Why equalising new contracts makes business sense

[postslippete]

Equalising the new contracts with legacy contracts is often framed as a moral issue - same job, same pay. But imho there is a bigger operational and business reason why Royal Mail needs to get this right. The current logic from management is simple:

Lower wages = lower costs = savings.

But cheap labour only works if 1. people stay and 2. productivity remains high. If many new staff are leaving then the "hidden costs" will quickly outweigh any savings. Things like recruitment, training, reduced productivity and obviously the time experienced staff spend training rather than delivering plus the time it takes for new recruits to get up to speed.

Even a small productivity drop of 5–10% will wipe out any savings and RM tracks its cost per delivery. If a legacy postie consistently completes their full walks while a newer member brings work back, leaves their D2Ds, or returns parcels, then where are the savings? In our office, some of these guys are working until gone 5pm and still bring work back. Please don't get me wrong, this isn't about legacy vs new contracts but having a workforce that's aligned and motivated to do the job properly.

I just see the way that many of the new staff talk and behave and many of them feel undervalued. Some of them try to make up the perceived pay gap by claiming additional hours, while others bring work back or prioritise differently. But all this does is create more rework, increased overtime, and likely more customer complaints. Considering that RM now operates heavily on delivery windows, scan compliance, and 1st delivery success, these issues may not always reach the shop floor, but they will be visible in performance data somewhere

There’s also confusion around things like delivery supplement and D2Ds. Some of the newer staff believe that they aren’t being paid to deliver the D2Ds, which isn’t the case. But when people are already underpaid you can understand why they think that way. Poor service isn’t just a “nice to have” problem but it leads to lost customers and contracts,

The real danger for RM is that as new contract pay approaches minimum wage and the job remains physically demanding, that RM risks losing its recruitment advantage.

Cheap labour only saves money if:

1. Productivity stays high, and
2. Turnover stays low

If either falls, the savings disappear - and may actually cost more in the long run.

[TopperGas]

On the flip side paying everybody £15+ an hour makes RM less competitive in the parcels market, where the likes of Amazon are probably paying less than the minimum wage per hour?

[tramssirhc]

Equalising the new contracts with legacy contracts is often framed as a moral issue - same job, same pay. But imho there is a bigger operational and business reason why Royal Mail needs to get this right. The current logic from management is simple:

Lower wages = lower costs = savings.

But cheap labour only works if 1. people stay and 2. productivity remains high. If many new staff are leaving then the "hidden costs" will quickly outweigh any savings. Things like recruitment, training, reduced productivity and obviously the time experienced staff spend training rather than delivering plus the time it takes for new recruits to get up to speed.

Even a small productivity drop of 5–10% will wipe out any savings and RM tracks its cost per delivery. If a legacy postie consistently completes their full walks while a newer member brings work back, leaves their D2Ds, or returns parcels, then where are the savings? In our office, some of these guys are working until gone 5pm and still bring work back. Please don't get me wrong, this isn't about legacy vs new contracts but having a workforce that's aligned and motivated to do the job properly.

I just see the way that many of the new staff talk and behave and many of them feel undervalued. Some of them try to make up the perceived pay gap by claiming additional hours, while others bring work back or prioritise differently. But all this does is create more rework, increased overtime, and likely more customer complaints. Considering that RM now operates heavily on delivery windows, scan compliance, and 1st delivery success, these issues may not always reach the shop floor, but they will be visible in performance data somewhere

There’s also confusion around things like delivery supplement and D2Ds. Some of the newer staff believe that they aren’t being paid to deliver the D2Ds, which isn’t the case. But when people are already underpaid you can understand why they think that way. Poor service isn’t just a “nice to have” problem but it leads to lost customers and contracts,

The real danger for RM is that as new contract pay approaches minimum wage and the job remains physically demanding, that RM risks losing its recruitment advantage.

Cheap labour only saves money if:

1. Productivity stays high, and
2. Turnover stays low

If either falls, the savings disappear - and may actually cost more in the long run.

It's not about savings, it's about profit. The extraction of what we create. You imply that there is real competition between the employers, which there isn't. Its an oligopoly. Have you ever tried to complain about the service you received from this oligopoly? Is almost impossible.

Behaviour breeds behaviour. The way workers are treated and organised is a reflection of the organisation of an employer. If workers feel undervalued or exploited that will be because of the organisation of the employer they work for. It also depends where in that organisation they work. HGV drivers across the industry are paid relative to the rate for all the employers in the oligopoly to prevent loss of workers.

