Key Area 1 – Labour Market
Unemployment in the UK is at its lowest since the 1970s, currently sitting at 4%, however, despite this, economists expect this to put some upward pressure on real wages. Real wage growth has been poor in the UK since 2008. In the UK there has been some growth as we have come out of recession, but this is still at a level much lower than expected. So why is this? Why are employees seemingly unable to negotiate higher wages even though employment rates are so high? The answer is not straight forward. Ultimately it is productivity growth that drives wage growth, and since 2008, input in the UK has been low. In fact the UK’s productivity growth has been the second lowest of all the G7 nations, ahead of only Japan.
NB: Updated stats can be found here – https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment
There are many reasons for this poor performance. One reason, according to labour statistics, is that employers are focussing more on new employees than they are investing in existing people. The rise in self-employment and the “gig economy” have also impacted on the downturn in productivity. During the recession there was a huge rise in self-employed workers and although the numbers of people registered as self-employed has fallen, the numbers are currently still higher than previously expected, leading to what is known as a tight labour market. A tight labour market refers to a period of high demand, meaning the ratio of candidates to jobs is low. A tight labour market means that it is a “sellers” or candidate market, meaning that there is a push for higher wages and better conditions, in a tight market employers have very little room for negotiation as other candidates may prove difficult to source. A loose labour market is a buyer’s or employer’s market, during these periods, organizations have large numbers of potential and employees to hire for positions.
Over in the US, their labour shortage is approaching epidemic levels, and employers could end up paying the price for this, as they try to offer higher wages to entice employees to join their organisations. Further uncertainty around Brexit is affecting the labour market in the UK as employers are worried about the status of some of their workforce, this will only worsen as we get ever closer to March 29th The same cannot be said for the rest of the Eurozone countries, wage growth across Europe has hit 2 per cent, the best since 2013.
NB. Updated report: ‘What Does A Worker Want? What The Labor Shortage Really Tells Us‘
This impetus for businesses to do things differently has created a window for policymakers to step in too. Over in Japan, Prime Minister Shinzo Abe has pushed through legislation to tackle the long-working-hours culture and address the imbalance between regular and non-regular staff. Unemployment in Japan is just 2.2 per cent and the ratio of open jobs to applicants is at its highest since 1974.
Key Area 2 – Recruitment and Selection
One of the biggest recruitment challenges for the Together Trust is the recruitment of well-qualified talent, this, coupled with the fact that the skills needed for jobs within our organisation are changing and evolving, which means these challenges will only increase over the next 3-5 years.
Recent research has found that almost all organisations experience recruitment difficulties in the last year with 1 in 10 experiencing recruitment problems when looking to recruit low skilled staff. These challenges will only increase as we cut from the EU in March, with organisations already slowing down their recruitment as uncertainty around job growth, grows.
So in the climate of uncertainty how do employers position themselves strategically? There are many ways that organisations can do this, for instance by strengthening recruitment methods to embrace the evolving technologies; by focusing on employer brand, helping them to position themselves as an employer of choice; helping to create a positive candidate experience and offering a good selection of rewards and benefits.
Recruitment involves making crucial decisions. When recruiting we are aiming to attend and select people who meet our requirements. Whether they are from inside or outside the organisation. Both the individual and the organisation benefit from good recruitment practice.
- Good practices become part of the culture and help the branding of the organisation within the local area.
- Working out the sort of person you want means you can brief agencies clearly or produce advertisements pitched at the candidates you are looking for
- Having a well planned and rigorous selection process means you can have confidence in your predictions
- Good recruitment practices are more likely to result in employees with the skills and potential that is required
- Good recruitment practices ensure that bias is avoided in gender or race, meaning that employees will represent the diverse nature of society, meaning that our employer profile matches our customer profile.
Employers must comply with equal opportunities legislation, throughout the recruitment process, ensuring the candidates are judged fairly and that the job description and person specification are inclusive. These are just some of the reasons why good recruitment practices are important, but what are the tools and techniques we should use to get the benefits
Job descriptions, person specifications and competency frameworks are opportunities for employers to identify the personal attributes they are looking for in potential candidates. There are many benefits to defining personal attributes of potential new employees:
- It gives confidence to new potential employees in the organisation as they will feel that the recruitment process has been well-handled
- The person will have a feeling of self-worth and be more confident and motivated, if the recruitment is conducted professionally
- Lack of bias and discrimination inherent in good recruitment means the individual has equality of opportunity
There are 4 stages to recruitment
1. Specify what you need
2. Source the candidate
3. Select the best person
4. Offer
Recruitment is one of the most important aspects of business. This is because an organisation is defined by its employees.
