If it were possible to sum up a year in a single word, that word in 2012 might be ‘austerity’ – a word that means many things to many people, but which basically amounts to hard times for great swathes of the population.
In economic terms, austerity refers to a policy of lowering expenditure by reducing levels of welfare benefits and public services in order to cut a fiscal deficit.
And a new phrase was coined to describe its effects – the “squeezed middle”. This is about middle-income families (a key voting constituency) being hit hard by the failure of wages to keep up with inflation – although the situation was even tougher for workers on low incomes or people on benefits, leading to an upping of the ante in areas such as the campaign to introduce a Living Wage.
But it wasn’t all dark – the Queen’s Diamond Jubilee and the Olympic and Paralympic Games provided a brief bit of light relief for many, lifting the spirit of a nation weighed down by seemingly relentless bad news.
Such events didn’t necessarily lift the mood of business, however, where the watchword was ‘caution’. Most employers continued to look for ways to cut costs, introducing pay freezes or offering only marginal pay increases, while also cutting learning and development budgets.
The aim for many was to try and keep afloat and hold onto key personnel in order to ensure that, when the good times rolled again, they had the necessary skills in place to take advantage – although there was an acknowledgement that, if things didn’t start improving soon, more job cuts were inevitable.
Employee engagement
But the impact of previous job cuts and/or recruitment freezes were already taking their toll, meaning that many staff felt overburdened and overworked – but inadequately compensated for their trouble.
While reports of employee dissatisfaction and disillusionment mounted, studies outlining the importance of staff engagement also started to abound.
And the issue doesn’t look likely to drop down the boardroom agenda any time soon as finding ways to increase worker productivity while cutting costs seems set to remain a priority over the coming year.
Research undertaken by the Chartered Institute of Personnel and Development, for instance, revealed that some 58% of workers were at best ‘neutrally engaged’, that is reasonably happy with their job and immediate boss, but failed to put in the extra discretionary effort held up as the gold standard.
Line managers were widely considered to be the lynchpin here, but good relations with colleagues were found to be just as important – as was clear communication in times of trouble (read more here).
Picking up on this mood and building on the work of the Employee Engagement Taskforce, co-chaired by David MacLeod and Nita Clarke, it was, therefore, no surprise that the ‘Engage for Success’ movement was born.
But another key area of concern for both HR and the business over the year ahead will be the skills paradox. While unemployment is forecast to remain high for at least the next couple of years, many employers are also grappling with rising skills shortages and talent wars.
A testing year
The problem is that the majority have two sets of worker populations –top talent that they need to be able to attract and retain, and the rest who amount to a cost.
In terms of the first category, although tier one companies will inevitably see star performers banging on their door, everyone else will either have to find ways of standing out from the crowd or put processes in place to develop existing staff internally – or both (find out more here).
A third major consideration for 2013, however, is how to manage a workforce that is continuing to grow in complexity. At one end of the spectrum, Millennials are starting to enter the workforce – despite record levels of youth unemployment – while, at the other, many workers are finding that they can no longer afford to retire at 65.
But the combination of a difficult economic climate and new legislation has also led to the creation of a more diverse workforce in other ways – in some instances, full-time permanent staff who work 9am-to-5pm are no longer in the majority, being supplemented by growing numbers of contractors, temps, part-time workers, home and flexible workers.
In order to tackle those aforementioned skills shortages and go for growth in tough times, however, it is vital to ensure that the right people are in the right place at the right time – and, although it is early days, an increasingly popular way of doing this is by undertaking effective workforce planning, supported by suitable HR data analytics tools (read more here).
So, all in all, it seems that, once again, HR is in for a testing year that will present both challenges and opportunities. But those that triumph will undoubtedly be able to demonstrate the value that they provide to the business – and faint heart never won fair lady, as they say…..