Delivery has always been hyper-explotative. For example workers used to be able to deliver their own work as well as letters on rural duties until the GPO demanded their share of that profit and made it a disciplinary offence whilst introducing additional work to those duties. These rural workers walked miles yet were not provided with any footwear by the GPO.

Equalisation of terms and conditions is not a moral issue. For the CWU it's a recruitment issue. For workers it's a survival issue. The terms and conditions of one worker are and will be the terms and conditions of all workers.

[BenacreNick]

Er, no staff are being paid to deliver the d2d's.

[pieoftheday]

Equalising the new contracts with legacy contracts is often framed as a moral issue - same job, same pay. But imho there is a bigger operational and business reason why Royal Mail needs to get this right. The current logic from management is simple:

Lower wages = lower costs = savings.

But cheap labour only works if 1. people stay and 2. productivity remains high. If many new staff are leaving then the "hidden costs" will quickly outweigh any savings. Things like recruitment, training, reduced productivity and obviously the time experienced staff spend training rather than delivering plus the time it takes for new recruits to get up to speed.

Even a small productivity drop of 5–10% will wipe out any savings and RM tracks its cost per delivery. If a legacy postie consistently completes their full walks while a newer member brings work back, leaves their D2Ds, or returns parcels, then where are the savings? In our office, some of these guys are working until gone 5pm and still bring work back. Please don't get me wrong, this isn't about legacy vs new contracts but having a workforce that's aligned and motivated to do the job properly.

I just see the way that many of the new staff talk and behave and many of them feel undervalued. Some of them try to make up the perceived pay gap by claiming additional hours, while others bring work back or prioritise differently. But all this does is create more rework, increased overtime, and likely more customer complaints. Considering that RM now operates heavily on delivery windows, scan compliance, and 1st delivery success, these issues may not always reach the shop floor, but they will be visible in performance data somewhere

There’s also confusion around things like delivery supplement and D2Ds. Some of the newer staff believe that they aren’t being paid to deliver the D2Ds, which isn’t the case. But when people are already underpaid you can understand why they think that way. Poor service isn’t just a “nice to have” problem but it leads to lost customers and contracts,

The real danger for RM is that as new contract pay approaches minimum wage and the job remains physically demanding, that RM risks losing its recruitment advantage.

Cheap labour only saves money if:

1. Productivity stays high, and
2. Turnover stays low

If either falls, the savings disappear - and may actually cost more in the long run.

It's not about savings, it's about profit. The extraction of what we create. You imply that there is real competition between the employers, which there isn't. Its an oligopoly. Have you ever tried to complain about the service you received from this oligopoly? Is almost impossible.

Behaviour breeds behaviour. The way workers are treated and organised is a reflection of the organisation of an employer. If workers feel undervalued or exploited that will be because of the organisation of the employer they work for. It also depends where in that organisation they work. HGV drivers across the industry are paid relative to the rate for all the employers in the oligopoly to prevent loss of workers.

Delivery has always been hyper-explotative. For example workers used to be able to deliver their own work as well as letters on rural duties until the GPO demanded their share of that profit and made it a disciplinary offence whilst introducing additional work to those duties. These rural workers walked miles yet were not provided with any footwear by the GPO.

Equalisation of terms and conditions is not a moral issue. For the CWU it's a recruitment issue. For workers it's a survival issue. The terms and conditions of one worker are and will be the terms and conditions of all workers.

'Delivered their own work aswell as letters?'
' not provided footwear?' Can you elaborate? Thanks

[postslippete]

On the flip side paying everybody £15+ an hour makes RM less competitive in the parcels market, where the likes of Amazon are probably paying less than the minimum wage per hour?

Yes, I agree, but cheap labour only saves money if productivity stays high and turnover stays low.

I was thinking about this while I was out on my round today. Amazon can tolerate a higher churn because their delivery model is very different to RM. Amazon is heavily parcel-focused and new drivers are working off geo-route so they can become productive relatively quickly. Compare that with RM where the job relies more on local knowledge, handling a mix of letters, parcels and collections. It takes time to learn a round properly, and get used to the physical side of walking 10+ miles a day while getting familiar to an area.

