Social Market Foundation recommend that profits be translated to pay increases and training for workers
16 October 2019
The Social Market Foundation, a think-tank primarily concerned with economic prosperity, have advised that they believe new legislation should be enforced which commands that growing profits should be invested back in to pay increases for employees. There is also the suggestion that profits should also be put into funding for training for staff.
The report stated that staff retention was important in the world of business and that training would be beneficial for the employer as it instils invaluable skills in employees, which can be used for business needs. Three of the primary recommendations surrounded new duties for directors, encouraging investors and new reporting requirements, to ensure compliance.
The duties for directors recommendation asserted that there should be a new stipulation in the Companies Act that companies have to actively be seen to be allowing their workers to share in the profit a company makes and that there should be some tangible way of demonstrating that this has happened. It was recommended that investors should investigate the pay and training plans in place for employees when deciding which businesses they wish to invest in. There should also be more clear and concise reporting into information surrounding training, wages, HR practices and progression, which should be available in the public sphere, to encourage companies to invest more time and money into their staff.
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