HR consultant Quentin Colborn presents his thoughts on what 2005 will bring to the HR environment.

I suspect we will see the year dominated by a number of issues including:

Election – all the pundits are predicting a 2005 May election. What impact will this have on people-related issues? Family matters appear to be rising quickly up the political agenda with extensions to rights for parents to take time off work for childcare. Likely to be a popular measure, I can envisage this being on the manifesto of all the major parties. Those who are more farsighted may also consider eldercare to be an issue for the voters. As the demographics change this will rise in the national consciousness.

It will also be interesting to see the parties’ position on taxation. Many would agree with the view that taxes will rise in one form or another – but what’s the impact on HR? In an environment where pay rises in a range of 2-4% are standard, any increase in tax could lead to upward pressure on wage rates and given the tightness of the labour market this may be difficult to resist.

Demographics – many will get fed up with this topic being trotted out at regular intervals, but it is an issue that will not go away. The shift towards an ageing population means there will be greater demand for staff in the care sector along with fewer candidates taking up apprenticeships in traditional environments (ever tried to get a plumber?).

There are few signs of any significant changes in unemployment levels and so a major challenge for HR departments will be to look at innovative ways to get more people back into the labour market. While legislation has its part to play, we may also see the market enforcing a new look at unfair discrimination in areas that include age and disability.

Loyalty and talent – who is calling the tune in the labour market today? The challenge for employers is to attract and retain talent, not a new message and not one that will disappear in the near future. The feedback I am getting is that brand loyalty for products is gradually diminishing and being replaced by ‘deal-savvy’ consumers.

So why won’t this happen in the employment market? The task for the HR professional is to ensure that their employer offers the best ‘deal’ to the workforce. This does not always come in monetary terms, non-financial benefits are growing in perceived value and I believe we will see a growth in areas including financial advice for employees and the provision of Employee Assistance programmes.

Retaining talent will not just be about salary and benefits either. The best businesses will also be concerned with style of management and the provision of opportunities for personal development. Businesses working within regulated environments are already very familiar with the concept of training logs for staff; it may well be the case that in the future we see an upsurge in employee-led demand for training and an increasing desire from employees to maintain their marketability. More Trade Unions are placing training on their negotiations agenda than ever before.

Absence – with labour increasingly expensive and difficult to attract, employers will start to look at ways to maximise time spent at work. I suspect this will come from a couple of angles. Firstly, there will be a greater focus on managing absence, indeed I am aware of a number of organisations currently developing outsourced absence management systems to support businesses that want to take action in this area.

Secondly, more businesses will need to take a hard look at themselves and question why their rate of absence is significantly higher than others. While the nature of work will always be related to absence levels, management style has a huge part to play too. It needs brave HR leaders to continue to raise the issues and grow awareness that this is not just an employee matter.

Legal matters – these will continue to provide challenges for businesses in 2005. Without intending to be a legal calendar, major changes in the year will include the Freedom of Information Act, Information and Consultation, TUPE will change again and there will be more detail on age discrimination.

The farsighted employer will already be thinking about the impact of age discrimination on their business. For one thing it will make employers focus on the issue of capability more so than ever before, the retention of staff past a notional retirement age (65?) is likely to need referral to a clear and sensitive approach to capability issues and performance management. Yet given the shortage of skilled staff how much will we see good commercial practice actually being one step ahead of legislation?

It will be interesting to see how the new grievance and dismissal procedures impact on Tribunal cases. I have a feeling that while the new regulations will reduce the number of potential claims this will be counterbalanced by the increasing number of people keen to assert their rights – in some cases perhaps because their employers have not followed the new regulations.

We can confidently predict that it will be far from quiet on the HR front next year. The challenge is clear. HR must show its professionalism to lead businesses in applying even better people management techniques.

Happy Christmas!

The author of this article, Quentin Colborn, has been a regular contributor to HRZone over the past year. Colborn is an independent HR consultant, further details can be found at www.qcpeople.co.uk

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