Having brilliant or average employees, can make or break a business. To build a strong team, employers have to know how to hire the right people to the right role. Good recruitment starts with the production of a good job description (appendix 2). A good job description helps employers specify and the applicants identify, what the job holder is required to do and to what standard. Employers can then think about the competencies we want them to possess, in order to do the job and specify what type of person they want. In order to attract and retain the right talent to a job, employers firstly have to make sure that the pay and benefits package is competitive, but we also need to consider how the correct method of advertising for jobs will match with the most suitable candidates
Fig 1, is an example of our competency framework that has been designed to help us to identify current and future skills gaps and needs within our organisations structure. The importance of leadership to the future of our organisation, makes it vital that this competency framework has practical applicability. I have based our framework on a model of Strategic Management which is widely used to help shape organisational and leadership effectiveness across many different sectors, and the National Skills Academy, Leadership Qualities Framework
This competency framework sets out, in a clear and accessible way, the competencies required for effective leadership. It describes the qualities exhibited by successful leaders, and how the values and behaviours of effective leaders play out at each level within the organisation. This framework is also designed to reflect the diversity of our organisation, with its many different structures, titles and roles.
Taken as a whole, our competency framework, provides individuals and services with a benchmark against which to measure their current capability and to create targeted development plans. This competency framework will allow us to identify suitable candidates to fulfil the roles within my customer service team, allocating the relevant people and skills sets across the different levels of responsibility required.
Person Specification
Appendix 1 shows an example of a person specification, focussed towards the role of Customer Service Assistant. A person specification allows organisations to set the standard for any given role, in this case Customer Service Assistant, through which to assess any candidates that apply for the role. Person specifications allow for a standardised recruitment process to take place, with all candidates being judged based on the same set of criteria. To prepare a person specification, an employer needs to recognise and understand the knowledge, skills and behaviour needed for a particular role and the skill set required to fill the vacancy. By assigning a person specification to each of the roles within the team it allows employers to ensure that there is a suitable spread of skills across the team.
There are many different ways of advertising for candidates, these include advertising on the internet, in newspapers, agencies and job centres, as well as approaching existing employees for personal recommendations. Newspaper advertising is very costly, so employers need to ensure that expenditure is commensurate with the level of the post. For example, an advertisement for a HR Director of a large organisation warrants placement in a Sunday newspaper or the recruitment supplement of a quality daily newspaper. Public sector organisations and firms with strong local roots often adopt a policy of placing recruitment advertisements, in the local press. This also applies to advertisements for senior posts which are advertised nationally. Professional or trade journals have the advantage of attracting the right kind of applicant in terms of qualifications and experience. This disadvantage with this source, is the delay between submitting the request and the date of publication.
The immediacy of the internet obviates this delay, but the cost effectiveness of the on-line recruiting has not yet been properly evaluated. Many individuals in all professions and trades have yet to familiarise themselves with the internet and others, who are skilled users, prefer different media.
When structuring an advertisement, employers should ensure that the advertisement contains the necessary information to secure the attention of their target audience, so to secure their attention and interest. The design, layout and content must therefore be carefully considered, the text including the following elements:
- A clear word picture of the ideal candidate
- An encapsulation of the demands of the position and the attributes of the person
- A named contact and telephone number for informal enquiries
- Details of the procedure for application
- If necessary, the means of obtaining further details
Another common selection method is interview, these can take many forms, including 1-2-1, panel or group. Group exercises can be used to test how candidates interact with each other, these sort of tests can give a good indication of how an individual may interact in the workplace. Whatever the method of selection used, they must be relevant to the job applied for and use consistently across all candidates.
There are many ways to ensuring employee retention
Provide opportunities to grow, learn and develop, and let your employees know there is room for advancement in your company. Providing effective training opportunities is a great way to improve retention and reward employees. For this to be effective, training must be relevant to an individuals job, develop appropriate skills and knowledge and be suited to an individuals learning style. There are many different ways to identify training needs, for instance using a role profile to identify the skills and knowledge required to do a job and the individuals current level of skills and knowledge. For a more detailed analysis of an organisations training needs, we would complete a training needs analysis.
Skills and knowledge are required to do a job a job competently, comparing the requirements of a job, with an individuals current level of skills and knowledge to identify opportunities. Some organisations spend a great deal of time and effort on training which:
- Is irrelevant to individuals jobs
- Fails to develop the appropriate skills and knowledge
- Is unsuited to individuals learning styles
To identify an individuals needs, employers must identify two things: the skills and knowledge required to do the job competently; and the individuals current level of skills. Comparing these will reveal gaps or areas of development, where individuals must develop.
Rewarding employees is another way organisations can ensure a good level of retention….
