The Centre for Progressive Policy (CPP), an economics think tank, today launches the CPP Good Employer Index, ranking the best and worst major UK employers

CPP’s Good Employer Index ranks the 25 largest UK employers - accounting for 2.3 million workers - on the extent to which they provide good employment. For the first time, the index combines publicly available data to mark public and private sector organisations against seven key components of good employment: pay and benefits, terms of employment, training and progression, working conditions, work life balance, voice and representation, diversity and recruitment.

The analysis reveals that outsourcing company Capita ranks the lowest due to low scores on most measures, particularly a high gender pay gap and a large number of employment tribunals per 1,000 employers, just ahead of Morrisons which is let down by poor employee ratings.

Employee owned John Lewis Partnership (including Waitrose) comes top among the UK’s major employers as it performs well in employee ratings and has the highest scores for pay and benefits. Barclays, RBS, the MoD (including the Armed Forces) and Network Rail complete the top five whilst two more major banks (HSBC and Lloyds) are found in the top ten.

Further key findings include that only four of the largest 25 employers pay the real Living Wage. Moreover, public sector employers tend to score more highly, but private companies top the index.

Of the individual measures that make up the index, the most important predictor of the overall score was voluntarily reporting CEO pay ratios. The report found that employers who voluntarily reported the metric this year did significantly better on other aspects of the index, suggesting transparent employers tend to be better employers.

CPP are calling for:

• Public sector organisations to require prospective contractors to submit employment practice information as part of the procurement process, ensuring public money is used to support good employment (the data is already collected so adds no additional burden to business).

• BEIS to improve transparency by
  • restarting the non-compliance naming scheme for organisations that violate minimum wage regulations
  • ensuring that company structures are published on Companies House
  • requiring employers to publish the contract types of their workforce
  • implementing the Taylor Review recommendations on reporting workforce structure through existing staff surveys
• Local leaders to use the measurement framework to enforce local business charters and hold public procurement contractors to account
• Businesses in the index to reflect on their ranking and how they can improve their employment practices
• All other businesses to use CPP’s online tool to check their own employer practices.

On publishing the index, Charlotte Alldritt, Director, Centre for Progressive Policy, said,

“Good jobs are a cornerstone of inclusive growth as employers have a major impact on our lives when it comes to job security, leisure time, pay, mental and physical health. However, until now it has been very hard to assess how our biggest employers are doing.

We are calling for the next government to increase the availability of public data on employment practices. If government is serious about supporting good work, then we need a way to hold businesses and public sector organisations to account.

CPP aims to improve the quality of work in the UK by helping the largest employers set a good example, and – through our online tool – enable firms to understand and enhance their own employment practices.”

Notes to editors

1. The report can be downloaded here.
2. This report is the third in a series by the Centre for Progressive Policy and APPG on Inclusive Growth measuring inclusive growth at country, community and employer level. Our intention is to help define inclusive growth and present a set of measures against which we can provide a snapshot of inclusive growth today and track progress and test public policy interventions in the future. Taken together, this series of reports delivers the most comprehensive set of measures yet on the multi-dimensional nature of inclusive growth. Our country level report called for inclusive growth metrics to set the direction of travel of the national economy. The community level report deepened our understanding of how local areas can act to drive inclusive growth, identifying health and good jobs as the critical drivers
3. Despite being popularly known as the largest employer in the country, the NHS does not feature in our published index as staff are employed by individual NHS trusts in England or NHS boards elsewhere in the UK. As the largest of these are too small to feature in this edition of our index, we will be conducting separate work at a future date to specifically investigate the NHS as an employer.
4. The Centre for Progressive Policy is an independent and impartial not-for profit organisation, currently fully funded by Lord David Sainsbury. The CPP Director and staff retain full editorial responsibility and control of the scope, content, conclusions and recommendations of CPP's work. The Centre for Progressive Policy is not associated with J Sainsbury plc (included here as one of the largest UK private sector employers), or any other corporation.
5. The Centre for Progressive Policy is a think tank committed to making inclusive economic growth a reality. By working with national and local partners, our aim is to devise effective, pragmatic policy solutions to drive productivity and shared prosperity in the UK. Inclusive growth is one of the most urgent questions facing advanced economies where stagnant real wages are squeezing living standards and wealth is increasingly concentrated. CPP believes that a new approach to growth is needed, harnessing the best of central and local government to shape the national economic environment and build on the assets and opportunities of place.
6. For more information on the Centre for Progressive Policy, please see www.progressive- policy.net or follow @CentreProPolicy
7. For interview requests, please contact Thomas Hauschildt (THauschildt@progressive- policy.net), 020 7070 3370.

Key findings

Only four of the largest 25 employers pay the real Living Wage. The real Living Wage is calculated by the Living Wage Foundation (LWF) according to how much employees and their families need to live. There are over 5,000 living wage organisation but only four of the 25 largest employers – the banks HSBC, Lloyds, Barclays and RBS – are signed up to pay it. By contrast, these banks have the four highest gender pay gaps of the 25.

Public sector employers tend to score more highly, but private companies top the index. The six public sector organisations in our index tended to have higher than average good employer scores, however, the top three are all private sector companies. In particular, top to median pay ratios were much lower for public, compared to private, sector employers: public sector pay ratios reached a maximum of 15 (Network Rail) whereas the maximum private sector pay ratio was nearly 400 (Compass Group). Public sector performance on contract violations and employee review measures is more mixed.

Whilst sector is important, it only explains a third of the differences between organisations. Both the retail and public sector are spread across the rankings with John Lewis and the Ministry of Defence coming at the top in contrast to Morrisons and Metropolitan Police which both rank towards the bottom of our index. The reason that, for example, Morrisons has a higher gender pay gap than John Lewis, is not immediately clear and the causes of these within-sector differences is an area that warrants further investigation.

Voluntarily reporting CEO pay ratios is a particularly good indicator of whether an employer ranks highly on our index. Next year companies will be legally required to report their pay ratio. We found that employers who voluntarily reported the metric this year did significantly better on other aspects of our index, suggesting transparent employers tend to be better employers. A key virtue of our index is that it is applicable to all large employers, not just those who opt in and therefore may already be transparent.