FUTURE ISSUES & CHALLENGES IN HRM

1. FUTURE ISSUES & CHALLENGES IN HRM STEPHEN TAYLOR SENIOR LECTURER, UNIVERSITY OF EXETER BUSINESS SCHOOL CHIEF EXAMINER, CIPD

2. “Prediction is difficult. Especially when the predictions relate to the future” Mark Twain “Among all forms of mistake, prophesy is the most gratuitous” George Eliot

3. MAJOR LONG TERM TRENDS Intensified competition Changes in patterns of demand for / supply of skills Fast evolving & changing technologies Individualism & trade union decline Increased affluence & inequality Increased ethical awareness Increased regulation Demographic change

4. COMPETITIVE INTENSITY Major causes: GLOBALISATION – eg: steel & cars TECHNOLOGY – eg: TV & retailing GOVERNMENT ACTION – eg: airlines FINANCIALISATION – eg: banking CONSUMER INFORMATION – eg: insurance CONSUMER CHOOSINESS – eg:: hotels & restaurants

5. IMPLICATIONS FOR HRM • Volatility / unpredictability • Capacity for flexibility • Responsive to change • Limited resources / cost control • HR function has to demonstrate its value • Increased requirement to recruit, retain, engage and motivate good quality people

6. Demand for labour EMPLOYED ECONOMICALLY ACTIVE 1971: 24.6 million 25.6 million 1976: 24.8 million 26.1 million 1981: 24.7 million 27.0 million 1986: 24.7 million 27.8 million 1991: 26.7 million 28.9 million 1996: 26.0 million 28.4 million 2001: 27.6 million 29.1 million 2006: 28.7 million 30.3 million 2011: 29.1 million 30.8 million 2014: 30.8 million 32.8 million

8. Demand for labour Occupation% in 1951% in 1999 Higher professionals: 1.9 6.4 Lower professionals: 4.7 14.9 Employers & proprietors: 5.0 3.4 Managers & administrators: 5.5 15.7 Clerks: 10.7 14.9 Foremen, supervisors & inspectors: 2.6 3.1 Skilled manual: 24.9 12.7 Semi-skilled manual: 31.5 23.0 Unskilled manual: 13.1 5.9

9. Changes in occupations 2000 - 2020 Occupation2000 201020152020 Managers & senior officials: 8.7 9.9 10.6 11.1 Professional occupations: 16.5 19.2 20.1 21.0 Associate professional & technical occupations: 12.2 12.9 13.4 14.0 Administrative & secretarial: 14.0 12.1 11.2 10.3 Skilled trades: 12.9 11.6 11.0 10.3 Caring, leisure & other services: 7.3 8.9 9.1 9.5 Sales & customer services: 8.5 8.6 8.3 8.2 Process, plant & machine operatives: 8.0 6.4 5.9 5.4 Elementary occupations: 11.8 10.4 10.4 10.2

10. Leitch Report - 2006 • By 2020 there will be 2.3 million more jobs • All growth will be focused on higher-skilled occupational groups • Lower skilled jobs will decline in number • 2 million new management jobs • 1 million new professional jobs • 40% of jobs will require a tertiary-level education

11. SKILLS AT WORK IN BRITAIN SURVEY (2012) 1986 – 2006: Jobs requiring no qualifications on entry fell from 38% to 28% (a decrease of 26%) Jobs requiring a degree on entry rose from 10% to 20% (an increase of 100%) 2006 – 2012: Jobs requiring no qualifications on entry fell from 28% to 23% (a decrease of 18%) Jobs requiring a degree on entry rose from 20% to 26% (an increase of 30%) 2020 – on target for 33% graduate employment and 19% no -qualification jobs by 2020

12. Female participation Proportion of UK workforce made up by women: 1952: 30% 2012: 46% Female economic activity rate: 1952: 35% 2012: 71% Male economic activity rate is 83%

15. Supply of labour Total births Average per year 1945 - 1964: 17.6 m 880,000 1965 - 1984: 16.1 m 803,000 1985 – 2004: 14.8 m 738,000

