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In most areas of business these days, results are everything. As long as processes are proven to be effective and yield the right outcomes, everything in the garden is rosy.
Yet while efficiency and effectiveness are inextricably linked, it doesn’t always follow that an effective HR department is an efficient one.
It’s highly likely that you’re already monitoring the effectiveness of your HR and recruitment teams, most probably in terms of KPIs like ‘cost per hire’ and ‘employee churn’.
But it’s also vital to put some measures in place to help you track the efficiency of your HR service delivery – ensuring that those positive outcomes are being reached in the slickest and streamlined manner possible.
Here are a few metrics to keep an eye on…
1. Self-service resolution rate
All too often, the bulk of HR’s time is consumed by the administration – completing simple yet relentlessly repetitive tasks, or answering the same employee queries ad infinitum.
Naturally, this limits the time your HR teams can spend on the added-value activity.
The key to reducing that administrative workload is to automate routine tasks wherever possible and provide self-service solutions that enable your employees to get their answers or complete their actions without impinging on HR time.
Monitoring the percentage of enquiries resolved in this way (the ‘self-service resolution rate’) is a great indicator of your department’s efficiency. After all, the more questions that can be answered via a self-service knowledge base, the fewer questions your HR team have to field.
Add things like holiday requests to the self-service functionality on offer, and you’ll further reduce the administrative burden on your teams. Not only that, you’ll find you increase employee satisfaction at the same time.
Growing up with supermarket self-checkouts and train ticket machines means millennials in particular (who now represent a significant proportion of the workforce), have come to expect and even prefer the immediate nature of self-service in the workplace.
The more actions they can complete independently without involving HR, the happier they’ll be – which can only be good for business.
2. First contact resolution rate
However sophisticated your self-service portals, however, detailed your knowledge base, you’ll never fully replace the need for direct communication between employees and HR – nor would you want to.
What you do want to do however is ensure that the majority of queries or concerns that do require manual intervention are dealt with at the first port of call. This is typically referred to as First Contact Resolution.
In a statistical sense, First Contact Resolution is the percentage of requests that are resolved immediately on receipt without being passed on – the higher the figure, the more efficient your department.
Anything that has to be parked and revisited later (or escalated to an HR business partner), means incurring additional time and costs – and risks the frustration of the employee who is forced to wait too long for an answer.
3. Second line resolution rate
Sometimes, of course, it is entirely necessary for employee queries to be escalated or deferred to a subject matter expert – for example, a learning and development specialist.
If this ‘second line resolution’ is happening more often than not though, it might indicate some efficiency issues with your HR department – so it’s vital that you monitor how many queries are being dealt with in this way.
It could illustrate that first-line staff aren’t adequately trained or don’t have the knowledge required to handle a particular type of employee query. This is simple enough to overcome with some basic training.
Equally though, it could be a failing of your processes – whereby overly complex queries are being routed towards the wrong people. In this case, it would be more prudent to re-evaluate your routing procedures, in order to ensure the most challenging queries reach relevant subject matter experts in the first instance.
4. SLA attainment rate
A combined measure of both efficiency and effectiveness, your SLA (service level agreement) record plays a fundamental role in shaping the reputation of your department.
If you’re not meeting your own target response times, your SLAs are barely worth the paper they’re written on – and you’ll quickly lose credibility with employees.
Equally, if you’re not setting SLAs at all, it becomes difficult to manage the response-time expectations of the workforce, and harder to measure the speed and consistency of your delivery.
Make sure you’re setting SLAs that can work for both HR and the workforce, and that align with the needs and priorities of your business as a whole.
5. Employee Satisfaction – the ultimate goal
One of the ultimate measures of HR efficiency is the satisfaction of the wider workforce.
Swift resolutions with a few touch points as possible leave employees feeling engaged, informed and supported – and play a key part in delivering a positive employee experience.
The good news is that monitoring and measuring employee satisfaction has never been easier. The long-winded questionnaires of old are out, and new tech-driven pulse surveys are in – inviting staff to share their mood on a regular basis at the click of a button.
