Gill Taylor: Sports Direct shows the value of sympathetic HR

The chief executive should always know the employment policies and practices of the organisation, writes our columnist

Gill Taylor
Gill Taylor

Sports Direct has been in the news lately for failing to pay the minimum wage and other poor and oppressive working practices. The workforce totalled 27,300, 22,300 of whom were employed on zero-hours contracts. Four thousand of these were engaged by agencies to work in the warehouse.

After an investigation by The Guardian and an inquiry by the Business, Innovation and Skills Select Committee, Sports Direct's board recognised the severity of the issues. The company apologised for conditions at its warehouse, including a "six strikes" policy that put workers in fear of losing their jobs. The company's founder, Mike Ashley, said he wanted to give workers a voice at the highest level and "to help ensure that all staff are treated with dignity and respect".

The company's own report, prepared by the law firm Reynolds Porter Chamberlain, says the Sports Direct chief executive, Dave Forsey, did not tell the board or Ashley about the potential for Sports Direct to pay below the minimum wage. Forsey, who is criticised for the way he managed the entire HR department, gave up a bonus worth almost £4m.

How the other half live and work, eh? So what can we remind ourselves about good strategic HR practices in the third sector?

The chief executive should always know the employment policies and practices of the organisation. Even in a big organisation with an HR department, the chief executive needs to understand different types of contract, how they work, the legal implications, how they are used throughout the organisation and the impact on employees' working lives.

Whoever is in charge of HR should report on the "establishment" to the chief executive at least once every six months, preferably every quarter where you have a changing workforce. This means information on: numbers of staff; the contracts each is on - permanent, fixed-term, casual, zero-hours, and how many are full-time and how many part-time; the turnover of leavers in percentage terms; starters and difficulties recruiting; and other issues such as absence rates, staff not taking holidays, time off in lieu, long-term sickness and maternity/paternity leave.

The other really important point about this is not the figures in isolation each quarter, but a rolling comparison with the last quarter and last year's totals so you can identify trends in the business and act swiftly if they need dealing with. The head of HR and the chief executive need to have a grip on the impact this has on costs and strategy.

What does the board need to know? All of the above, and preferably through an HR committee with members who are knowledgeable and can query the figures effectively. So that, heaven forbid, if the chief executive is trying to hide anything from the board, it has a good check on the detail.

Gill Taylor is a sector HR consultant

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