17. Source: Office for National Statistics (2013)

18. Supply of labour Fertility Rates (UN figures – 2008) Macau 0.91 UK: 1.82 Hong Kong 0.97 Thailand: 1.85 South Korea 1.21 France: 1.89 Ukraine 1.22 Iran: 2.04 Poland 1.23 USA 2.05 Singapore 1.26 Japan 1.27 Greece 1.33 Europe: 1.40 Russia 1.34 North America: 1.99 Germany 1.36 Australasia: 2.32 Italy 1.38 Asia: 2.47 Spain 1.41 Latin America 2.55 Canada 1.53 Africa: 4.97 China 1.73 Australia 1.79

19. Leitch Report

20. Leitch Report 5 million people in the UK lack level 1 literacy skills (16%) 15 million people lack level 1 numeracy skills (48%) 6.6 million lack basic numeracy skills (21%)

21. SKILLS IMPROVEMENTS 2006 -2012: The number of UK adults with degrees increased by 2.2 million The proportion of graduates in graduate jobs increased from 69% to 74% The proportion of UK adults with no qualifications fell from 29% to 21%

22. OECD SKILLS OUTLOOK 2013 166,000 adults in 24 countries Problem solving in technology-rich environments (UK is 9th and above average) Literacy (UK is 14th and below average) Numeracy (UK is 16th and below average)

23. OECD SKILLS OUTLOOK 2013 • 16-24 year-olds: • Problem solving (UK is 15th and below average) • Literacy (UK is 21st and well below average) • Numeracy (UK is 19th and well below average) • The UK is the only OECD country with 16-24 year olds who score less well on literacy than 55-65 year olds

24. CONCLUSIONS

25. CONCLUSIONS Key labour markets are likely to tighten considerably over the next ten to twenty years Serious skills shortages are likely to develop and remain for some time As far as HRM is concerned, this will push recruitment and retention issues back to the top of the organisational agenda

26. CONCLUSIONS A Perfect Storm? Key issues for HR managers over the coming two decades: 1) How do we recruit and retain the people we need in an increasingly resource-constrained environment? 2) How do we maintain a capacity for flexibility while also maintaining high levels of motivation among the workforce?

27. FUTURE ISSUES AND CHALLENGES FOR HRM STEPHEN TAYLOR SENIOR LECTURER, UNIVERSITY OF EXETER BUSINESS SCHOOL CHIEF EXAMINER, CIPD

28. Rebooting the Psychological Contract#A20:20Vision Peter Monaghan Acas Area Director, North West 29th June 2015

29. A child of the 60’s

30. Revivals

31. Today

32. Definition …..the perception of the two parties, employer and employee, of what their mutual obligations are towards each other. CIPD 2014

33. The psychological contractThe employee promises to:- • Work Hard • Uphold the company reputation • Maintain high levels of attendance and punctuality • Show loyalty to the organisation • Work extra hours when required • Develop new skills and update old ones • Be flexible, for example, by taking on a colleague’s work • Be courteous to clients and colleagues • Be honest • Come up with new ideas

34. The psychological contractThe employer promises to provide:- • Pay commensurate with performance • Opportunities for training and development • Opportunities for promotion • Recognition for innovation or new ideas • Feedback on performance • Interesting tasks • An attractive benefits package • Respectful treatment • Reasonable job security • A pleasant and safe working environment

35. World of work “stuff” • UK Plc productivity low • Engagement levels need improvement • Trust levels need improvement • Pay levels too low • A trend towards individualisation and away from collectivism • A long trend of scientific, command and control, management practices • Diminished importance of employee relations • Skills shortages and/or lack of investment in training • Levels of happiness / fairness / balance?

36. Young Workers • Twice as likely to be on Zero Hours contracts • More likely to be working in fragmented workplaces • 25% have a degree, also joining the labour market later. • Low pay • Unable to afford property, buy or rent • Living with parents • Difficult to get an “employed” job • Lack of a career • Importance of career capital and social networking • Aspirational impact

37. Older workers • Working longer • Work plus pension flexibility required • No default retirement age • HWWB issues • Performance management issues • Culturally stuck? • Labour market reentry training issues

38. The “middle” • Likely to need to care for elderly relatives so will need flexibility • Childcare, both parents working and/or needing to work • Maternity/Paternity a non gender specific issue? • Recently redundant • Reentry to labour market possibly as Self Employed via “Consultancy” • Career stuck • End of work further away • Morale issues