This instant, real-time feedback enables your HR team to assess staff satisfaction on both a short-term and long-term basis and to respond in a timely fashion when morale appears low.
Monitoring the efficiency of your HR service is every bit as important as measuring effectiveness – and can help pinpoint improvements that will help reduce the department’s admin burden.
Embracing today’s technology (whether it’s in the form of self-service HR portals, analytical dashboards or pulse surveys) is central to this, enabling you to deliver an increasingly efficient service that responds to the needs of a progressively digital-savvy workforce.
Each new year heralds a fresh start for every business and provides an opportune moment for HR leaders to take stock of the rapidly changing work environment.
From the rise of the Millennial and Generation Z workforce to the increasing proliferation of freelancers and ‘gig’ workers, a number of employment trends have transformed the workplace in recent years.
Add technology developments into the mix, and it seems the goalposts are moving on a near daily basis – all of which makes it essential for HR departments to adapt, modernise HR and move with the times.
Traditional HR models are fast becoming outdated. Traditionally seen as an admin-centric function with limited input into business strategy and growth, today expectations on HR are much greater. Now leadership is looking to HR to lead the delivery of an engaging employee experience that helps to attract and retain top talent.
As we see it, there are broadly five areas HR leaders can look at to mould and modernise HR in order for the function to meet these changing demands.
1 Capitalising on the gig economy
The ‘gig economy’ has been on the rise for years, and the trend towards short-term, zero-hours working shows no sign of relenting.
The fact is that most organisations will increasingly rely on sources of talent beyond their full-time employees – from contingent workers to consultants, freelancers, contractors and so on. It is expected that these workers will account for nearly half of the average company’s workforce in the next few years.
The benefits of a temporary workforce are clear – fewer obligations in terms of holiday and sick pay, the ability to scale up or down rapidly and resource key projects quickly. However, making the most of the gig economy trend means adapting your HR department to meet the needs of this flexible workforce.
You’ll need to be right on the top of the rules and regulations surrounding temporary workers. Some gig economy workers (including couriers) are classified differently to others and are entitled to certain benefits in spite of their zero-hours status. Recent changes to IR35 will also have big implications, with the onus now on the employer to classify contract workers correctly for tax purposes.
Managing this type of workforce arguably moves HR towards a more procurement-style operation, which is highly efficient and able to ‘buy-in’ talent, much like the organisation already procures other goods and services. This means adapting HR processes to the way temporary workers are requisitioned, sourced, onboard, integrated and remunerated.
For many HR teams, this will be a significant step change from managing traditional employees. Undoubtedly, it will require the right systems to ensure you can cope with what will need to be a much more agile HR operation.
2 Reducing admin through automation
The administrative burden of HR is well documented – but that’s not to say it should be an accepted norm.
If your department is still heavily reliant on manual, paper-based processes, it’s time to turn to technology, building in automation and self-service to relieve the pressure on your team.
For instance, introducing a simple online knowledge base would be a good starting point, to help employees find their own answers to your most frequently asked questions. Automating time-off requests and enabling employees to update their own personal details would further reduce your admin time.
The concept of automation is certainly not new, yet so many HR departments have only scratched the surface in terms what can be automated. Automation isn’t here to replace HR – it simply frees you up to play a more proactive role in the business and meet the rising expectations, highlighted earlier in this post.
Like it or loathe it, we’re living in the age of Big Data – and the most modern, progressive HR departments out there are using that to their significant advantage.
There will always be a place for intuition, empathy and perceptiveness in HR, but increasingly, businesses are looking to back up their people decisions with cold, hard facts.
That means implementing people analytical solutions, capable of leveraging individual and collective employee data to reveal detailed insights on the behavioural trends of the workforce.
For example, today’s predictive analytics make it possible to calculate employee flight risk – using machine-learning technology to analyse and identify trends in the employee record that could point to an early departure. This early warning could be the difference between retaining your star performers or losing them.
When it comes to analytics, you should never run before you can walk. Start in a realistic place, likely around reporting and KPIs, and then build step-by-step. Our comprehensive guide, ‘How to get started with HR analytics’ is a useful resource that shows you how to develop your reporting and analytics capability incrementally over time.
