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News in Brief: The Week in HR – HR ‘worst’ of all functions

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Briefcase
Catch up on the week in HR including why CEO’s are turned off by HR, HR’s failure to keep pace in the war for talent, three quarters of HR professionals admit to age discrimination, lack of people skills let line managers down and pay deals sink to new low.



W/C 27/2/06
HR comes ‘bottom’ in popular functions league
HR has been given an emphatic thumbs-down by 555 global senior executives, including 226 Chief Executive Officers. More people rated the performance of HR bad than good in a survey conducted by UK Trade & Investment and the Economist Intelligence Unit.

Thirty-two per cent of respondents rated HR a four or five (where five is poor), compared with 22% for IT, 20% for knowledge management/research and 20% for marketing/sales. Just 27% gave HR a one or two (one being excellent), compared with 37% for IT.
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HR fails to keep pace in war for talent
HR professionals need to identify more creative approaches to talent management in order to stay ahead of the competition.

This is the claim of a new report: HR Landscapes: Defining the future path of talent management, released by HR consultancy, Hewitt Associates.

Nearly 140 organisations were quizzed as part of the research. One of the key findings was the discovery that 60% of companies are already experiencing difficulties in recruiting key talent from traditional sources.

Ninety-two per cent of respondents believe the situation will get progressively worse and that the competition to recruit key talent will be harder in five years time. More than half think there will be a smaller pool from which to recruit employees for key positions. Despite this, only a quarter of companies use predictive workforce planning.

Sharon Mattingly, a member of Hewitt’s senior leadership group for HR Consulting, commented: “Given the intensifying war for key talent, the advantage will lie with companies who use a range of approaches to identify and track key talent in their organisations – and then nurture them. The ability to do this could be a key differentiator in managing next generation talent. HR departments must step up to the challenge and prove their strategic value to the business.”

The research also revealed that next generation talent management has become a strategic priority for more than half of the companies surveyed, with the Executive Board directly involved in driving the planning activity.

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Three quarters of HR professionals admit to age discrimination
Seventy-four per cent of HR workers admit their organisation discriminates, consciously or unconsciously on the grounds of age, according to a new survey.

Law firm Thomas Eggar has also revealed a distinct lack of awareness of the implications of the new laws, due to come into force on 1 October 2006.

Just 14% felt their management team were suitably aware of the issues surrounding age discrimination, a figure that dropped to 7% when questioned whether their workforce were aware of the new Regulations.

Almost half of the respondents (48%) also admitted that they’d made no preparations to date to help them meet the new obligations. While only 7% were confident their internal processes would ensure compliance.

This lack of pro-activity can be partly explained by the fact that as few as 11% feel they have been given enough practical information about the impact of the new laws, said Thomas Eggar.

Nicola Brown, Associate at Thomas Eggar referred to the findings as ‘worrying’ and said she was ‘surprised’ that half of respondents felt the new laws would not make a difference to working practices: “When the new laws come into force they will seek to ensure equal treatment for all employees irrespective of their age, unless an employer can justify different treatment. The Regulations are going to have a dramatic effect on the recruitment processes of most employers.

“The new proposed retirement procedures will also undoubtedly trip up a lot of companies, resulting in claims of automatically unfair dismissal. Whilst currently employees over normal retirement age do not have protection against unfair dismissal this will change with the new Regulations and there will be no upper age limit.”

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Lack of people skills let line managers down
Line managers are either indifferent or reluctant to take on new people-management roles, according to half of all HR practitioners quizzed.

The survey by IRS Employment Review makes the claim despite the findings that six out of ten companies have made line managers responsible for a greater range of people-management responsibilities over the past three years and intend to do so in the future.

IRS researchers also discovered that employers typically appoint new first-line managers because they are good at their current job rather than because they have the communication and leadership skills that will be needed in the new role.

Areas in which line managers feel more comfortable are managing staff absence, dealing with appraisals or training staff. One in four HR practitioners said the line were good at undertaking these matters.

According to the report a lack of training is failing line managers. Eighty-one per cent of companies train new line managers in their people management responsibilities while less than half the HR practitioners questioned (49%) thought the training was adequate.

