-time employment over the period. The diverging trends suggest that employees are searching for any work that they can get, noted Goodbody Stockbrokers. “Any job will do,” its analysts remarked.
What’s that you say? Working part-time sounds like a waking dream come true? Indeed, many part-time workers, such as people easing their way into retirement or the parents of young children, do so by choice (although employers are not obliged to offer part-time positions to workers, a fact that helps limit promotional opportunities). Others, such as workers who have accepted short time in order to avoid redundancies may otherwise retain their employment conditions: part-time for everyone may be better than full-time for some and zero hours for those who are pushed out the door. But for the most part, this increased desperation can only work in favour of flexibility-demanding employers and against the long-term interests of employees.
Thanks to an EU directive on the matter – transposed into Irish law in 2001 – Irish employers are not officially permitted to treat part-time workers less favourably than a comparable full-time employee when it comes to the conditions of their employment (with some latitude on pensions). In practice, however, part-timers are often ghettoised into particular roles so that their jobs are not comparable to those of full-timers: less favourable treatment, including designation as a “casual” worker, ensues.
The CSO’s latest National Employment Survey – the most in-depth study of workplace conditions – found that full-time workers in October 2007 earned an average of €21.17 per hour, while their part-time equivalents earned an average hourly rate of €15.40.
The gap in pay can be partly explained by the concentration of part-time workers in lower-paid sectors. But it also reflects the fact that part-timers have less bargaining power than full-time employees. This is literally the case: the CSO asked QNHS respondents if they belonged to a trade union: 37 per cent of full-time employees did, but just 20 per cent of part-timers had the cushion of an organisation that will bargain on their behalf.
Time will tell if the part-time rate will stick at its current level, increase further, or fall back down to 16-18 per cent as the labour market recovers. My guess is that employers will prove unwilling to sacrifice the crisis-era levels of flexibility they have managed to win from workers. But another possibility is that the generation of enforced part-time workers could become so blissfully accustomed to their enviable work-life balance that they shun employers’ demands to return to full-time labour - and the cost of living is low enough for that to be affordable. I think I might be dreaming again.
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So Batt, any thoughts on the smart economy?
With crushing inevitablity, the Department of Enterprise, Trade and Employment has waved goodbye to Mary Coughlan and said a big hello to erstwhile Minister for Education Batt O’Keeffe. After his swapsies with the Tánaiste, O’Keeffe is now the man to turn to if you’re a struggling business in need of a subsidy or two. Out of work and looking for some kind of re-training gig? No, that’s still Coughlan, as her department is renamed the Department of Education and Skills (though Fás’s employment services is under the Department of Social Protection), while O’Keeffe’s castle now goes by the moniker Department of Enterprise, Trade and Innovation.
The new department names, apart from representing structural changes, exemplify the normality that is now attached to Government guff about “innovation” and “skills”, while concrete concepts such as “science” and, um, “employment” fall further out of fashion in political circles. But if only semantics were all we had to worry about, right?
My one encounter with Batt O’Keeffe – at the Kenmare economic conference last October – suggests he’ll feel right at home in his new job. Social welfare spending must be reduced and public sector pay re-examined, he told the audience of economists, business representatives and Lenihan fans. Greater work flexibility would definitely be required and cross-departmental waste eliminated, he added. Some people will call this stuff “common sense” and that it may be; I call it “Ibec press release”.
O’Keeffe was not present in the Kenmare auditorium to hear UCC economist Declan Jordan lambast the Government for its Science, Technology and Innovation strategy, arguing all too easily that it was awash with “fuzzy concepts” and had little economic basis. As nice as it all sounded, there was no strong correlation between higher spending on R&D and higher economic growth, Jordan claimed.
When it was his turn to talk, O’Keeffe declared that the Government would be sticking to its “smart economy” theme. This was “not just about white coats and PhDs”, he assured, inadvertently implying that white coats and PhDs were vain fancies. But as for what “innovation” will turn out to mean in terms of his department’s policies and – critically – its handling of its own budget constraints, who knows?
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The joy of sex quotas
Mere days after the Fine Gael parliamentary party rejected quotas on the number of women candidates it selects, Europe’s biggest telecoms firm, Deutsche Telekom, has announced a quota system of its own: at least 30 per cent of its upper and middle management positions will be held by women by 2015.
Meanwhile, the UK’s equalities minister Harriet Harman is making noises that British companies should be compelled to disclose what they are doing to improve gender equality at management level and the Conservative leader David Cameron is flirting with the idea of quotas for candidates who are female and from ethnic minorities.
