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05 Oct 2021

Williams-Shapps: delivering the future railway - What are the implications for rail's people?

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This article is the last in a series of five articles by the Stephenson Harwood Rail team looking at the Williams-Shapps Plan for the Rail industry and what implementation of that plan could look like.

In this final thought piece, the rail team's employment experts consider what the implications of the Williams-Shapps Plan for Rail (the Williams-Shapps Plan) and the new "Great British Railways" (GBR) might be for rail's people.

Chapter 8 of the Williams-Shapps Plan entitled 'Empowering rail's people' sets out ambitious proposals to forge a new way of working across the railway industry.  In a closer look at whether its objectives are realistic and attainable we consider:

  • Is it possible to overhaul the culture of the sector?
  • Is a more diverse workforce within the industry achievable, particular in light of its current poor record on female representation?
  • Can the workforce adapt to a new way of working?
  • Can the rail sector in Great Britain become a world-class magnet for talent?
  • What role will the unions play?
  • Could the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) be an obstacle to change?
  • What impact might cost pressures have on the workforce?

Innovation

Is it possible to overhaul the culture of the sector?

The Williams-Shapps Plan talks of developing an inclusive and diverse culture where “employees feel job satisfaction and people are appropriately rewarded for helping to improve productivity and customer service”.  These are admirable objectives but many already working in the rail industry would argue that this is part of their attraction to the industry and others would challenge why these fundamentals to employment and service are not already part of the existing objectives for rail.  Nevertheless, if GBR plans to instil a new, holistic workplace culture it must be aware of how extremely challenging this will be. 

Culture is made up of behaviour, values and attitudes and staff buy-in is paramount to success. Starting from the top with the leadership team and management, GBR must identify and present advocates for change and build momentum for its industry wide implementation.  Changing the mentality and ways of working of an industry with legacy employees from multiple organisations will not be a quick process and could take years.  If the Williams-Shapps Plan is to come to fruition it will require long-term commitment by GBR and proactive performance management for those who are resistant to the new ethos.  It will be essential to consider how best to motivate staff and hold them accountable for delivery of the new culture, an open dialogue of evaluation and honest feedback being key.  A drive to identify and attract a new wave of talent for leadership and to demonstrate its new culture should also assist.

Is a more diverse workforce within the industry achievable, particular in light of its current poor record on female representation?

Women make up just 16 per cent of the workforce across the rail industry with the vast majority (79 per cent) of women being in non-managerial roles, according to the 2015 Industry Survey from Women in Rail.  

External pressures have highlighted the need not only to increase the number of female employees, but also to address the pay differential between them and their male peers.  The gender pay gap is the difference between the average (mean or median) earnings of men and women across a workforce.  Since 2017, an employer who has a headcount of 250 or more must report this data.  New research reveals that employers affected by the legislation have narrowed the wage gap between women and men by almost one fifth (19%) on average - so the oxygen of public reporting is effective.  GBR will be legally required to report its gender pay gap information.

Whilst steps are being taken to improve the diversity and gender balance of the workforce, with great work being done by groups such as Women in Rail, there is still much more to be done to create an industry that genuinely reflects the market it serves and careful consideration will need to be given to how to attract and retain diverse talent.

Can the workforce adapt to a new way of working?

The current geographically fragmented structure of the workforce causes the culture within a single employer to vastly vary depending on which area of the railways employees work.  This results in a lack of unified oversight and leadership.  From on-board to depots to stations to Head Office, staff are often siloed in their work type and the Williams-Shapps Plan rightly identifies that this limits the opportunity for whole-system, efficient solutions to emerge and for employees to learn from one another, develop their experiences and broaden their horizons.

The Williams-Shapps Plan promises investment in skills, training and leadership across the rail sector to foster greater collaboration and openness to innovation and new technology and to support key long-term productivity improvements.  This approach suggests development within individual work areas, and would certainly improve the service offered to passengers, but unless a forum is identified to share best practices, it remains to be seen whether a more collegiate workforce can evolve.

It will be critical to balance the upskilling and proposed amended ways of working of long-serving employees with the efforts and expectations of new talent to the industry.  Avoiding cynicism from the existing workforce will be critical but so will efforts to meet expectations of the new talent attracted to the industry - many of whom may find common habits outdated, especially when compared with other industries, and may be keen for innovative and fast paced working practices.  This success depends on talent management of the existing workforce and the enthusiasm of the new.

Can the rail sector in Great Britain become a world-class magnet for talent?

If the railways can harness the improvements which come from investment in skills, it will make rail more attractive to new and experienced talent from outside the sector.  Recruitment campaigns in schools and universities selling students the benefits of a modern and stimulating career in the industry, including via apprenticeship opportunities, will attract diversity of thought and employees from under-represented groups who are just starting their careers.  GBR should consider other pools of workforce resource such as those in existing service based industries, or those in industries that have undergone major change such as the technology sector, to harness the valuable know-how those individuals could bring to GBR.

In addition, greater use of technology to collate useful data on passenger use of the railways may allow more educated staffing strategies to ensure efficient hiring practices.  Many of those starting their careers expect to see these technological proficiencies in an employer and will be attracted by the progressive nature of these practices.