Because of that productivity can vary significantly. A postie might complete a round in 4 hours while someone else could easily be taking 7 hours or more. That difference has a direct impact on cost per delivery - something Amazon’s model is less sensitive to because their routes are probably better structured. Also, there are no real individual performance standards in RM and I’m not saying that’s necessarily a bad thing, but it does raise an interesting question: if RM paid higher wages but expected stronger, more consistent performance standards, would that be more efficient than paying its staff less while accepting lower productivity and higher churn?

Amazon can easily absorb the churn because their model is built around it, whereas I don't think that RM’s can. I don't think this is a question on what we pay people - it’s whether the current operating model works efficiently with a lower productivity and/or high turnover. I personally think that we should be paid more than these gig economy couriers because we delivering more than just parcels. Our competitive adavantage has never really been about the "lowest wage", its reliability, coverage and service quality.

[postslippete]

It's not about savings, it's about profit. The extraction of what we create. You imply that there is real competition between the employers, which there isn't. Its an oligopoly. Have you ever tried to complain about the service you received from this oligopoly? Is almost impossible.

Behaviour breeds behaviour. The way workers are treated and organised is a reflection of the organisation of an employer. If workers feel undervalued or exploited that will be because of the organisation of the employer they work for. It also depends where in that organisation they work. HGV drivers across the industry are paid relative to the rate for all the employers in the oligopoly to prevent loss of workers.

Delivery has always been hyper-explotative. For example workers used to be able to deliver their own work as well as letters on rural duties until the GPO demanded their share of that profit and made it a disciplinary offence whilst introducing additional work to those duties. These rural workers walked miles yet were not provided with any footwear by the GPO.

Equalisation of terms and conditions is not a moral issue. For the CWU it's a recruitment issue. For workers it's a survival issue. The terms and conditions of one worker are and will be the terms and conditions of all workers.

You've emphasised part of what I was saying - if people feel undervalued then that will show up in productivity, retention and service quality. And what do you mean that there isn't any real competition between the employers? Competition still exists for contracts and if service levels drop then customers will move.

My point is if lower pay leads to higher churn and/or lower productivity then it becomes a business problem regardless of whether the goal is profit or savings. RM used to be able to attract and retain people because the job was seen as relatively stable with decent conditions. If pay drifts closer to minimum wage while the job still remains physically demanding then that recruitment advantage disappears. The management still has choices about how they structure the workforce, and those choices have consequences. End of. This isn't about ideology but whether RM ends up with a stable, experienced workforce capable of delivering a reliable service. If that weakens then it affects everyone - workers, customers, and the business itself.

[tramssirhc]

Equalising the new contracts with legacy contracts is often framed as a moral issue - same job, same pay. But imho there is a bigger operational and business reason why Royal Mail needs to get this right. The current logic from management is simple:

Lower wages = lower costs = savings.

But cheap labour only works if 1. people stay and 2. productivity remains high. If many new staff are leaving then the "hidden costs" will quickly outweigh any savings. Things like recruitment, training, reduced productivity and obviously the time experienced staff spend training rather than delivering plus the time it takes for new recruits to get up to speed.

Even a small productivity drop of 5–10% will wipe out any savings and RM tracks its cost per delivery. If a legacy postie consistently completes their full walks while a newer member brings work back, leaves their D2Ds, or returns parcels, then where are the savings? In our office, some of these guys are working until gone 5pm and still bring work back. Please don't get me wrong, this isn't about legacy vs new contracts but having a workforce that's aligned and motivated to do the job properly.

I just see the way that many of the new staff talk and behave and many of them feel undervalued. Some of them try to make up the perceived pay gap by claiming additional hours, while others bring work back or prioritise differently. But all this does is create more rework, increased overtime, and likely more customer complaints. Considering that RM now operates heavily on delivery windows, scan compliance, and 1st delivery success, these issues may not always reach the shop floor, but they will be visible in performance data somewhere

There’s also confusion around things like delivery supplement and D2Ds. Some of the newer staff believe that they aren’t being paid to deliver the D2Ds, which isn’t the case. But when people are already underpaid you can understand why they think that way. Poor service isn’t just a “nice to have” problem but it leads to lost customers and contracts,

The real danger for RM is that as new contract pay approaches minimum wage and the job remains physically demanding, that RM risks losing its recruitment advantage.

Cheap labour only saves money if:

1. Productivity stays high, and
2. Turnover stays low

If either falls, the savings disappear - and may actually cost more in the long run.

