Professor Chris Warhurst, Director of Warwick Institute for Employment Research comments on the news that Sports Direct has bowed to shareholder pressure by agreeing to an independent review of its working practices and corporate governance,
"The problem for Mike Ashley is that Sports Direct has become emblematic of ‘bad jobs Britain’. Our economic recovery has been jobs rich but hasn’t created enough rich jobs, read decent jobs. At the chart below shows, most job created over the last five year at the bottom end of the wage quintile (the lowest paying jobs) have been part-time, self-employment or temporary. The opposite is true for the upper quintile (the highest paying jobs. Most jobs created here have been full-time permanent jobs. The result is that good jobs are getting better and bad jobs are getting worse.
Sports Direct is attracting the flak for a reason. It offers zero-hours contracts, illegally low wages and poor shop floor management – in short, it has become the Victorian workhouse that its critics accuse it of being. Given that these practices are endemic in the company and have created a PR disaster, it is of little surprise that shareholders worry about losing their money. Ashely was misguided – if not naive – to believe that an in-house investigation by its own legal team would be acceptable: the senior management of the company is the problem not the source of the solution. Asking RPC, the comoany’s lawyers, to undertake a review, was just digging the hole deeper. Ashley has admitted that he has difficulty running the company now that it has become so big. If Sport Direct is to survive, an independent review of the company’s management – from the shop floor to the boardroom is needed.
The bigger picture however is the business environment that has allowed these practices to flourish. If bad jobs Britain is to end, politicians need to start listening to the problems of the working class, as Prime Minister Teresa May has said that she would. Job insecurity and low wages have to end. Britain needs a jobs enrichment revolution that creates solid wage floors, ends job and income insecurity, offers job progression opportunities and enables workers to have a voice. Management too have to be better informed. The next generation of senior managers will need to be better educated in our universities; the current generation, as Mike Ashley is beginning to realise, need to start listening to independent ideas and advice: the new review has to be just the start of change."
Professor Chris Warhurst is Director of the Institute for Employment Research at the University of Warwick.
Media Relations Manager
Tel: 02476 150423
Mob: 07876 218166