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Eighty-one percent of employers say economic headwinds have reduced the prospects of activism over the last 18 months, as employees become more anxious about their jobs and less willing to rock the boat.
Even so, activism is diminished not departed, a reality underlined over the last 12 months by a series of high-profile strikes in some sectors, particularly in the UK. Employers certainly believe any reprieve is temporary: 59% expect employee activism to increase in the future. That represents a significant drop from the 72% who expected growing activism in 2021. However, the share of employers forecasting less activism in future has nearly halved, now at just 10% (down from 18% in 2021). In the politically polarised US, only 3% of employers expect a decline in activism.
Even so, prominent reports of employers still being bruised by discrimination claims and activism on environmental and social topics warn against complacency. “Sexual harassment and workplace bullying are back on the agenda,” notes Fatim Jumabhoy, Managing Partner at Herbert Smith Freehills' (HSF) Singapore office. “A lot of those complaints involve employees using social media and publicly discussing those grievances.”
While focus on the environmental and social impacts of business has recently been driven largely by employee and stakeholder activism, a raft of new sustainability reporting standards will intensify this scrutiny. The US, EU and UK are all developing sustainability standards, and the European Sustainability Reporting Standards, in particular, will force employers to grapple with the impact of their operations not just on the environment, but also on their workforce and that of their value-chain. In-scope employers will be required to report on issues with a material impact on their workforce irrespective of whether those matters have a material financial impact on the business – a step-change in approach.
Couple that with new laws promoting pay transparency, including the EU's Pay Transparency Directive and amendments to Australia’s Fair Work Act, and employers will be required to open their books in a way that will equip staff and other stakeholders to bring about a new wave of employee-driven business change. “Some of the legislative changes in Australia prevent pay secrecy clauses for employees, so if you pay people differently within your professional services staff, there are going to be conversations about comparing pay,” notes HSF Partner Natalie Gaspar.
As employers anticipate a more activist workforce, they are also becoming more doubtful of activism as a force for good. For the first time in our survey, the largest share of respondents (46%) view activism as a risk to be managed rather than a positive force (20%). It is a dramatic shift in attitude since our first survey in 2019, when half of employers (49%) had a positive view of activism.
Employers in Asia and EMEA are the most pessimistic, with just 13% and 15% respectively taking a supportive view. This is accompanied by a rise in the share of all respondents saying that activism poses a significant reputational risk (38% this year versus 33% in 2021). “Over the last 12-to-18 months, there’s been a rise in spurious claims, and employers have been forced to spend significant time and resources investigating those claims,” notes Jumabhoy. “I can see why many businesses view activism more critically now.”
In some jurisdictions, new labour-friendly legislation contributes to employers’ anxieties. “Australia is on the cusp of some profound legislative changes that swing things very much in favour of workers and unions,” notes Gaspar. “Workers are feeling emboldened and businesses are feeling vulnerable.”
These views likely explain the significant increase in employers placing moderate to high restrictions on employee activism, which now sits at 97%. While this represents a modest change from 2021, it is a striking increase from 2019 when 53% reported no restrictions (see figure 2 below).
Of course, there are limits to how far employers can go in preventing employees from speaking their mind about workplace issues. Perhaps the most significant limit is the risk of damaging employee relations, as attempts to constrain staff may invite more protest than they prevent, including via means that employers cannot monitor and that may be more damaging from a reputational perspective.
There are also legal limits, which vary by jurisdiction. In most of EMEA, employers can enforce few restrictions beyond prohibiting speech or conduct that damages the employer’s reputation. Employees in more restrictive jurisdictions may face limits on protest or collective action, though these are often imposed by governments.
Faced with the inevitability of activism, a growing number of employers are determined to keep complaints in-house. The last two years have seen a sharp increase in the share of respondents who say they do not participate in external employee forums but address concerns through established internal formal representative committees (35%, up from 19% in 2021). This is accompanied by growth in the share of employers who have created official forums for employee activism consultation, which now sits at 81%.
As HSF Partner Shivchand Jhinku observes, funnelling complaints to internal channels can promote meaningful engagement and protect employees: “Employers know they can’t quell dissent, so they want to engage with it. But there’s also an obligation to protect people from some of the commentary that might come out – things like racist or homophobic behaviour. Employers want to place guardrails on those conversations. It's about meeting their obligations as employers rather than trying to stifle debate.”
And it is not just employers who have an interest in directing grievances to corporate channels: trade unions and works councils also want complaints to be made through representative committees. This helps to ensure such bodies remain the voice of the workforce and are not overshadowed by disgruntled staff or groups with a talent for garnering attention on social media individually.
Senior Associate, New York
Managing Partner, Singapore, Singapore
Senior Associate (Employed Barrister), London
Regional Head of Practice (EMEA) - Employment Pensions and Incentives, Paris
Partner, New York
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