FAIRNESS IN BUSINESS: WHAT YOUNG PEOPLE THINK JULY 2018

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1 FAIRNESS IN BUSINESS: WHAT YOUNG PEOPLE THINK JULY

2 CONTENTS Foreword 3 Summary of survey findings 4 Executive Summary 5 Fairness, business and society 5 Giving young people a voice 6 The concept of fairness 6 The ideals of fairness 8 What influences perceptions of fairness? 9 Conclusion 9 2

3 Foreword From the Chair of the CBI s Under 35 Committee The CBI s Under 35 Committee was formed in late 2016 with the specific objective of amplifying the voice of young people in business. The CBI s proposals and policy recommendations are developed after thorough consultation with its members, but while individual business sectors and geographical regions have always been well-represented, it was felt that the generational element was sometimes missing. And that voice is critical as these are young people who will lead business in the future and who will live for longest with the decisions that are made today. I was honoured to be elected as Chair of the Committee and I have found its work to be inspiring and heartening. The Committee quickly identified three main areas that its members felt particularly passionately about, and these will be the focus for its energy: the role of business in the world; people, automation and skills; and infrastructure and innovation; this report reflects the first of these objectives the wish to create a fair social contract between business and society. My experience of the Under 35 Committee has shown me that the future of our business community is in good hands. We hoped that the Committee would make its mark and that has already been the case. We hope you find this report enlightening and thought-provoking the perspective of young people in business is more important than ever, and I am delighted that the Under 35 Committee is leading the way. Phillippa O Connor Chair of the CBI Under 35 Committee Partner, PwC 3

4 Summary of survey findings 4

5 Fairness in business: What young people think A survey developed by the CBI s Under 35 Committee shows that young people have very strong views on the role of business in society. Executive Summary 44% say promoting fairness is the responsibility of business, not government or regulators 50% say creating jobs is the primary purpose of business Young people are far more likely to trust their local village shop to be fair than government or multinationals Only 7% see paying taxes as the most important contribution that business makes to society Companies must take it upon themselves to moderate their actions as a collective. Society is not able to be constantly monitoring the inner workings of business meaning self-regulation is vital! Fairness, business and society As the political and economic climate across Europe grows more volatile and uncertain, the role of business becomes more important. Businesses across the UK are carrying on day by day, meeting their customers needs and providing work for their employees. But the very definition of work is shifting and working models are changing and this has led to a perception among some that the contract between business and workers is no longer fair. If that s the case, how can business maintain its mandate to operate? For the best part of 20 years (since businesses received limited liability) the CBI has looked for ways to bring the interests of business and society closer together, arguably with little success. The emphasis today is on fairness; in 2017 the Taylor Review of modern working practices argued that work should be fair and decent. This has strong economic as well as ethical roots; happy people are productive people. 5

6 But what do people mean by fair? Do we all have the same understanding? The Confederation of British Industry (CBI) has begun a comprehensive discussion into fairness in business, drawing on the views of its members across the country. For our younger members in particular, finding ways to create a fair social contract between business and society is an absolute priority. The CBI s Public Attitudes Survey, published in January 2018, showed that while business reputation has improved over the previous six months, the biggest improvement was seen among 18 to 34-year olds with a 15% rise in positive views. Young people are clearly engaged in the debate about the UK s future so it is essential that we understand the dominant factors that shape their opinion. Giving young people a voice We want to be sure that when the CBI makes policy recommendations and decisions, our views reflects the broadest possible base, in particular the young people at the early stages of their career in business. They will, after all, live with the consequences for longer. Yet many feel that their voice and opinions aren t heard that the right to express your view comes only with years of experience. That was why the CBI set up the Under 35 Committee, to make sure that the views of the next generation of business leaders are heard and understood. The importance of fairness in the context of business was identified by the Under 35 Committee as a critical issue for focus. The survey and subsequent report was devised specifically to gather and reflect the views of younger people in business on their attitudes to trust and fairness. Six focus groups across the UK, involving more than 50 participants, informed the design of this survey, which was then circulated to CBI members and distributed through social media channels. Over 880 participants completed the survey. It s about helping out staff and customers beyond what is considered the basic business relationship. 6