Related to this, the increased use of technology in recruitment can create efficiencies by reducing the time spent on repetitive, time-consuming tasks through automating the screening of CVs, prompting assessments and arranging interviews with potential candidates.  There is an increased use of artificial intelligence (AI) systems in this area.  This is a potential option for GBR particularly given the number of “similar” roles it is likely to need to occupy across the network as it transitions these roles under one entity.  However, the training data that is fed into AI systems has been influenced by the results of human decision making and is therefore rife with human prejudices.  AI is not currently at a stage where it can predict social outcomes or weed out discrimination in data sets or decisions.  Therefore, to pick the “best candidate” using an algorithm is to reinforce the existing problem.  Human bias and discrimination are a problem in recruitment to which GBR must be alive, if a truly diverse and enviable workforce is to result.

Barriers to change

What role will the unions play?

Since 2016, over 250 days of rail strike action have occurred.  Industrial relations disputes on the railways have prohibited the sector from evolving its workforce.  Efforts to modernise have been met with resistance causing the working practices to remain unchanged and at times, outdated, to the detriment of passengers.

The unions have always been advocates of moving back towards the days of nationalisation and British Rail.  This is a step in that direction and it therefore follows that they should view the implementation of a Plan as a positive move for the industry.  However, the General Secretary of the RMT has expressed disappointment in the Williams-Shapps Plan commenting, “Our chief priority is to defend our members and if the industry chooses the road to confrontation they will meet the stiffest industrial resistance from this trade union”

The Institute of Employment Rights, a think tank for the trade union movement, says that privatisation “leads to increased exploitation of workers”, and has facilitated the rise of zero-hours contracts, a “deliberately weakened labour force”, and a significant reduction in assurances of “minimum wage, redundancy pay and access to justice for all”.  This is an extreme view but the unions will be rightly concerned about potential streamlining and cost cutting which suggests tempestuous conversations ahead. 

GBR will need to find a way to work with the unions if it is to drive through real and meaningful change and it remains to be seen what role the unions will take in the days of GBR.

Could TUPE be an obstacle to change?

With the best will in the world, the Williams-Shapps Plan can only foster as much change to employee roles as TUPE will allow.  The purpose of TUPE is to protect employees if their employer changes (often with retendering or refranchising).  It preserves continuity of service and existing terms of conditions of employment, it is extremely difficult to amend these without such changes being void.

With the creation of GBR taking on the functions of Network Rail, as well as some of the responsibilities from the Department of Transport and industry groups, TUPE will apply to transfer the employment of those performing relevant roles from their existing organisation to GBR. 

A new employer can only make changes as a result of the transfer if it improves terms and conditions of employment, or there is an 'economic, technical or organisational' (ETO) reason involving a change in the workforce, for example restructure or redundancies.  ETO reasons include essential cost-saving requirements (economic reasons), using new processes or equipment (technical reasons) or making changes to the structure of an organisation (organisational reasons).  Unless GBR changes fall into one of these categories, this is likely to make immediate change to employee terms and conditions challenging, if not impossible in law, and may be a barrier to real transformation for a period of time after implementation of the Williams-Shapps Plan.

What is more, terms which are incorporated from collective agreements with the unions would automatically transfer in the event of a TUPE transfer so the work of many years of union negotiations to date will not be lost.

Employees will be protected from drastic change and it remains to be seen how much of an obstacle TUPE will be at the beginning of the implementation of the Williams-Shapps Plan.  However, in years to come, with GBR as the primary employer, with new hires on GBR terms and conditions and employers not constantly changing, this may well result in a more settled and unified workforce.

What impact might cost pressures have on the workforce?

The taxpayer has borne the burden of the costs of the industry during the global pandemic.  In June 2021 the Department for Transport confirmed outside of London it had allocated £8.5 billion to rail services in the financial year 2020/21.  Whilst passengers are returning to the railway, usual travel patterns are not.  The government therefore continues to take revenue risk.  The intention to modernise will aim to provide sustainable investment and revenue for the industry but will also likely see a drive to reduce operating costs where possible, and this will turn a lens on staffing with inevitable redundancies.  GBR will be required to seek efficiency savings and the Regulator, Office of Rail and Road (ORR), will be given responsibility for monitoring its progress.  In collaboration with ORR, the government will introduce reporting requirements on staff productivity and pay, as well as requiring comparisons with other sectors to benchmark proficiency. 

How will the industry become more cost effective?  Commentary on the Williams-Shapps Plan raises concerns that GBR will be mandated to deliver permanent austerity on the railways.  However, in October 2020, Transport Focus published research showing that the key to rebuilding passenger confidence when returning to the railways was enhanced staffing, “There is a strong sense that the ideal response to the pandemic would be to see more staff on trains and at the station, rather than less”.  The two are incompatible and there are challenges ahead.  Can a leaner employment structure be achieved and still successfully deliver the services?  GBR must engineer a careful workforce strategy to balance cost reduction against passenger needs and expectations.

Conclusion

People are paramount to the success of any industry.  GBR is tasked with creating an integrated workforce strategy that allows staff to develop skills and build careers on the railway.  GBR must attract, train and retain a flexible, diverse and sustainable workforce.  People must be rewarded for their work, feel valued and feel their workplace is inclusive of their needs.  The ambitious nature of the Williams-Shapps Plan must not be underestimated, GBR has its work cut out.  However, its authority to make decisions without unnecessary layers of approval should somewhat free it up to implement real change, unlike in the current model. 

The formation of GBR and the future structure of the industry will be an essential driver of the success of the reforms set out in the Williams-Shapps Plan.  The current post pandemic world certainly presents an opportunity for the industry to revolutionise its approach to better serve employees and passengers.  However, it will not be without its challenges.  Staff buy-in will be paramount to success and patience and endurance from all stakeholders will be essential to realising the benefits that the Williams-Shapps Plan envisages.

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