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THE NATIONAL MINIMUM WAGE AND EMPLOYERS' TRAINING DECISIONS
Research report commissioned by the Low Pay Commission >>Back to main index Part 2 - Methodology Overview The research had two phases: an initial phase in which employers in the identified regions and sectors were contacted by telephone; and a second phase consisting of a series of case studies. In the first phase, employers were telephoned and asked a short set of questions to provide a profile of their employees, wage structure and training activity. One hundred and seventy-five employers were contacted during this phase of the work and 121 agreed to answer questions. On the basis of the answers received organisations were selected to take part in the later, in-depth interview phase. Organisations were sought for the interview phase that had been affected by introduction of the NMW (even if only marginally), had at least some employees on lower wage rates, and had either increased or decreased their training in the past three years. Organisations that met all or most of these criteria were invited to participate in the second part of the research, which comprised individual interviews. Selection of Participants The research was conducted within three sectors of the economy: Hotel and Catering; Hairdressing and Retail. Seven geographical areas were identified around Britain in which the research would be focussed: Wales, Scotland, the Midlands, North, North West and South West of England, and in and around London. Eight organisations were sought to act as case studies within each sector, giving a total of 24 case study organisations. The Low Pay Commission wished to focus on smaller organisations and therefore these formed the majority both of those contacted in the initial telephone contact stage, and subsequently in the case studies. Potential interviewees for the case studies were selected from amongst those initially contacted by telephone. Organisations selected were those that both met selection criteria identified by the project sponsors and who were willing to be interviewed. It should be noted that it was difficult to gain agreement to interview from employers who reported having decreased training, and therefore these are not well represented in the sample. Interviews were conducted in a total of 26 organisations: nine organisations in the hospitality sector, along with eight hairdressers and nine retailers. However, responses from two were of insufficient detail to allow inclusion in some stages of the analysis, and therefore at some places in the report of the case study findings the number of cases falls to 24. Materials An initial short telephone interview script was designed in consultation with the Low Pay Commission, to obtain the necessary information to profile companies. This script is shown at Appendix A. A script to serve as the basis for the subsequent case study interviews was also designed in consultation with the Low Pay Commission and, following its finalisation, was customised at relevant points to take into account the different groups of workers in each sector. The customised version developed for the hospitality sector is shown at Appendix B. Procedure Telephone interviews A list of 1500 companies was purchased from BT Business Database which gave addresses and telephone numbers and, in some cases, contact names, for companies in the identified sectors and regions. This was supplemented by contact details supplied from the marketing list of IRSR’s sister company, IRS. Companies were contacted and, after a brief explanation of the research, asked if they could spare a few minutes to talk to the interviewer. The interviewer then went through the list of questions and, if the responses matched the profile of organisations that was being sought, asked if the interviewee might be prepared to be interviewed at a later stage of the research (see Appendix A for details). Notes of all telephone interviews conducted were kept for later analysis. The outcomes of this stage of the research are reported in Part 3 of the report. Case studies Rationale for selection of organisations A key aim of the research was to determine whether the NMW was having any impact on employers’ decisions regarding provision of training. Two possible scenarios had been suggested: that employers, faced with increasingly difficult economic circumstances arising from increased wages bills, would seek to reduce costs, including those arising from training; or alternatively, that employers faced with increased wage bills would seek to maximise the productivity of their workforce by increasing investment in training to develop their employees. Therefore the intention had been to interview equal numbers of employers who had increased and decreased training provision. Selection criteria Wherever possible employers were selected who reported that they had been affected (if only marginally) by the introduction of the minimum wage, had some staff on wage rates between £4.10 and £4.50 an hour (£4.10 being the national minimum wage at the time the research was conducted), and reported that training had either increased or decreased in the last three years (i.e. in the period since introduction of the NMW). Initially, equal numbers of those who reported having increased and decreased training were sought. However, it proved difficult to persuade those who had decreased training to participate in the interviews, and just four of these were recruited. In fact, there were difficulties in general in gaining agreement to the interviews. Many cited staff reductions and increasingly high workloads. The following are two of the situations described: The Human Resource Manager of a hotel close to one of the London airports explained that the hotel belonged to a small group of international hotels. The business of the group had been severely affected by September 11th: one of their hotels was next to Ground Zero and had lost almost all of its business; in addition, the hotel at which the respondent was located gained most of its business from the nearby airport and had therefore much of its custom from business air travel had declined following September 11th . The hotel group had responded by increasing its training activity to increase revenue and increase flexibility in its workforce. However, that flexibility included the respondent having to take on responsibility for a second hotel, virtually doubling her workload overnight. The Training Manager of a branch of a well-known upmarket chain of hotels agreed to answer the initial profiling questions. She explained that they employed modern apprentices and had employees undertaking NVQs. They utilised a mixture of in-house and external training, and this had reduced over the last three years. When asked if she might consider giving an interview, she explained that as part of the reductions in training she was being made redundant the following week. In an attempt to gain a larger sample of employers who had reduced their training provision, the initial telephone contact and profiling period was extended until the end of March. Employers were also offered the option of a telephone interview to reduce the demands on their time. In the end though, it was possible to persuade only four employers who had reduced training to participate in the study. In one of these cases, although initially they said that training had been reduced, it emerged in the later interview that they were conducting almost no training, and this had probably been the case since some time before the introduction of the NMW. This made several of the interview questions inappropriate to ask, given their circumstances, and therefore their responses are missing from sections of the research reported in Part 4. Given the deficit of employers who had decreased training, it was decided to also include those who had maintained training at the same level. Four interviews with employers who had maintained the same level of training were booked; one of these cancelled, leaving three in total. One employer was interviewed who had increased training for one group of employees (mainly production and managerial staff) while maintaining it at the same level for the retail staff. They are recorded under ‘same level of training in Table 2.1, below, although in the interview they were asked about their reasons for increasing training where this was appropriate. Table 2.1. shows the number of interviews booked and the numbers completed. Table 2.1: Location of case study interviews booked and completed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Whilst accepting that the low numbers of interviewees and skewed nature of the sampling means that the sample cannot be seen as representative of employers as a whole, nonetheless the interviews give some indication of employers' views. The outcomes of the case studies are reported in Part 4 of this report. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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