39. The rebooted psychological contract? The employee promises:- • To work productively (inc to turn up!) • To reciprocate flexibility afforded to them • To reciprocate loyalty shown to them • To provide great customer service • To come up with new ideas • To collaborate positively with colleagues • To commit to their own learning and development • Be honest • Not to do daft things on Social Media channels

40. The rebooted psychological contract? The employer promises to:- • Provide a pleasant, interesting (and safe) place to work • Listen and act upon employee ideas and feedback (eg Voice + Listening + Action = Engagement) • Provide opportunities for employees to collaborate with each other, particularly on an autonomous basis • Provide opportunities for flexible working where possible • Provide the space and support necessary for the employee to learn and develop • Recognise great work (say “thanks” at least!) • Honestly provide “their best” in terms of their pay and job security offer

41. Thoughts and further reading • Acas “call to arms” on Productivity and People Management, see our Website. • Google – “When the French clock off at 6pm, they really mean it.” • Google – Report from the Commission on Management and Leadership – short term, myopic • Get this “stuff” on the strategic business agenda, it impacts on the bottom line. • Google – Why we hate work – New York Times • Look at “Netflix” or “Zappos” • Key words = Variety, flexibility, collaboration, innovation, autonomy, sense of purpose, challenging, new, fresh…less command and control. • What does an “employer of choice” look like?

42. Connect and Contact • Contact • 0161 833 8559 • 07979 704498 • pmonaghan@acas.org.uk • Helpline 0300 123 1100 • Customer Service Team 0300 123 1150 • Connect on LinkedIn • Peter Monaghan • Acas Employment Relations and Advice discussion group • Follow us onTwitter • @monaghanpj • @acasorguk • @Acas_NW

43. 2020 Vision: the Future of People Management What do we know about wellbeing? Professor Carol Atkinson MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance

44. What is wellbeing? ‘Many H&W initiatives treat the symptoms not the cause…… MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance

45. ‘What HR professionals need to decide is whether health and wellbeing is about providing lettuce for lunch or about far less obvious but potentially more effective things,’ says David Batman, group medical officer, Nestlé UK. ‘Simply giving staff more autonomy in their jobs will reduce the level of stress they suffer. This impacts blood pressure and heart conditions. To me, just giving people the opportunity to do their job will have a far more significant impact on the health of a company’s employees than persuading them to give up smoking and eating more healthily in the staff canteen.’ ‘Old-style wellbeing is like walking downstream of a river, rescuing employees who are flailing around in the water, needing saving,’ says Margaret Samuel, chief medical officer at EDF Energy. ‘What we need to do is turn around and walk upstream to find out why so many of these employees are ending up in the water in the first place; we need to find the source of the emergency.’ Torrington et al. (2014) MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance

46. A more holistic understanding of wellbeing Happiness, relationships and health (Van de Voorde et al., 2012) Creating an environment to promote a state of contentment which allows an employee to flourish and achieve their full potential for the benefit of themselves and their organization (CIPD, 2007: 4) Altruistic or business case? HRM, wellbeing and performance links (Peccei et al., 2012) MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance

47. Subjective wellbeing – ‘happiness’ ‘CEO raises minimum wage to $70k after reading study on workplace happiness: ‘emotional well-being rises with income, but only to a point. And that point turns out to be about $75,000 a year.’ (see also Kahneman and Deighton, 2010) So: pay only takes us so far Job design is also important And flexible working (Atkinson and Hall, 2011) MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance

48. Relationships: authenticity Authenticity: being true to yourself Are you yourself at work? Are you different at work and home? How comfortable are you about this? Being true to yourself is (probably) more important than behaving differently across roles MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance

49. Impact of authenticity Dr Anna Sutton, Dr Ben Lupton, Prof Carol Atkinson • Being more authentic is related to greater well-being and higher levels of engagement • Greater well-being is related to higher levels of engagement • Personality plays a role, but most of the relationships hold for people with different personalities MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance

50. Implications for organisations What can organisations do to increase the feelings of authenticity amongst their employees? Empowerment, autonomy Values-based recruitment, management Important role of supporting effective relationships MMU Business School, Centre for People and Performance MMU Business School, Centre for People and Performance