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Pay deals sink to new low
For the first time in three years, pay increases have fallen below 3%, according to number crunchers, IRS.

Their analysis presents data which shows that pay rises at the start of the 2006 bargaining year stood at around 2.9%.

Two-thirds (64%) of settlements were lower in the same quarter of last year while a quarter were worth more than the previous pay award.

The interquartile range (the middle half of settlements) also moved downwards. Half of all pay deals concluded in the three months to January 2006 are worth between 2.5% and 3%. The interquartile range for the three months to December 2005 was 2.7% to 3.2%, said IRS.

Falling RPI inflation at the end of last year has been cited as a key contributor to the falling rate. Manufacturing pay settlements are following the pattern, awarding a median 2.9% increase. While the service sector is returning a settlement of 3%.

Public and private sector pay deals continue to run in line, both pitched at a median 3% increase in the 12 months to January 2006.

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Tribunal count rises
The number of employment tribunal claims rose last year to 100,203, a figure that compares to the 2004 total of 97,896.

Clare Gunnell, Head of HR Business Compliance at employment law firm, Peninsula said: “The Statutory Disputes Procedures has worked effectively, but what really surprises me is that it was brought in to stop frivolous claims. However, the figure still tops 100,000, and in my experience the number of redundancies last year seemed to have increased. We are advising more employers who have faced redundancy issues, and as a consequence have experienced businesses facing multiple Tribunal claims when employers are falling foul of not following procedures.”

In a warning to businesses, Gunnell said that the Tribunal system is not sympathetic to organisations failing to comply with employment legislation.

“Employees are more aware of their employment rights, and with this being the case, we still find the trend of employees continuing to make litigation claims against their employer for frivolous reasons.”

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Playing it safe fails UK Plc in skills search
Keeping to a rigid set of skills criteria is preventing UK businesses from recruiting top talent.

Recruitment organisation, Executives Online claim that many UK businesses, ‘play it safe’ when sourcing senior management positions out of a fear that challenging this strategy could lose them well recognised skills. According to the survey, this means that innovative thinkers fail the recruitment process, damaging the skills pool in many companies.

Almost two thirds (60%) of organisations quizzed expressed fears that they would not find employees with appropriate experience, and a third said that there was a shortage of good quality executive ability.

See more at: TrainingZONE

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Employers not spooked by national pension scheme.
A new survey explodes the myth that UK businesses would cut their pension contributions after the introduction of a National Pensions Savings Scheme (NPSS).

The survey of almost 1,000 UK employers, by the Chartered Institute of Personnel and Development (CIPD), shows that the vast majority of companies (81%) have no intention of changing their existing pension arrangements in the light of Lord Turner’s Pensions Commission proposals for a compulsory national scheme. Under those proposals, employers would be forced to contribute 3% of salaries to the NPSS for staff who chose to join the scheme. Employees would contribute 5%.

The CIPD survey found that not only will most employers keep up their current contributions, but only 1% will opt for the NPSS to cut costs, and “UK employers are twice as likely to say that the proposed 3% employer contribution towards occupational pensions is too low as say it is too high.”

These findings contradict the assertion made recently by the CBI, in its published response to Lord Turner’s proposals that the compulsory scheme would lead to companies levelling down their contributions.

“Higher take-up rates will increase costs for the majority of employers and many will feel forced to level down their contributions towards 3% in existing schemes,” said the CBI last week. “There is a real risk this figure could become the norm, not the floor, for contributions – and compulsion could provoke a longer term shift away from tailored occupational provision.”

For more on this story see: AccountingWEB

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New starter training could save billions
Poor employee induction processes is costing UK business £2 billion in lost productivity, sapping a valuable skills pool.

According to learning solutions provider Thomson NETg, failing to prepare a new employee can create low morale and productivity and can cost companies billions of pounds in recruitment costs.

Mike Summers, director of Thomson NETg, suggested that by providing basic training for the new employee before the job starts, such costs could be significantly cut.

Outlining company policy and work programmes will enable the recruit to “hit the ground running from day one.”