Key Area 3 – Talent Planning
Skills growth is vital to future growth, both for organisations and for employers, a skilled workforce is necessary to stimulate growth that in turn brings new jobs for people all over the UK. A strong education and skills system is key to this, especially in terms of social mobility, supporting people from different backgrounds to succeed in industries that previously wouldn’t have been offered to them. It is the role of government, and others to ensure that these skills gaps are filled and that the needs of industry are met.
There are a number of government initiatives that are available to support people to find work, as well as, to prosper and develop within employment. One such initiative aimed at the unemployed is, sector based work academies. These are training programmes run and supported by DWP, through employers, Job Centres and private sector providers. These academies, often described as a targeted intervention, often take the form of a short training programme, consisting of industry specific training, mixed with elements of employability and soft skills training. Dependent on local or national labour needs the industry these programmes are aimed at, can differ. In Greater Manchester, there are current labour shortages within logistics, customer service and health and social care, meaning that the programmes on offer within my region often take one of these routes. Generally these programmes are a success, yielding high success rates for the providers and JCP, for the employers these programmes offer an opportunities for them to access cohorts of candidates that historically may not have applied for roles within the sector, also for employers, as they will often dictate the specific requirements of the training, they can ensure that the candidates that they are then given, have the skills and competencies that are more aligned with the organisations needs.
Employers, also have a role to play in the stimulation of future skills. Employers should take a proactive stance on the development of their employees as well as the organisation itself. There are a number of different ways an employer can do this, training, which is the more traditional way of ensuring that employees have the skills the organisation will need in the future, is becoming more and more of a focus within organisations. Indeed in my organisation over the last 18 months, L&D have stepped out of the shadow of HR and become a standalone department within the Together Trust. This has allowed us to increase the visibility and helped to give us our own identity within the organisation. Training though, is not the only way organisations can stimulate future skills. Effective monitoring of performance is a great way to develop skills, using the performance management processes of reviews and appraisals employers enables employers to listen to their employees and understand what it is they need to be able to support the constant diversification of the organisation.
It will be the role of trade unions to support all of the above and ensure that their members are accessing the opportunities afforded to them. Statistics show that union membership is down in the UK, certainly compared to 30 years ago, as to is the number of employers who actively recognise unions within their workplace.
Succession planning ensures that as far as possible, suitable employees are able to fill vacancies. As well as also ensuring that a pool of suitable people are available to fill appointments that may be established in the future. Through the use of career development plans, employers can identify future gaps and potential candidates to fill them. Career development plans are designed to identify the competencies that reflect the strategic priorities of the organisation. Individuals can then be measured against these competencies using appraisals and supervisions. Career development plans can include lengthy courses of study or additional practical work.
Equal opportunities legislation affects promotion and training, so employers have to ensure that succession planning processes are fair. An effective succession plan should be aimed at both the short and long term. Succession planning is linked to a number of other HR processes, such as, appraisals, career planning, training, coaching and mentoring, but must always be linked to the objectives of the organisation.
Employees choose to leave organisations for many different reasons, for instance, redundancy; retirement; a lack of training opportunities; better pay and reward; breakdown in relationships, there also will be employees who leave an organisation through dismissal.
Dismissal is when you end an employee’s contract. For a dismissal to be considered ‘fair’ you must have valid reason for removing them. For example, if you take on an employee to provide temporary maternity cover and dismiss them when the cover ends. The dismissal is fair if you made it clear at the start of the placement that the job was only temporary. Valid reasons also include; the employees capability or conduct, redundancy or a legal reason preventing them being able to do their job, like a driver losing their driving licence. You can’t dismiss someone because they make a terrible cup of tea. That would be unfair dismissal.
Even if you have a fair reason, the dismissal is only considered fair if you act reasonably during the dismissal and disciplinary process. Although there is no legal definition for ‘reasonableness’ an industrial tribunal would consider whether you:
- Followed relevant procedures
- Carried out proper investigations
- Allowed the employee to be accompanied at disciplinary hearings
Disciplinary rules and procedures must be set out in writing – if you don’t, a tribunal can order you to pay an employee compensation.
Even if you have acted reasonably, some reasons for dismissal are classed as automatically unfair: If a tribunal finds that you dismissed an employee unfairly you might be ordered to reinstate them or re-engage them. You might also have to pay compensation.
- Pregnancy, including all reasons relating to maternity
- Family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants
- Acting as an employee representative
- Acting as a trade union representative
- Acting as an occupational pension scheme trustee
- Joining or not joining a trade union
- Being a part-time or fixed-term employee
- Discrimination, including protection against obdurate discrimination on the grounds of age, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation (in Northern Ireland, this also includes political beliefs)
- Pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage
- Whistleblowing
If a tribunal finds that you dismissed an employee unfairly you might be ordered to reinstate them or re-engage them. You might also have to pay compensation.
13.1.2019