Spain and France have also brought in laws aiming to boost the number of women on company boards, while Italy and Netherlands are mulling similar measures. All are following in the footsteps of Norway, which has a legal requirement that 40 per cent of a listed company’s directors must be women.
So why the scepticism about affirmative action here? There’s been little official mention of gender balance at senior levels since 1991, when the State set a gleefully ignored target for 40 per cent of directors on State boards to be free of a Y-chromosome. Leading the charge against a very modest proposal for 20-25 per cent of the party’s local and European candidates to be women, Fine Gael TD Lucinda Creighton last week remarked that quotas were “a very easy solution to a very complex problem”, before listing the reasons why politics might be unattractive to women, including long hours and childcare.
This seems like a very strange argument, not least because very easy solutions to very complex problems – unfashionable though they may be in Ireland – are surely a good thing.
The anti-quotas brigade usually cites a charming desire for people to be appointed to a particular job “on merit”. However, quotas are only ever suggested in the first place because the individuals claiming first dibs on a range of powerful positions are deemed to have profited from decades of convenient prejudices with regard to their sex, race and/or social class. Although nobody ever wants to admit this about themselves, there are few people who ever got where they are solely “on merit”. Witness last week’s edition of the BBC’s Question Time, on which Labour MP Caroline Flint argued in favour of quotas but was anxious to assert that she had not herself been the beneficiary of one.
The second argument against gender quotas is that there simply aren’t enough suitably qualified (and bothered) women around to fill them. In Ireland, where only one major listed company (Irish Life & Permanent) has a woman (Gillian Bowler) chairing the board and female chief executives are still a novelty, quotas at boardroom level would undoubtedly lead to the same female faces popping up everywhere. But how is that so different to the current situation, where the same male faces collect part-time non-executive directorships (and six-figure payments) like scouting badges?
In 2002, when Norway’s government first declared war on the old boys’ network, businesses objected that they couldn’t find enough suitably qualified women. But the Norwegian government had done its research and replied that there were armies of high qualified women available for boardroom posts if only company executives looked beyond their own social circle. Gender quotas for Irish companies may force boardrooms to embark on a frantic headhunt for female directors. But rather than resulting in the appointment of underqualified women, this could actually bring in badly needed fresh talent, denting the decades of entrenched corporate cronyism that has built up in Irish business.
Those in favour of quotas recognise the paradox. To convince sufficient numbers of women that politics or big business is a viable option for them, there needs to be a critical mass of role models: women who have dared to delegate childcare responsibilities to their partners and maybe even embraced long hours’ culture. But achieving even a hint of gender balance where none exists is extremely difficult to do without some measure of affirmative action.
It’s hard not to conclude that many of those against quotas are simply rather happy with things the way they are. But quotas are not, as Creighton says, “window dressing to make us sound progressive”. As the examples of Norway and Deutsche Telekom show, they are a means by which progress can be achieved.
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Clocking off
The smugly delivered policy announcements at the Conservative party conference in Britain this week were a typical barrage of odious: threats to cut sick benefits, promises to stop rolling out speed cameras, that kind of thing. But there was one proposal that is just inevitable, regardless of the political tide, economic winds or island you live on: the raising of retirement age.
My scheduled retirement date is 2044. I know because every year I get a slip of paper telling me that’s when the misery/joy/frustration/satisfaction will cease. But I won’t be planning the party just yet. Arguably, out of all the numbers that are on that A4 annual pension update, this is the one that is the most meaningless.
As one of the youngest members of the Irish Times group pension scheme, if I wind up spending a significant proportion of my working life contributing to this particular pension pot, I could be last in line to collect. This prevents me from thinking about the pension as anything other than a theoretical concept – nice idea, but really? Contributions seem increasingly like Dublin Bus “change” receipts: they all add up, but seem destined never to be cashed in. My relative youth also gives me a financial interest in the early death of my colleagues, which is unfortunate.
Life expectancy is increasing. Only last week a study in the Lancet reported that more than half of babies born in the developed world since 2000 can expect to live to 100 if current life expectancy trends continue. Better still, Danish ageing experts found that the trend for increasingly longer lives since 1840 “does not suggest a looming limit to human lifespan”. So assuming the improved mortality rates are accompanied by better health, at some point in the future the idea that everybody clocks off at 65 will seem bizarre as well as financially illogical (and not just because in Ireland we’ll have turned the National Pensions Reserve Fund into a child’s piggy bank by then).