4 Embracing flexible working
Thanks to cloud-based collaboration tools, video conferencing facilities and increasingly sophisticated mobile devices, it’s never been easier to work away from the office – so don’t expect the clamour for flexible working to die down any time soon.
The trend for flexible working (whereby employees work at least part of their week from home), looks only set to increase in 2019 – to modernise HR teams, you should be at the forefront of embracing this change.
There’s still some resistance from traditional business leaders, many of whom hold archaic views on the concept of working from home and associate the practice with a lack of productivity. Here is where HR should start – to first convince the flexible working ‘haters’ that it really can have a major positive impact. But more importantly, you need to make leadership more aware of the negative impact of inflexible working, such as non-productive stress and a disengaged workforce.
Encouraging and embracing flexible working is just one way in which a business can help its employees feel valued and trusted – and the best-performing HR departments recognise the importance of delivering those positive emotions.
A content, motivated and engaged workforce can have a huge impact on your bottom line, so as you seek to modernise HR services, you should be looking at the small tweaks you can make to help put smiles on faces.
Slick and smooth onboarding procedures can help here. So too can performance reviews that actually take place, and swift, painless holiday requests that don’t take weeks to approve.
Remember, now more than ever, you’re facing fierce competition for top talent – and review sites like GlassDoor are making the employee experience a key factor in promoting your organisation to potential applicants.
It’s no longer just about how well you pay – it’s about how supported, respected and engaged your members of staff feel.
There’s now more competition in the jobs market than ever – but it’s employers, not just candidates, who are competing to stand out from the crowd.
June 2018 saw a record low number of applications per vacancy in the UK (Source: Personnel Today), providing proof if any were needed, that it’s a candidate-centric market.
It’s clear that employers can no longer take their pick of the top talent – rather, the top talent has to choose you. And that means building an employer brand that the best candidates want to work for…
Salaries and incentive schemes will always have a key role to play in attracting new hires. But increasingly, it’s the less tangible aspects of your offer that really make the difference – things like your company culture, values and your social outlook.
Employers, therefore, need to work hard to define what it is they really offer to candidates, building a desirable employer brand around an EVP (Employee Value Proposition) and communicating it clearly and consistently across a range of channels.
That’s where the use of technology comes in – providing not only a platform to build and market your employer brand, but also potentially forming a key part of your EVP itself.
After all, today’s mostly-millennial candidates want to engage with forward-thinking digital businesses, so positioning yourself as a tech-savvy employer could be a crucial factor in their ultimate destination.
Here are a few ways you can leverage the digital age to build and market your employer brand…
1 Careers website
For many businesses, online recruitment means a paragraph or two on your company website and ad-hoc adverts on the well-known jobs boards. But is that sufficient to help you differentiate in your market?
A careers page tucked away on a predominantly customer-facing website could suggest to potential employees that they are something of an afterthought – whereas a fully fledged careers site shows the value you place on your people.
A careers website also gives you a perfect platform to showcase your EVP in full. Use it to share real stories from your employees and give candidates a glimpse into what life is like in your organisation – promoting your philosophies as an employer, but backing it up with insights from those who once stood in the candidate’s shoes.
Of course, your website is also an ideal opportunity to flex your digital muscles and impress potential new hires with a slick and streamlined application process. Today’s candidates expect a modern, mobile-friendly online application experience, so this will certainly tick some important boxes.
Consider customised landing pages too, to speak directly to different segments of your target audience, or to focus on specific roles.
2 Social media campaigns
By opening up a two-way conversation with your followers, social media channels make the perfect place to build your employer brand.
The likes of LinkedIn, Facebook and Twitter are ideal engagement tools for establishing long-term relationships with the top talent of tomorrow – while also providing platforms for promoting your short-term recruitment drives.
Relatively newfound measurability makes social media even more powerful, with the likes of Twitter’s own analytics dashboard and a range of other third-party suites now available to help you analyse the relevance and appeal of your content.
