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ESG Crunch #4: Stay Frosty
"Be more human," says Blackstock MD on BBC News
Blackstock founder Andrew Teacher was interviewed by the BBC on the reputational impact faced by businesses due to increasing strike action.
Just as Oliver Dowden is the first domino to drop in the Cabinet, so this won’t be the first major private sector strike disrupting the summer.
“Be more human” was the clear message to BBC viewers.
Workers are citing British Airways’ new profits, the abuse they have faced in recent months, and the fact that IAG boss Luis Gallego will be paid £4.9 million this year if he meets his targets. IT problems and staff shortages have already hit its operations this year.
The airline’s tech has long been a source of frustration and ridicule – particularly when compared to modern (state-backed) rivals. It’s a great example of what happens when you don’t properly invest for the future in customer-centric systems.
While British Airways has offered workers a one-off ten percent wage increase for this year only and has had its back up against the wall during Covid, Andrew argued that the public mood towards low-paid workers shifted during Covid. This is a challenge because those same consumers don’t want to pay more for stuff and many folk haven’t been on holiday for three years.
Clearly, this is the beginning of the problem – not the end. And strikes aren’t a BA-only problem: easyJet and others are facing similar action across Europe and this is likely to spread across other areas as the unions’ confidence builds and the power vacuum in Westminster grows.
What does this have to do with politics? Everything. As of today, the unions’ power is inflated and, following the bi-election defeats, the likelihood of a change of government is high. So what should companies do?
- Be more human in how they communicate and think more carefully before trumpeting massive profits in the face of poorly paid junior staff.
- Think about year five. While any firm needs to plan for the short term, the longer term effect on brand has to be considered now – else companies risk their image being disrupted by a rival.
- Consider how a change of government will affect them.
It goes without saying that just as Blackstock is trusted by broadcasters to offer analysis of the big issues of the day, it can happily provide not just media training but senior, board level counsel on how to navigate what lies ahead. Feel free to get in touch in confidence – first name at blackstock.co.uk
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Background to the story:
Two unions (GMB and Unite) representing 700 ground and check-in staff at Heathrow airport held ballots yesterday on whether to strike.
The proposed action relates to fewer than 50% of British Airways staff based at Heathrow in customer-facing roles only, and there are other customer service workers who have not been balloted.
The GMB ballot closed with 95 percent of voters saying they will strike on a turnout of more than 80 percent before 94 percent of Unite workers voted in favour of striking later.
Dates for industrial action must be announced two weeks in advance but strikes will be timed to coincide with the school holidays near the end of July.
Unions are calling for a 10 percent pay cut administered in 2020 to be reversed, and for workers to be paid the money they would have received in the last three years had the cuts not happened.
The strike vote comes as Heathrow airport increased its forecasts for passenger numbers, and doubled its projected revenue and profits, for 2022.
Workers are citing the British Airways’ new profits, the abuse they have faced in recent months, and the fact that IAG Chief Executive Luis Gallego will be paid £4.9 million this year if he meets his targets. IT problems and staff shortages have already hit its operations this year.
British Airways has offered workers a one-off ten percent wage increase for this year only.
In the three months leading up to the end of June 2020, most of British Airways’ fleet was grounded and the company lost more than £700 million.
British Airways threatened to ‘fire and rehire’ staff unless an agreement was made which reduced staff’s pay and cut 13,000 jobs. The unions refused to negotiate due to the threat and British Airways proceeded with their fire and rehire plans.
By September, unions and British Airways reached an agreement, whereby existing contracts would be altered so that pay was reduced by 15 percent, and fewer than the original 13,000 jobs would be cut. By this time, about 6,000 workers had accepted voluntary redundancy and were gearing up to reapply for their jobs.
Unite workers went on strike in January 2021 because British Airways planned to fire and rehire its cargo team. Nine days of strike action over the Christmas period led to generous terms being offered including no job cuts and increased pay.
School holidays begin on the 22nd July. Unions have confirmed they intend to strike during school holidays to maximise the impact of the strikes.
BA says it has ‘contingency plans’ in place, including managers running check-in services, but the strikes will still lead to disruption.
It’s going to be a very busy summer holiday season. TUI reported summer holiday bookings in the UK were up 19 percent on 2019 levels, with over 3.5 million customers having booked a trip for summer with the operator as of 30 January. ForwardKeys reported that flight bookings from the UK were a mere 16 percent behind 2019 levels.
Passenger numbers at Heathrow airport reached 80 percent of pre-pandemic levels in May with 5.3 million people flying.
Airlines cut around 30,000 staff amidst the pandemic and are struggling to cope with the elevated passenger numbers. Over the recent Jubilee weekend, 305 flights departing the UK were cancelled out of a total of 10,662 scheduled flights and thousands of passengers had to wait hours to reclaim their baggage.
Grant Shapps has outlined plans for an amnesty which allows airline operators to run reduced schedules this summer despite being obliged by their contracts with airports to use 70 percent of their slots.
Employees of Ryanair in Belgium, France, Italy, Portugal and Spain are walking out on dates between 24th and 28th July over low pay and working conditions, though the company has said “negotiations are going well, and we do not expect widespread disruption this summer”.
Blackstock's work navigated seamlessly between offering corporate and creative advice, unlocking opportunities and relationships at the highest level. And the results they generated were outstanding – ranging from major pieces on Radio 4, in the FT and Mail through to a front-page campaign with The Sun.
Blackstock demonstrated a genuine technical understanding of our business and investor requirements, with a clear ability to translate this for a wider audience of investors and stakeholders. This helped us articulate our strategy effectively with very well received media collateral combining insight, research and market commentary. I would not hesitate to recommend them.
Blackstock has proven to be adept at both research and media, connecting Colliers with high class publications and broadcast opportunities such as the FT and BBC Radio 4 and working across all areas of our business. I can't rate them highly enough and wouldn't hesitate to recommend them.
Blackstock deliver first class copy and events and have helped us squeeze more media coverage from our news stories. They’ve contributed a wealth of ideas to support NOMA’s profile and are genuinely passionate about the brand. Blackstock’s team works closely with our many consultants and has constantly been on hand to support us with energy, enthusiasm and a high level of integrity.