But how will this upward shifting of the traditional retirement age, or indeed the abolition of the very idea of a retirement age, be managed? If you’re already planning how to blow what’s left of your pension lump sum, you’re quite likely to want to punch anyone who suggests that you clock in for another year or five. But it should be politically very easy for governments (and employers) to change the rules for younger workers. If you’re several decades away from your bus pass years, retirement age is just an abstract number: 65 or 67, who cares when you’re 25. It’s impossible to properly conceive just how irritated you’ll be getting out of bed that far into the future.
The Death’s Time Facebook application tells me I will die on November 10th, 2027, aged 48. Cause of death: decapitation by a utility truck while sticking my head out of a limo. It seems unlikely, but not much more so than the idea that the centenarians of the 22nd century, today’s crawlers and gurglers, will get to spend longer out of the workplace than in it.
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Are you hot enough to work at American Apparel?
Is it a pencil skirt or a boob tube? It’s American Apparel, so it’s probably both. The body-con, block-coloured clothing emporium opened its first outlet in Ireland earlier this month, bringing stretchy 70s-flavoured basics to the mid-market. But the big question (well, perhaps not the big question) is are its Dublin staff good looking?
This is not a cruelly random inquiry. American Apparel chief executive Dov Charney, a man who collects lawsuits the way other CEOs collect vintage cars, has been accused of engaging in “beauty profiling” - hiring and firing on the basis of someone’s looks rather than their ability.
A US staffer-cum-informant last month emailed the Gawker gossip blog the following insight: “One week, he (Charney) went on a huge tirade and made stores that weren’t doing well send in group photos. Why, you ask? He made store managers across the country take group photos of their employees so that he could personally judge people based on looks. He is tightening the AA ‘aesthetic,’ and anyone that he deems not good-looking enough to work there, is encouraged to be fired.”
The company has denied that it screens for looks and said it’s style that matters. According to a spokeswoman, its T-shirts, tunic dresses and leggings are really “art supplies” that need to be shown off in suitably cool way. But appearance-based discrimination has long been common throughout fashion retailing, as well as an unspoken truth across a number of workplaces, from the shop floor to the boardroom.
Customer-facing businesses want their customer-facing staff to have, well, nice faces. Researchers have found that beautiful people are paid more. Now this scary, eugenics-tinged practice is making its unapologetic way into retailers’ official HR handbooks with alarming alacrity (witness the outrageous “look policy” at Abercrombie & Fitch, which yesterday lost its wrongful dismissal case against a student with a prosthetic arm).
Popping into American Apparel’s new Dublin branch opposite Trinity College to see if its staff were really that gorgeous, I was distracted at the entrance to the shop by a stand displaying an article from green culture website Beanstockd, with the unnerving headline: “It’s ok to like American Apparel.” Uh huh. So there are reasons not to like American Apparel, an innocent and totally un-bothered customer might think before heading straight for the canary yellow waist belts.
In recent months, I’ve been massively entertained by the bizarre legal spat between Charney and film director Woody Allen, which went something like this: they used Allen’s image without consent, he called their ads “sleazy” and demanded compensation, they said you’re calling us sleazy, the judge said yes and your problem is?
However ethical their clothing procurement policies may be, it is never good to lose the moral high ground to Woody Allen. But I’m willing to bet that 95 per cent of the people who cross American Apparel’s threshold in search of a humble hoodie have never heard of Dov Charney, much less that he has had a number of sexual harassment cases taken against him. (Every single one of his relationships and sexual encounters with staff has been consensual, okay?)
Given what Beanstockd refers to as its “lo-fi pornographic ad campaign”, it’s not hard to conclude that sex and even accusations of sleaze are part of the sell. I think American Apparel’s ”art supplies” - the various shades of a colour detergent ad clothesline – are fabulous if you’re having a thin day or are under a certain age. There’s got to be a time and a place for gold hot pants, even if that time and place is largely confined to a Kylie Minogue music video, circa 1999. But if I buy a short skirt, I want it to just be a short skirt, free of connotations: not part of some roller-disco corporate ethos hatched by one of those tedious cult-CEO types, and especially not one with no concept of employer-employee boundaries.
American Apparel’s clothes are tight, tight, tight. If you’re usually a “small”, don’t even think about trying on anything less than a “medium”. If you’re usually a “medium”, well you might just about scrape into a “large”. And if you’re a woman over size 12, forget about it: one look at the bandeau-style underwear will tell you everything you need to know about its target customer: young and/or flat-chested.
So were the sales staff stunningly attractive? Of course. Forget about brushing up your CV, job-hunters: book a session with your local portrait photographer and get some smartly lit “portfolio” pics taken. We’re all models now.
