Charting the week: Royal Mail, Tesco and the four-day week

From Tesco's pay rises to Royal Mail's surveillance scandal, we analyse the highs and lows of the business world this week
Boom Bust

High: Tesco workers

Tesco agreed this week to increase pay for its store workers for the third time in 10 months. More than 200,000 store staff will get a 7% uplift in their hourly wages. For staff outside London, that will mean earning £11.02 per hour, while London workers will earn at least £11.75 per hour, with an extra 20p for those in inner boroughs.

The move has been welcomed as a relief for employees struggling amid the cost of living crisis – not least by union Usdaw, which called it a “significant step forward for pay within Tesco retail”. A spokesperson added: “It demonstrates the value of employers engaging constructively with trade unions at this incredibly difficult time”.

Lidl, Aldi and Asda have all also made similar increases in recent months and now all pay close to or above £11 per hour. That’s more than the current National Living Wage as set by the government, which is £9.50 for those aged over 23 (but will rise to £10.42 from April), and above the Living Wage as set by the Living Wage Foundation, which is £9.90 outside London and £11.05 in the capital.

All told, over the past year Tesco has increased wages by an inflation-busting 15%. Retail workers are still relatively low paid, but the move shows that despite increases in its own costs caused by soaring energy and raw material prices, Tesco believes increasing pay for staff is the right thing to do. More firms should follow suit.

Low: Royal Mail’s credibility

Protesters Hold Placards Saying "thompson Out" During The

Royal Mail’s CEO Simon Thompson appeared before the business select committee on Wednesday for what was by all accounts a right scolding.

MPs accused Thompson of deliberately avoiding the company’s obligation to deliver letters six days a week. The company has blamed the rule for its growing unprofitability amid plummeting letter volumes.

Meanwhile, Thompson admitted that data from postal workers’ handheld scanners had been used to track deliveries and even discipline staff on occasion. Royal Mail had previously denied this level of staff surveillance. This week, Thompson blamed “rogue” managers for posting details of staff who stopped during their rounds.

Darren Jones, chair of the committee, said Thompson was “blaming everyone else” for the company’s problems. “We have rogue posters, rogue managers, we have isolated incidents, we have a global pandemic, we have industrial action… It is everyone else’s fault, nothing to do with me, guv.”

Royal Mail faces a number of challenges, from ongoing strikes to mounting losses. The once premium British brand is taking a hit as it struggles with its universal service obligation. Thompson’s appearance before MPs has done it no favours.

One UK business story captured imaginations worldwide this week – the release of results from the UK’s four-day week pilot. The findings were clear: 96% of both employers and workers would like to continue, after productivity stayed the same while levels of fatigue and burnout fell.

Workers liked it so much, in fact, that most would want to receive a significant bump in pay in order to jump ship for a rival company with a five-day week.

It’s clear that for the, admittedly self-selecting, businesses that took part this has been a success. The key question is whether there really is the enthusiasm across the British economy and business leaders for it to reach critical mass.