Why do companies still fall short even though they all talk about how more needs to be done in relation to supporting people?

Last Wednesday, the Government published a list of 200 companies who have failed to pay their employee’s minimum wage. Included are some big players across multiple sectors such as WH Smith and Lloyds Pharmacy who are listed as the two biggest offenders, but it does not go unnoticed that some hospitality businesses have found themselves on this list too. Does this not set a bad example of the industry? Hospitality has been long struggling to recruit employees, but is this because there is a bad reputation for pay?

As an employer, paying the legal minimum wage is non-negotiable and should they not know better than to short-change hard working staff? What message does this send to employees about the company culture? Now more than ever we are having conversations on motivating staff and how to get the best out of your employees, but is this a show for some who then behind closed doors behave differently?

In a time of such a cost of living crisis, people do need and have needed support.

The businesses named on this list have since paid back what they owe to the underpaid staff and have also received financial penalties, but will this be enough to deter them from behaving like this in the future? Should other businesses within each industry that is represented on this list stand up and say it is unacceptable and we should be treating employees better?
It is easy sometimes to take a shot at those who make errors or mistakes and few companies are perfect. Things do go wrong but in the modern era, everything is today open and transparent and there is little margin for error. However, the larger players such as WH Smith and Lloyds Pharmacy should have better controls and practices in place. All have struggled with the battle for talent and most on the lists will have no doubt complained at some point about how hard it has been to recruit talent so the list should be a marker in the sand that there is more work to be done and that companies do need to still raise the bar further.

It is important going forward that minimum wage standards are set and met by employers as in the post-Covid time and with the expectations of Generation Z, people are beginning to expect more from their work and employer in general. With inflation and the cost-of-living crisis, underpaying employees could have even more of a detrimental effect on people and families’ livelihoods – is this fair when an employer can afford to pay but just chooses not to? At the end of the day, if you have worked the hours the least you should expect is to be paid for the hard work you have given.

On the other end of the scale, there are many companies who are working hard to raise the bar, invest back into people and again working to create career pathways which allow people to have genuine hope. This then leads onto a number of interesting points and questions which have raised in discussions recently.

One is that social mobility has been in decline and is at one of its worst places in the last forty years. This does then point back to the list as the baby boomers have never had it so good so one of the consistent discussions, over a number of years, has been that the baby boomers enjoyed support and took all that was given to them but arguably have shown less commitment to ensuring that the same investment and support was given to following generations. Experts today argue that the children of the baby boomers face a far harder road to progression. How can this picture be changed?

Again, it is important to note that some are being progressive and working hard to now create the levels of change required.
The second was that the focus on senior leaders possessing MBAs in the last decade created its own barrier to progress. It has been noted that many industries created a new form of elitism which maybe overlooked other genuine leadership talents.

There is an irony in play; so many companies have invested heavily in educating their leadership teams but stand frustrated at the lack of innovation, entrepreneurship and people focus on display. Companies almost accidently created their own barriers to progress.

The question has to then be how do companies enable better? The answer must lie in the basics; creating better levels of trust and support for their people and in their cultures.
Those on the list will face their own questions from public procurement and clients. It is not for us to judge errors but the question for all to consider is whether we really are committed to supporting the development of people and what can more can be done?

EP has long been an advocate for the support of young talent. It has long argued that talent can come from all areas; it just needs opportunity and support. Hospitality has long been such an example and it has a great history of where this can be showcased but it does not mean that there is still not work to be done.

Written by Izzy Mchattie, EP Business in Hospitality