A very interesting article written by Emma Shipp and Lynne Adams from Personnel Today and gives insight into HR strategy and some areas to focus on.
Emma Shipp and Lynne Adams take a punt on technological change, new legislation, societal trends and, yes, Brexit, to lay out the likely challenges for HR professionals over the next 10 years.
Consider the changes that have taken place in the employment arena in the past 10 years. In 2009 millennials were still at school and the term “gig” generally referred to a concert rather than an economy. Flexible working, while theoretically possible, was not generally encouraged and nine to five employment was still very much the norm – provided you were lucky enough to have a job that is.
Reported unemployment rates in the UK in 2009 were nearly at the peak of 8% whereas now they are just half that at 4%. So what does the future hold for workers in the UK? What challenges will HR teams face in 2029 and how can you best prepare for those?
Direction of travel to continue
The gig economy is here to stay with employees and employers demanding short-term contracts or freelance work as opposed to permanent contracts of employment. At its best this form of working provides people with flexibility and control as they juggle various commitments in their lives and allows businesses to more easily manage the changing demands of their customers.
For HR teams, however, it provides the headache of classification of whether someone is an independent contractor or a worker. This classification is important as a whole raft of rights are applicable to workers but not to contractors such as minimum wage, holiday pay and working time.
Recent cases have largely favoured a wide interpretation of “worker” with Deliveroo, Uber and Pimlico Plumbers all facing challenges to the classification of their people as independent contractor. The prediction is that this trend will continue and HR teams will need to tighten up their criteria for categorising someone as an independent contractor – erring on the side of caution if there are grey areas.
Good Work Plan
It’s estimated that there are five million self-employed people in the UK, a number that’s set to rise considerably, costing the Treasury £3.5bn in lost tax revenue by 2021. Not surprisingly, the government has moved to regulate this area more tightly and has published its plan for new legislation called the Good Work Plan.
The plan is designed to embrace the benefits of new technology as well as changing societal trends and generally enhances rights of agency workers, those on zero hours contracts and others with atypical working patterns.
As a result, new legislation is planned for April 2019 which increases the maximum penalty for aggravated breaches of employment rights from £5,000 to £20,000. Further legislation is planned for April 2020 impacting the calculation of holiday pay, extension of the right to written particulars to all workers (not just employees) and banning the ability for agency workers to opt out of certain protections (ie, abolition of the Swedish derogation).
Looking further into the future, expect additional proposed legislation to tighten up rights for atypical workers. HR teams are generally being advised to carry out an audit of their workforce and stay well informed on planned changes to their responsibilities.
Gender pay gap visibility is likely to increase as businesses with 250 or more employees will once again be reporting their stats by the end of April (or March for public sector bodies). As this is the second year of reporting comparisons can now be made not only with other businesses but with how well businesses are tackling any issues identified a year ago.
Commentators expect that sanctions may be imposed in the next few years for those businesses showing poor progression towards closing the gap and there will be a greater spotlight on initiatives introduced to tackle this issue.
By 2029 it is anticipated that in areas where there may be a skills shortage, this type of publicly available statistic will be used by recruiters and applicants as a key determinant in applying for new roles.
HR teams who can demonstrate good progress against defined targets are likely to be in a better position to attract new recruits and avoid possible sanctions than those without a plan embedded in the business.
For the first time this year we also have CEO pay ratio reporting. Quoted companies with more than 250 employees have to reveal the ratio between their CEO pay and the pay of their “average” employees and we will start to see those figures released from early 2020. It is entirely possible this requirement will be extended to unquoted companies in the next few years.
There is also the possibility of ethnicity pay reporting, the subject of a recent government consultation, to identify and tackle barriers to create a truly diverse workforce. HR teams considering what 2029 may hold would do well to calculate how these statistics would look in their business. Those that distinguish themselves by innovative incentive schemes and investing in staff at all levels and across all ethnicities are likely to welcome this greater transparency.
Finally, in relation to pay, it’s worth noting that equal pay claims in 2018 saw a staggering 233% increase on claims brought in the previous year bolstered by the claims being brought against the likes of Asda, Tesco and Next. Carrying out an equal pay audit is now an essential item in the risk assessment toolkit of a business and HR teams need to be in the forefront of both identifying the risk and creating the strategy to address it at an early stage.
AI and the B word
The hot topic of artificial intelligence is one that HR teams need to have on their longer term strategic agenda. Generally, commentators agree that the development of an AI-ready workforce will provide a competitive advantage and may even be critical to the survival of a business into the future.
While the screaming headlines may predict a replacement of humans with machines, the truth in the shorter term, at least, is that workers will need to be up-skilled and new roles will be created to make the business AI ready. One area that has already benefited from greater automation is the recruitment process where clearly accusations of bias or discrimination in sifting applicants can less easily be levelled against a computer.
Finally, no crystal ball-gazing exercise would be complete without mention of the dreaded “B” word. At the time of writing we’re still doing the Hokey Cokey with an “in out, in out, shake it all about” Brexit hysteria affecting our august seat of democracy. All that can be said with any certainty is that the HR team that stays well prepared with up-to-date policies, robust engagement practices and transparent incentivisation schemes won’t go far wrong in preparing for employment 2029.
Personnel Today - What challenges will HR face in the next 10 years?