It's not about savings, it's about profit. The extraction of what we create. You imply that there is real competition between the employers, which there isn't. Its an oligopoly. Have you ever tried to complain about the service you received from this oligopoly? Is almost impossible.

Behaviour breeds behaviour. The way workers are treated and organised is a reflection of the organisation of an employer. If workers feel undervalued or exploited that will be because of the organisation of the employer they work for. It also depends where in that organisation they work. HGV drivers across the industry are paid relative to the rate for all the employers in the oligopoly to prevent loss of workers.

Delivery has always been hyper-explotative. For example workers used to be able to deliver their own work as well as letters on rural duties until the GPO demanded their share of that profit and made it a disciplinary offence whilst introducing additional work to those duties. These rural workers walked miles yet were not provided with any footwear by the GPO.

Equalisation of terms and conditions is not a moral issue. For the CWU it's a recruitment issue. For workers it's a survival issue. The terms and conditions of one worker are and will be the terms and conditions of all workers.

'Delivered their own work aswell as letters?'
' not provided footwear?' Can you elaborate? Thanks

Have a read of 'The Postal Paths' by Alan Cleaver. Lovely book, easy read.

[tramssirhc]

It's not about savings, it's about profit. The extraction of what we create. You imply that there is real competition between the employers, which there isn't. Its an oligopoly. Have you ever tried to complain about the service you received from this oligopoly? Is almost impossible.

Behaviour breeds behaviour. The way workers are treated and organised is a reflection of the organisation of an employer. If workers feel undervalued or exploited that will be because of the organisation of the employer they work for. It also depends where in that organisation they work. HGV drivers across the industry are paid relative to the rate for all the employers in the oligopoly to prevent loss of workers.

Delivery has always been hyper-explotative. For example workers used to be able to deliver their own work as well as letters on rural duties until the GPO demanded their share of that profit and made it a disciplinary offence whilst introducing additional work to those duties. These rural workers walked miles yet were not provided with any footwear by the GPO.

Equalisation of terms and conditions is not a moral issue. For the CWU it's a recruitment issue. For workers it's a survival issue. The terms and conditions of one worker are and will be the terms and conditions of all workers.

You've emphasised part of what I was saying - if people feel undervalued then that will show up in productivity, retention and service quality. And what do you mean that there isn't any real competition between the employers? Competition still exists for contracts and if service levels drop then customers will move.

My point is if lower pay leads to higher churn and/or lower productivity then it becomes a business problem regardless of whether the goal is profit or savings. RM used to be able to attract and retain people because the job was seen as relatively stable with decent conditions. If pay drifts closer to minimum wage while the job still remains physically demanding then that recruitment advantage disappears. The management still has choices about how they structure the workforce, and those choices have consequences. End of. This isn't about ideology but whether RM ends up with a stable, experienced workforce capable of delivering a reliable service. If that weakens then it affects everyone - workers, customers, and the business itself.

The postal industry is an oligopoly of a handful of large businesses. The bosses meet regularly and agree what they will do not to drive each other out of business. In a real market of competition there would be no rigging of the market and they would drive each other out of business. In place of that they seek profit by exploiting everything else that they can without completely undermining each other. In this current phase of capitalism there is no real competition which is why regulators exist, to create the illusion of a market.

[postmanplod2026]

i think royal mail are in for a shock still if they equalise contracts thinking that will stop people leaving in their droves? the reason people are leaving is nothing to do with money its because the job is impossible, not enough staff, out all day and night becoming like amazon, lets get real the job is shite

[SpacePhoenix]

On the flip side paying everybody £15+ an hour makes RM less competitive in the parcels market, where the likes of Amazon are probably paying less than the minimum wage per hour?

Yes, I agree, but cheap labour only saves money if productivity stays high and turnover stays low.

I was thinking about this while I was out on my round today. Amazon can tolerate a higher churn because their delivery model is very different to RM. Amazon is heavily parcel-focused and new drivers are working off geo-route so they can become productive relatively quickly. Compare that with RM where the job relies more on local knowledge, handling a mix of letters, parcels and collections. It takes time to learn a round properly, and get used to the physical side of walking 10+ miles a day while getting familiar to an area.

Because of that productivity can vary significantly. A postie might complete a round in 4 hours while someone else could easily be taking 7 hours or more. That difference has a direct impact on cost per delivery - something Amazon’s model is less sensitive to because their routes are probably better structured. Also, there are no real individual performance standards in RM and I’m not saying that’s necessarily a bad thing, but it does raise an interesting question: if RM paid higher wages but expected stronger, more consistent performance standards, would that be more efficient than paying its staff less while accepting lower productivity and higher churn?

