Fair Work action plan 2022 and Anti-Racist Employment Strategy 2022: business and regulatory impact assessment

7. Conclusions

This BRIA assesses the potential impacts of the implementation of proposed actions set out within Scottish Government's proposed RAP and ARES. The assessment has been carried out in line with Scottish Government guidance and has been informed by consultation and further engagement with stakeholders and short life working groups.

It is recommended that the Scottish Government continue with the delivery of the RAP and ARES. The importance of the actions set out are clearly rationalised and explained. The content of each was developed and influenced by the 2021 consultation on Scotland Becoming a Fair Work Nation and further stakeholder engagement, including the short life working groups. The Scottish Government will progress the actions set out in line with governance arrangements and project management principles to track and monitor. The Scottish Government is clear that it will continue to work with stakeholders as it delivers the RAP and ARES.

Together the RAP and ARES set out a number of actions that together aim to further progress and refine the Fair Work agenda in Scotland. Key themes across all measures include: securing high quality employment opportunities which pay at least the real Living Wage and enable effective worker voice for workers in Scotland; and tackling existing labour market inequalities including employment rates and pay across groups with protected characteristics including gender, racialised minority and disabled workers.

This BRIA has assessed the potential costs and benefits of each of the actions set out in the RAP and ARES. The assessment has been informed by: a review of relevant legislation, policy and guidance; a baseline assessment of key business, employment and labour market statistics; a review of existing literature and research into the potential economic impacts of Fair Work measures; and consultation with Scottish businesses and trade organisations.

The implementation of Fair Work measures would be likely to incur short-term implementation and ongoing financial costs for organisations. Costs would be incurred on a voluntary basis for most of the actions set out in the RAP and ARES, since most actions require voluntary participation by organisations who can decide not to apply for a grant or for public sector contract. The exceptions to this are actions concerned with public sector grant conditionality, through which organisations would be required to pay the real Living Wage and support channels for effective worker voice to qualify for grant eligibility.

A review of research into the potential benefits of Fair Work measures adopted by organisations such as those set out in the RAP and ARES has informed the assessment of the potential benefits of Fair Work. A number of research studies have established measures can in the long-term: drive worker satisfaction and in turn productivity and innovation in the workplace; support higher staff retention rates, and therefore lower staff hiring, onboarding and training costs; and generate a more diverse workforce resulting in a stronger labour market. These measures would be expected to support organisational productivity, competitiveness, and a higher quality of services and production – all of which could have beneficial impacts for the Scottish economy that could be greater than potential disbenefits.

Further, where there are asks of employers to implement changes, guidance being developed by Scottish Government alongside other actions in the RAP commit to supporting employers to adopt Fair Work.

The RAP will also be supported by an evidence plan to be published late 2023 along with the accompanying measurement framework. It will set out further work to:

• Monitor the Fair Work context and progress that Scottish Government are making over time over to ensure actions respond to change;
• Draw lessons from other comparable economies on what is achievable and what has worked in different contexts;
• How to address data and wider evidence gaps in relation to a range of issues across the different dimensions of Fair Work; and
• Monitor and measure the impact of our current actions including drawing lessons from actions we will deliver as part of this plan.

The following recommendations set out in this BRIA intend to support the potential positive impacts of the measures set out in the RAP and ARES. In particular, clear, evidence-based guidance from Scottish Government on effective methods to implement specific Fair Work measures would be expected to minimise potential setup costs, and maximise potential beneficial impacts by supporting effective and efficient outcomes for organisations, workers and in turn the Scottish economy.