Commenting on the perceived skills shortage in UK companies, Summers added: “In a climate where specific skills are becoming increasingly hard to find, it makes far more sense to get the induction right the first time, every time.

“A member of staff that doesn’t feel engaged with the business will end up leaving, through resignation or dismissal. This can cost companies much, much more in further recruitment and training.”

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European workers plug UK skills gap
Gaps in the UK labour market have led to over 345,000 eastern and central European workers relocating to Britain since April 2005, according to government figures.

Along with Ireland and Sweden, Britain gave immediate access to eastern Europeans to work in the UK in order to fill job vacancies and improve the nation’s skills pool.

Most migrants were from Poland (204,895), followed by Lithuania (44,715) and Slovakia (36,355).

The Department of Work and Pensions commissioned the study after the number of benefits claimants increased by 90,000 last year, but the report found that migrant workers had not contributed to this rise.

Immigration minister Tony McNulty said the figures, “Vindicated the success of the UK’s policy in opening up our labour market. Accession workers are continuing to go where vacancies exist, helping to fill the gaps in our labour market.”

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Employers offer flexible benefits to retain skills
Employers are increasingly offering a wide selection of benefits to staff in an attempt to recruit and retain professionals with key skills, a study says.

According to research firm Computer Economics, almost half (43%) of the 500 companies surveyed provided a flexible benefits package, compared to 30% in 2004.

More than three quarters (77%) of organisations allowed employees to work from home in 2005, an increase from 63% in the previous year.

Responding to worries that women will not return to work after maternity leave, companies are increasingly offering childcare arrangements to staff. Less than a fifth (19%) provided this option in 2004, but during 2005 this figure leapt to 29%.

Commenting on the research, director at Computer Economics Trevor Morris said: “There has been a significant increase in flexible benefits year on year. Companies realise they need to improve their benefits if they want to be thought of as an employer of choice.”

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Contact centres fail to measure performance
Almost 60% of businesses admit they do not monitor quality and return on investment in their contact centres, a survey claims.

According to the report by the Merchants Global Contact Centre, contact centre outsourcing grew by 20% in 2005, but almost a third (30%) lack executive board involvement and 12% do not know the overall client satisfaction ratings for their organisation.

Paul Scott, business development director at Dimension Data, commented: “It is good news that 70% of management teams are strategically directing their business’ contact centres, but worrying almost a third are not.

“Management teams need to start a proactive campaign of entertainment which demonstrates the contact centre’s strategic value and the way they can enable profitable business growth.”

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IDM rewards top marketing skills
The Institute of Direct Marketing (IDM) has awarded its highest honour to four professionals with ‘exceptional’ marketing skills.

The IDM rewarded the individuals with Honorary Life Fellowships for their contribution to the direct, data and digital marketing profession.

For more on this story see: TrainingZONE

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SSC cooks up skills plan for food industry
The Sector Skills Council (SSC) has unveiled plans to improve skills standards in food and drink manufacturing.

Prepared for January 2007, the Sector Skills Action plan (SSA) will explain how to improve the employability of potential workers in the industry and address the sector’s skills weaknesses to improve performance in the area.

Chief Executive of Improve, the body responsible for co-ordinating efforts to put in place the required additional training, Jack Matthews said: “The SSA will be the live, overarching guide that determines the entire programme of skills development in the sector. The task of devising, managing implementation, and continuously developing the Sector Skills Action plan is without doubt our most important function.”

For more on this story see: TrainingZONE

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Regulation on gender pay gap not the answer, says FSB
Private business pressure group the Forum of Private Business says the Women and Work Commission (WWC) is right to resist union attempts to impose onerous new red tape on small firms to narrow the pay gap.

The FPB supports recommendations in the WWC ‘Shaping a Fairer Future’ report launched this week at Downing Street to improve vocational training for women and steer them away from stereotypical professions.

“Small firms are already sweltering in a pressure cooker of red tape and regulation and the last thing they need is yet more costly regulation,’ said the FPB’s Campaigns Manager Victoria Carson. “Amicus is wrong to demand pay audits that would just be another burden.”

Ms Carson said small firms are crying out for skilled workers to fill jobs.

For more on this story see: AccountingWEB

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Annie Hayes

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