Amazon can easily absorb the churn because their model is built around it, whereas I don't think that RM’s can. I don't think this is a question on what we pay people - it’s whether the current operating model works efficiently with a lower productivity and/or high turnover. I personally think that we should be paid more than these gig economy couriers because we delivering more than just parcels. Our competitive adavantage has never really been about the "lowest wage", its reliability, coverage and service quality.

As well as keeping the walk info books in the DOs up to date, why doesn't RM either have an app or in-app info about the walks so that as you go around your walks, you get relevant info displayed such as directions if it's a hard place to find or things like loose dog hazards?

[yellowbelly]

On the flip side paying everybody £15+ an hour makes RM less competitive in the parcels market, where the likes of Amazon are probably paying less than the minimum wage per hour?

Yes, I agree, but cheap labour only saves money if productivity stays high and turnover stays low.

I was thinking about this while I was out on my round today. Amazon can tolerate a higher churn because their delivery model is very different to RM. Amazon is heavily parcel-focused and new drivers are working off geo-route so they can become productive relatively quickly. Compare that with RM where the job relies more on local knowledge, handling a mix of letters, parcels and collections. It takes time to learn a round properly, and get used to the physical side of walking 10+ miles a day while getting familiar to an area.

Because of that productivity can vary significantly. A postie might complete a round in 4 hours while someone else could easily be taking 7 hours or more. That difference has a direct impact on cost per delivery - something Amazon’s model is less sensitive to because their routes are probably better structured. Also, there are no real individual performance standards in RM and I’m not saying that’s necessarily a bad thing, but it does raise an interesting question: if RM paid higher wages but expected stronger, more consistent performance standards, would that be more efficient than paying its staff less while accepting lower productivity and higher churn?

Amazon can easily absorb the churn because their model is built around it, whereas I don't think that RM’s can. I don't think this is a question on what we pay people - it’s whether the current operating model works efficiently with a lower productivity and/or high turnover. I personally think that we should be paid more than these gig economy couriers because we delivering more than just parcels. Our competitive adavantage has never really been about the "lowest wage", its reliability, coverage and service quality.

As well as keeping the walk info books in the DOs up to date, why doesn't RM either have an app or in-app info about the walks so that as you go around your walks, you get relevant info displayed such as directions if it's a hard place to find or things like loose dog hazards?

We have notifications on 'Outdoor' such as ones customers raise with their own message such as 'Please wait longer' or item specific ones for 'Safe place' or 'Neigbhour' delivery. Dogs hazards should come up as long as the duty holder has raised it and the manager has put it on the system - often doesn't happen.

Don't have 'directional' ones. That's 'The knowledge' which should be passed on during training for the walk - which rarely happens as often mentioned on threads.

[postslippete]

The postal industry is an oligopoly of a handful of large businesses. The bosses meet regularly and agree what they will do not to drive each other out of business. In a real market of competition there would be no rigging of the market and they would drive each other out of business. In place of that they seek profit by exploiting everything else that they can without completely undermining each other. In this current phase of capitalism there is no real competition which is why regulators exist, to create the illusion of a market.

The UK parcel delivery market does have a few large dominant players like RM, Evri and Amazon so this does resemble something of an oligopoly but competition absolutely exists. RM itself lost significant market share in parcels over the last decade - are you telling me that this was deliberate? That this was due to the bosses of rival companies meeting regularly and agreeing on what they will do and not do. And regulators creating the illusion of a market? It's ideological rather than factual. Even in concentrated industries, companies still compete for contracts and customers.

But regardless of Marxist ideology, the truth is that RM's operating model relies heavily on experience and stability and if that weakens due to staff leaving and a lower morale then that becomes a real operational and business issue.

[Mr Rush]

Don't have 'directional' ones. That's 'The knowledge' which should be passed on during training for the walk - which rarely happens as often mentioned on threads.

Very difficult to train a new start on how to make their way around your walk/loops when the entire week they're on with you don't touch the letters at all! Yes, the real 3 into 2. Our intake from November were in the job for two months before actually traversing a loop on foot.

[Smoothbackground]

It is perfectly normal and permissible for business competitors to meet socially/cosily and to share “market insights”, but obviously going that step further and colluding on price etc is a criminal offence. There is a big difference…