7 The concept of fairness Survey participants were asked to what extent they would trust a selection of organisations and businesses to operate in a way that they would consider fair. By a significant margin, the local village shop was the most trusted across all demographic groups taking part. Exhibit 1: To what extent do you trust the below to operate in a way that is fair? (Mean score) Note: Participants were asked: To what extent do you trust the below to operate in a way that is fair? 1= I do not have trust in them, 5= I have full trust in them One conclusion to draw from these results is that young peoples perception of trust is drawn very much from their own life experiences (although it is perhaps surprising that government scores relatively highly on trust in the current political climate). This ties in with previous CBI research1, which suggested that people tend to form their views of businesses as consumers and employees, rather than as members of a particular community. If they have a bad experience as a consumer, that colours their perception of the industry as a whole. The survey also suggests that the youngest working age group those aged between 16 and 24 are more trusting of multinational organisations than other age groups. This confirms earlier research from PwC2 which highlighted the defining traits of Millennials (those entering the workplace after 2000, who will form 50% of the global working population by 2020). These clear traits include Millennials search for purpose in their work and their desire to be proud of their employer. The research showed that this group of 1 CBI Public Attitudes Survey, January Millennials at Work: Reshaping the Workplace The research was based on the views of more than 4,300 graduate Millennials across 75 countries 7

8 workers are attracted to employer brands that they admire as consumers and these tend to be brands that emphasise their social and environmental record. Fairness is about genuinely giving back, not just doing it for PR. The ideals of fairness What should be the role of business in society? According to survey participants, the answer is unambiguously to create jobs, and to provide the goods and services it specialises in to their customers. 84% of participants ranked these as the biggest contribution of business. As long as organisations fulfil these tasks, they are seen as playing their role in society. Young people also see delivering innovation and paying taxes as important contributions (innovation being marginally more important than paying taxes), although these are seen firmly as secondary contributions to the core functions of creating jobs and providing goods and services. Just 7% ranked paying taxes as the biggest contribution that businesses make to society. So what does the most damage to the public s confidence in business? The survey shows that while tax transparency and ethical practices are not seen as the most important roles for business, however they certainly have the biggest impact on reputation when things go wrong. If businesses find themselves in the headlines for either reason, the issue should be tackled quickly before it becomes unmanageable. Exhibit 2: Which has the greatest impact on public confidence? 5=smallest impact; 1=biggest impact Number of responses Note: Participants were asked: Which of the below has the greatest impact on the reported reduction in public confidence in business? Rank the following reasons from 1 to 5. 8

9 We also asked participants about their views on trust and the management of personal data. The results show that the age group are more likely to trust business with their personal data than those in the age group a reflection of how comfortable those that have grown up in the digital age feel about sharing their data. Do it for the right reasons and people will know. What influences perceptions of fairness? News media may be seen by many as a dying industry, but our survey shows clearly that young people still see news radio, websites and newspapers as their most important sources of information when forming their opinions. 64% say that they most often get their information from television news and newspapers (either printed or online), and then consolidate their view through discussion with family, friends, colleagues and social media. Tellingly, the youngest age group (those aged between 16 and 24) were more likely to rely on social media for information, naming it as their third highest influence. Participants in the 25 to 34 age group, by contrast, named social media their fifth most important influence. We also asked participants whether they would like to see any changes, such as the introduction of regulation, that could improve the public s confidence in business. While 24% said they would like to see more regulation, the majority (28%) felt that it was up to business to make the necessary changes in response to societal pressure. Overall, 44% said that business holds the responsibility for promoting fairness 26% said it s the role of government, and 17% felt it was the responsibility of regulators. 44% of survey respondents believe business holds the responsibility for promoting fair practices Participants gave a number of examples of how this has already worked in practice, from Domino s Pizza partnering with local administrations in the US to fix potholes, to Santander s community projects. I would say that best way business can show its contribution to society is by giving back to the community, particularly at a local level, said one. It s about helping out staff and customers beyond what is considered the basic business relationship. 9

10 Conclusion This survey sends the message that younger workers have clear expectations for business and have set the bar high when it comes to establishing a relationship of trust. The younger generation is driven very much by their own personal experience of business, as consumers as well as employees. Unethical business practices won t be tolerated and if trust is damaged, it s difficult to repair. This means upping levels of engagement to improve understanding and communicating in a way that is genuine, compelling and which resonates with young people. All businesses have active, engaged and enthusiastic young people working for them. Actively exploring and exploiting opportunities to harness this potential. Whether that s through staff consultations, employee forums, or greater involvement in business decision making. The results of this survey, as well as the Under 35 Committee s wider discussions about the role of business in society, will help to inform the CBI s discussions and policy recommendations. We would like to thank everyone who took part. 10

11 For further information or a copy in large text format, contact: Callum Biggins Head of Campaigns, CBI T: E: callum.biggins@cbi.org.uk Copyright CBI 2018 The content may not be copied, distributed, reported or dealt with in whole or in part without prior consent of the CBI. 11 cbi.org.uk