What is the development?

Over the past few months, we will all have read about (or at least seen the headlines) regarding the evolving tale of Sports Direct and its increasing notoriety as an employer.

Following reports of widespread zero hours contracts, pay below minimum wage, staff being penalised for taking toilet breaks and many other criticisms, Sports Direct found itself the focus of publicity for all the wrong reasons.  Following a campaign by Unite the union and investigation by a parliamentary committee, the company is now pledging to improve standards for its staff.  It also now needs to deal with mounting pressure from its shareholders, a fall in its share value and dramatically reduced profit forecasts.

What does this mean for employers?

All employers can learn from the Sports Direct controversy.  What it really demonstrates is how employee conditions and fair treatment can have a significant commercial impact on the business and its reputation.

It is probably fair to say that Sports Direct never particularly tried to portray itself as an ethical business or a values-driven employer.  It didn’t strive to market itself as a ‘great place to work’ as part of an enticing employer brand.  However, the impact has still been hard hitting.

Whilst values-driven or ethical businesses may see themselves as detached from the Sports Direct experience, it still sends a very relevant message.

For employers whose brand or reputation is intrinsically linked to its driving values or who take steps to communicate those values internally to staff, expectations are so much higher.   For those organisations, it might not take anything as extreme as penalties for toilet breaks to cause damage to their external brand/reputation or their workplace culture and morale.