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Bonuses are back (and so are shoulder pads)
You can’t get away from bankers these days. Settling down with a desk-bound ham roll for my weekly update on the status of Jennifer Aniston’s love life (a flick through Grazia magazine), my escape from the financial world was cruelly thwarted by a three-page spread on ex-banker Barbara Stcherbatcheff, author of the forthcoming book Confessions of a City Girl, under the provocative headline “bankers… we’re worth every penny”. Not that she actually says that.
Stcherbatcheff gives Grazia a taster of her “glory days” in London’s Square Mile (or “Viagra Triangle”), where life as a 365 pound an hour financial consultant allowed her and her mostly male colleagues to live like Russian oligarchs enjoying a permanent Christmas: “A 400 pound bottle of vintage champagne was for wimps – we only dealt in magnums, ideally brought to our tables six at a time with sparklers in the corks.” Even as Lehman Brothers closed, there was a party to dissect to news. Most people blamed the Wall Street traders, the bank chief execs or George Bush. The villain list was long enough to leave little time for self-examination: “It never once occurred to us to see ourselves our culpable.”
Now the buzzword in London is BAB (bonuses are back), and it’s almost party time again – but not for Stcherbatcheff, who has left investment banking to become a financial journalist. No bonuses there, and definitely no magnums. She’s clearly got a sense of humour though, if this surely satirical appeal for women to ”fight for positions in the big banks” is anything to go by:
“It won’t be easy,” she notes. “Many new recruits will probably have to work their way up from the back office to the front office, like I did. They’ll have to listen to sexist jokes and get dragged to dive bars, strip bars, and cigar clubs when the markets are closed. They’ll be mocked for being interested in handbags and shoes – by City boys who are clinically obsessed by Patek Philippe watches and Hermes ties.”
So, um, yes, go for it, ladies. Sounds wonderful. But first, turn to page 70 for next season’s 80s-inspired workwear.
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Swine flu symptoms and the art of pandemic planning
I have an ache in my back and I’m a bit sniffly. It’s just an average day, in other words, but with swine flu threatening to swirl around the nation any week now and the new NHS website in England swamped by feverish symptom-checkers and the “worried well” at a rate of 2,600 hits per second, it’s only sensible to consider the possibility that the H1N1 virus is busy incubating itself right now and really I should quarantine myself at home with a box of tissues and a box set.
Instead, I’m in the office, gambling with the health of my co-workers, which is what a lot of people who definitely have contracted swine flu will probably end up doing. The HSE this week warned businesses to prepare for a 15 per cent absenteeism rate as a result of swine flu and issued a 63-page pandemic planning document that my head hurts too much to read (again, nothing unusual there). But how many ill workers will make the misconceived effort to clock in – either due to ego-driven workaholicism, guilt at the resulting pressure on co-workers or fear for their jobs – when they really should be in bed?
I recently interviewed the new head of employers group Ibec, Danny McCoy, and he claimed that duvet days have more or less died along with the boom. Pale-faced martyrdom is this season’s sickie. However, my completely medically unqualified opinion is that if economic uncertainty really has led to an intensified culture of presenteeism, that could actually help spread the virus and ultimately make more people sick.
It’s also not the kind of phenomenon that small business group Isme captures when it interviews its own members and comes up with the astonishing, dubious and frankly disheartening statistic that employers reckon more than 80 per cent of sick days are feigned. The stress of knowing that their bosses think they’re malingering liars certainly isn’t going to speed up anyone’s recovery.
Meanwhile, having just conducted some impromptu journalistic research in the lift, it seems no one in the Irish Times has yet succumbed to the H1N1 virus – not that they’re admitting to, at least. But if a 15 per cent absenteeism rate were to hit the company, some 65 (okay, 64.5) out of the newspaper’s 430 staff would have to take time off work, whether it is because they are ill themselves or need to care for others who are ill. There’s not going to be a lot of news that day.
My colleague, the motors editor, assures me that you can’t apply national statistics like this to a workplace of our size, and that as we’re all “healthy, strapping” individuals, we’re probably more flu-fit than the national average. Nice. Socio-economic factors and, strangely, the fact that we’re also not the youngest of workplaces may also help: there is anecdotal evidence that people born before 1957 – aged 52 and over - have some immunity to the current incarnation of H1N1 because their immune systems have a memory of a similar 1950s strain of influenza.
Ah. Series Four of House will have to wait. I’m in the middle of writing this post when I’m asked to cover a shift for a sick colleague. In the language of the HSE’s swine flu continuity planning document, I am the “nominated deputy”. It’s the kind of role I imagine most workers will find themselves in at some point this autumn/winter 2009/2010. Although personally I like the sound of “pandemic tsar” a lot better.