3 Email marketing
Email marketing might not be new, but it still represents one of the best ways to provide personalised, tailored brand messages to your target audience.
Used in conjunction with well-segmented data, email marketing allows you to target specific groups of people with bespoke content that speaks directly to them – encouraging them to view you as an employer who shares and understands their values.
Similarly, when you have specific positions to fill, you’ll be able to target the right people for the role, rather than sending a one-size-fits-all job alert to everyone in your database.
Walking the walk…
Of course, it isn’t just potential candidates that have to buy into your employer brand – it’s also the talent you already have. If you want to keep hold of your best people, you’ll need to deliver on your promises across all stages of the employee lifecycle.
An employer brand isn’t just a recruitment strategy. It has to accurately reflect the values on which your business is based. If you’ve positioned yourself as a forward-thinking, tech-savvy employer, then that’s the experience you’ll need to deliver consistently.
There’s no shortage of ways to leverage technology to improve the employee experience, but your HR system should do much of the heavy-lifting for you. Not only should it enable you to reinforce your brand messages, but it should also improve employee engagement and productivity.
Mood-gauging ‘Pulse’ surveys are another way to engage employees, while internal social sharing platforms can help you deliver on values of collaboration and community.
Ultimately, if your employer brand aligns with both your organisational culture and real-life employee experience, great things can start to happen. Cost per hire comes down thanks to more accurate, effective recruitment, while your new hires quickly become engaged and enthused brand advocates – therefore contributing more quickly to your business.
In today’s employment market, it’s no longer a case of applicants competing for jobs, it’s jobs competing for applicants. Employers everywhere are really having to up their game to attract the best talent, and the development of a strong employer brand is an absolute must.
While technology is only a part of this process, it will continue to become a critical enabler in building your employer brand, especially as more and more tech-savvy millennials enter the workplace.
Nothing is accomplished in an organisation without people.
And the hub of all things people-related is the HR department, which drives activities – such as hiring, onboarding, leadership development and career improvement – that all have a big effect on the success of an organisation.
Therefore, both directly and indirectly, HR influences almost every aspect of a company’s financial performance and can have an impact that is overwhelmingly positive and profitable. Yet it can often be hard to prove this point, as people power is a metric that’s all too rarely measured.
But this is starting to change and HR teams that are adept at conducting people analytics are boosting profits – and their own reputation – by measuring and demonstrating the impact of people on financial performance.
But, how exactly do you go about measuring what many see as an intangible asset – human capital?
How to measure people power
The first step in this process is to ignore the maxim that human capital can’t be measured. The fact is that people are an asset with a value that is inherently measurable.
It’s true that not all aspects of human capital are measurable, but technology is providing increasingly sophisticated models that can identify sources of value generation in the workforce.
However, for measurement to be effective in terms of assessing the value of HR, it must be forward-thinking – rather than the more traditional rearguard measurement techniques such as employee engagement surveys. This is because financial forecasting in any business needs to take into account the likely future commercial impact of strategic decisions. In HR terms, being able to clearly demonstrate the business case for initiatives such as redundancy programmes, recruitment drives, or learning and development campaigns, can be extremely valuable.
But exactly what you measure must be specific to your organisation. So, before you start measuring, you must identify the people data with the greatest potential for tackling your biggest business challenges. You must also work out how best to extract this data from your systems.
Align your HR and finance teams
For HR measurement to be truly successful, there needs to be close cooperation between HR and finance – as only then can you fully assess the impact of human capital on profits. So, it’s a good idea to give the finance department access to HR systems, and vice versa. It’s also wise to appoint a finance analyst to work in HR, who will oversee human capital data collection and analysis and become the authority figure in this area for both departments.
When all the relevant data has been analysed, HR must then be proactive in getting these measurements into the hands of senior executives and ensuring they understand the implications of the data and how it underlines the case for key HR strategies and programmes.
The Xerox Experience
The case for people measurement is much more than just theory. It has been shown to work in practice, and a good example of this can be found at Xerox – which has initiated strong cooperation between its HR and finance departments.
