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Four lessons we learned from the Sports Direct report

In the wake of a damning report by the business, innovation and skills committee into Sports Direct’s employment practices, which was released to the public today (July 22), the company looks set to become a cautionary tale for retailers.

mike ashley index

 

While Sports Direct’s warehouse practices are extreme, there is a lot to learn from the report’s findings- some of which will be uncomfortably familiar to retailers, working in a complex and demanding industry. 

The customer doesn’t always come first- the workers do

With consumers demanding faster delivery and more customised services, an important thing to note from the Sports Direct enquiry is that this should not be at the detriment of the company’s employees. The report criticised the company for treating its employees as “commodities”, saying cheap products and profits for shareholders came at the cost of working conditions “way below acceptable standards in a modern, civilised economy.” While Sports Direct represents an extreme example of what happens when low-cost goods and profitability are put before the practicalities of the people who make it happen – when the fashion industry is moving so fast, it’s a lesson that needs to be kept in mind.

 

Don’t think of agency workers as a panacea

Much of the criticism in the report is aimed at the agency contractors that Sports Direct uses to employ its workers. MPs claim the contract terms give employees “maximum risk and minimum security at work”. While agencies provide a fast option for finding employees, the report says they are not always needed, not even in the fast-paced digital era. They deemed there was: “no convincing reason why Sports Direct engaged the workers through agencies on short-term, temporary contracts, other than to reduce costs and pass responsibility.”

 

Treat your employees fairly and equally, and things will run more smoothly

Order and discipline are highly valued qualities in employees, but the lesson to learn from the draconian treatment of workers at the Shirebrook warehouse is that this can easily be pushed too far. When that happens, conditions become unsafe and people get hurt. The report found that 110 ambulances or paramedic cars were dispatched to the Shirebrook warehouse’s postcode between January 1 2013 and April 19 2016 with 50 cases classified as “life-threatening”. Although an extreme example, it proves that badly treated workers creates a dangerous environment. Luke Primarolo, regional officer at Unite, said: “When you have people under that much fear, they come into work ill. When you get presenteeism in the workplace that creates a significant health and safety risk, because these people are now not only at risk to themselves but they are at risk to those they are working with.”

 

Don’t run your workspace like a workhouse

Steve Turner, assistant general secretary at Unite, summarised the ethos behind the working practices in the warehouse, as treating its employees with: “an arrogance and a contempt at the very highest level of this business. We have it described to us as a gulag, as Victorian, as a workhouse, not a warehouse. We believe that there is no place for these kinds of 19th century working practices in 21st century Britain.” Sports Direct seems to represent what happens when the safety and happiness of the workers are the last priority.

But fingers crossed, this lesson was quite an obvious one.

 

 

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