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Could your job be done by a teenager?
If 15-year-old Matthew Robson was anything like me, he’d have spent most of his work placement at Morgan Stanley wondering where the toilets were. Instead, this morning’s Financial Times boasts the front page headline “Media research note by ‘teenage scribbler’ causes City sensation”. This is a very worrying development for all concerned.
The story goes that Morgan Stanley’s European media analysts asked Robson, an intern from a London school, to describe his friends’ media habits and his report proved to be “one of the clearest and most thought-provoking insights we have seen. So we published it,” said Edward Hill-Wood, Morgan Stanley’s chief media analyst. That’s Morgan Stanley’s current chief media analyst. For Mr Hill-Wood is right: Robson’s note is a joy to read.
First of all, there are amusingly pithy dismissals of such old-century concepts as the Yellow / Golden Pages: “Teenagers never use real directories. This is because real directories contain listings for builders and florists, which are services that teenagers do not require.”
Some of Robson’s sideswipes might be more surprising to anyone over the age of 21. The idea that teenagers can’t exhale without tweeting about it is laid to waste with devastating logic: “Teenagers do not use Twitter. Most have signed up to the service, but then just leave it as they realise they are not going to update it (mostly because texting Twitter uses up credit, and they would rather text friends with that credit). In addition, they realise that no one is viewing their profile so their ‘tweets’ are pointless.”
This is hardly a ringing front-line endorsement for the future of Twitter, on a day when co-founder / chief executive Evan Williams made it into the top 10 of the annual MediaGuardian 100 most powerful people in the industry.
In fact, unless they lower their prices, interested parties should pretty much give up marketing mobile web services at people young enough to be pocket money-dependent: “Teenagers do not use the internet features on their mobiles as it costs too much, and generally, if they waited an hour they could use their home internet and they are willing to wait as they don’t usually have anything urgent to do.”
Apart from taking over the world, that is.
The note ends with a “what is hot / what is not” list with which it is hard to argue. What is hot? “Anything with a touch screen”, mobile phones with large capacities for music, portable devices that can connect to the internet (iPhones), “really big tellies”. What is not? “Anything with wires”, phones with black and white screens, clunky “brick” phones and devices with less than a ten-hour battery life.
The only consolation to this rampant display of precocious adolescent competence is that Robson is bound to be teased on his return to school by Morgan Stanley’s decision to declare his age as “15 years and seven months”, as if he was a pedantic toddler. Mr Hill-Wood, meanwhile, has condemned the career of a City analyst to the criticism that “even a child could do it”.
This is not to throw stones at the analyst community, who have proven success in charging their clients fees for their insight (or lack of). Like it or not, the children are coming. Teenage workplace participation rates may be falling faster than among any other demographic group, according to the CSO’s Quarterly National Household Survey, but no amount of ladder-pulling college fees, employment legislation or economic depressions are going to leave the young to their Wiis forever. The Irish Times frequently plays host to small pockets of bright-eyed students, most of whom look like they’ll be all too capable of running the show – and have great hair while they do so – when the swine flu pandemic wipes out the rest of us.
The one small comfort is that no self-respecting teenager would want to work for a newspaper anyway. Unfortunately, this is because they don’t read them. In the words of Matthew Robson, the Morgan Stanley wunderkind: “No teenager that I know regularly reads a newspaper, as most do not have the time and cannot be bothered to read pages and pages of text while they could watch the news summarised on the Internet or on TV.”
Well, when you put it like that…
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Lost your job? Had your income halved? Turn to Annex F
One group of people who don’t have much of a voice in society had what could be their only source of income halved in yesterday’s budget. This group is people under 20 who are in receipt of the means-tested jobseekers’ allowance payment. According to Brian Lenihan, being forced to live on just €100 a week will “incentivise the young unemployed to participate in training programmes”.
Uh huh. So now let us take a look at what training programmes the Government has made available to these allegedly (by implication) un-incentivised teenagers who find themselves among the 370,000-plus on the Live Register. After months of repeated calls to respond to the surge in unemployment (including the permanent shift away from heavy dependence on construction-related jobs), the Government finally offered up a few suggestions as to how it might tackle that whole problem.
Annex F to the Supplementary Budget, subtitled Supporting Those Who Lose Their Jobs, begins by saying that the Department of Enterprise, Trade and Employment, the Department of Education and Science and the Department of Social and Family Affairs have “agreed a joint approach to activation” on the training and re-skilling front, which presumably translates as “we’re going to do something now”. (more…)
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