It’s been difficult for the HR industry to keep pace with the multitude of employment law changes this year – a situation compounded by the turbulent economic situation in Europe.
The UK Government’s reference to ”six years of austerity” was no empty threat and businesses are continuing to make redundancies, undertake restructuring and redeploy staff as a result. But while unemployment rates soar, talent gaps also continue to exist.
Forecasts from the Office for Budget Responsibility suggest that a huge 2.8 million people – many of whom are aged between 16 and 24 – will be out of work in 2012, some 200,000 more than forecast in 2011. And such a scenario is only likely to result in companies being even more inundated with job applications than they already are.
The Government’s proposed relaxation of employment law to enable employers to lay off workers more easily was welcomed by the Confederation of British Industry. But the flipside of this legislative coin was the introduction of the European Union’s controversial Agency Worker Regulations, which were brought in unchanged.
The new rules, which came into force on 1 October 2011, require temporary workers to receive the same pay and benefits as their permanent colleagues after they have worked for a given employer for more than 12 weeks. But they have so far resulted in a slew of contracts being re-written as well as agency workers being asked to sign away their rights despite the legislation.
Undoubtedly, however, 2012 will likewise bring with it a series of challenges that HR directors will have to navigate. A key theme will be aligning people and business strategies in order to accelerate business competitiveness and performance.
The ‘doing more with less’ mantra will continue to prevail and it will become more important than ever to ensure that staff remain motivated and engaged in order to boost business performance as the economic clouds darken.
Moreover, as the first of the baby boom generation starts to retire, HRDs must ensure that there is a leadership pipeline in place and that diversity policies are truly helping to bring in the most effective talent for addressing today and tomorrow’s work challenges.
During 2012, we expect to see four broad trends that will reach a tipping point:
1. Talent acquisition + talent mobility = talent success
Over the year ahead, it will be important for HRDs to broaden their thinking beyond traditional means of acquiring and retaining talent. Programmes will need to be strategically aligned with business requirements and, now more than ever, HRDs will have to work alongside senior leaders to forecast and model the future shape of the organisation and the talent it will require to cope with changing market conditions.
We will also increasingly see companies hiring key talent that is able and willing to be more internationally mobile in order to help them solve their global business problems in a more integrated way. Some forward-thinking companies have already started to go down this route.
A question to think about in this context, meanwhile, was one raised by Bersin & Associates in its latest report entitled Strategic Human Resources and Talent Management: Predictions for 2012.
The researcher askedwhy it should be that the teams who recruit externally are not routinely tightly integrated with those that build internal career models and performance appraisal tools? Such an holistic approach to talent is likely to become increasingly common in the future, however, it believes.
Bersin & Associates also pointed out that a good number of hiring tools such as pre-hire simulations, video interviews and social networking could now also be used to the benefit other areas of talent management.
2. Analytics software becomes the HR director’s strategic weapon
As corporate budgets continue to tighten, it will become increasingly important for HR directors to take a strategic view of people management in order to provide greater value to the board.
As a result, they will be expected to have a much firmer handle on metrics and be able to use analytics tools for activities such as recruitment, facilitating talent mobility and predicting the future leadership potential of individuals as well as their capabilities.
Such software can also help to answer questions about whether the company currently has the right skills in place to shift the direction of the business, whether it is attracting the right candidates and/or at what stage it is losing the best ones.
While a 2010 report entitled Analytics: The New Path to Value found that the top-performing organisations used analytics offerings five times more than lower performing ones, 2012 will be the year that HR directors put such theory into practice.
3. The rise of social media
Although social media was on the rise in 2011, many HR departments tended to use such channels on only a sporadic, ad hoc basis rather than as part of a wider social media strategy, which included recruitment. In 2012, however, the focus will be on ensuring that employer brands and social media strategies are integrated and defined, not least in order to attract the right type of job candidates.
As Josh Bersin said in his 2012 predictions: ‘Rather than building an employment funnel, we need to build an employment tunnel.” In other words, if you communicate effectively about the company and its values, a ‘tunnel’ of suitable people will be created who know about it, like what it stands for and consequently would like to join.
This means that HR departments would be well advised to collaborate with social media and marketing functions in order to help communicate and build a successful employer brand.
4. The need for diversity
Diversity in terms of, not just gender, but also age and ethnicity, will become an increasingly important theme over the year ahead. This is not least because, in a globalised economy, firms need to ensure that their workforce is representative of the markets in which they operate.
On the issue of the gender glass ceiling, meanwhile, the EU’s justice commissioner, Viviane Reding, has said that she wants to see the boards of European companies comprise 30% women by 2015 and 40% by 2020 compared with today’s paltry 10%.
By March 2012, the European Commission has said it “will assess whether there has been significant progress” and whether ‘credible’ self-regulatory initiatives have been developed to boost female participation. If not, it will consider proposing EU legislation on the issue.
New laws aside, however, the introduction of more gender-balanced boardrooms will be a matter of strategic importance. According to the Department for Business, Innovation and Skills and its report entitled ‘Women on Boards’, companies with higher levels of senior female representation outperformed their rivals, generating a 42% higher sales return, a 66% better return on invested capital and a 53% higher return on equity.
Because diversity contributes to the introduction of new ideas, debate and innovation that can help shake up the status quo, it is likely to be a key contributor to whether companies survive and thrive into 2012 and beyond.
Nikki Hall is chief HR officer at talent management software and services provider, SHL.
One Response
HR industry
It is very difficult for the HR industry because the industry itself is suffering from great financial crisis. Actually, no industry can escape. Big or small business is affected by economic turmoil reason why a lot of people are subject to lay off. An example is Sony. Sony has long been one of the most important corporations in customer electronics. However, the business has been posting enormous losses for the past four years running, most recently projecting a $2.7 billion loss. The company is restructuring and will fire 10,000 employees. You can read more here: 10K workers to get pink slips in Sony layoffs.