Through sharing people data and the skill sets required to derive actionable insights from it, Xerox has been able to build predictive models for identifying the employees at greatest risk of leaving. This has helped cut staff turnover by 20%.
Also, Xerox now has a dataset available covering average labour costs according to role and country – enabling the company to target future talent investments in the biggest revenue generating areas.
The case for measuring human capital is becoming clearer – but few organisations actually do it. Some, like Xerox, do a great job of it, some don’t do it at all, whilst most are somewhere in between.
But you can’t be half-hearted when it comes to measurement – for it to be effective you need the full picture on human capital and its link to financial success and profitability. So, it is essential to link your measurement programme to clear business goals, introduce proper analytical systems and processes, and develop a strong relationship with the finance department to ensure an aligned approach.
Do this and you will produce valuable outcomes that, when acted upon, can greatly improve the financial performance of your company and also boost the internal standing of your HR department.
Our recent Natural HR annual conference – entitled ‘How HR can adapt to the changing workplace’ – was a fascinating event that yielded many insightful predictions for the coming year.
On 29th November 2018, three prominent HR experts shared their views on how the workplace will change in 2019. They were, gig economy specialist and HR influencer Annabel Kaye; entrepreneur and employee engagement expert Glenn Elliott; and writer and HR transformation specialist Andrew Spence. Their talks were followed by a panel discussion, in which they answered questions about the future of work and the changing role of HR.
So for this post, we’ve picked out the 5 key trends shaping the workplace in 2019 that emerged from the conference. The post also covers what each one means for HR leaders, employers and employees alike:
1. The rise of flexible working
An ever-growing number of employees want to work remotely or have greater flexibility in terms of work hours. In fact, a 2018 study by Powwownow found that 75% of UK employees wanted the option of working flexibly.
And this trend is certain to increase in 2019. A survey by XpertHR found that requests from employees for more flexible working have increased dramatically over the last two years and will continue to rise this year.
Technology has made it easier than ever to enable remote working. Staff can now access all documents and systems through the cloud, so are no longer reliant on office-based devices, and many organisations are turning to hot desking – so people just come into the office when they really need to, and then use any available working area.
Firms that embrace the demand for flexible working will also reap rewards, as remote working improves work-life balance and leads to healthier, happier and more productive employees. For HR, the main challenge will be to convince leaders with long-held beliefs that flexible working will lead to employees exploiting their new-found freedom, resulting in a drop in productivity.
2. Increasing use of automation and AI
The role of technology will continue to grow across all sectors during 2019, and with it will come increasing levels of automation and a greater role for artificial intelligence (AI).
And this will apply as much to HR as any other department.
2018 was the year where everyone was talking about the use of AI for HR. And 2019 is set to be the year where we move beyond the hype and more HR teams start to apply basic AI analytics.
One area in particular that AI is set to transform is the recruitment process – through systems that can analyse the web and scour thousands of candidates in seconds to produce short-lists automatically.
This trend means companies and HR departments must think carefully about the best ways to use automation and AI, especially as it may become unnecessary to continue training workers in certain skills.
Indeed, the conference panel warned about the dangers of relying on AI-led outputs that were built on flawed algorithms and inaccurate data. Glenn Elliott highlighted a number of examples where AI was used in the US for recruitment purposes, which led to ‘machines’ unintentionally discriminating against certain ethnic groups because of gaps in the initial thinking behind these projects.
3. More organisations embracing the gig economy
The gig economy has been on the rise for years. A report by the McKinsey Global Institute estimated that 20-30% of the working population has spent some time in the gig economy – and this trend will undoubtedly increase throughout 2019.
Gig working is increasingly popular amongst employees – with many now seeing it as a positive lifestyle choice that allows them to work for who they want when they want. The McKinsey study found that around 70% of those in the gig economy worked that way through choice, due to the greater autonomy and flexibility offered by this employment model.
For employers, there are many benefits to leveraging the gig economy. Firms that hire independent contractors may not have to provide benefits such as paid time off, and sick days, whilst gig workers can be employed on-demand to fulfil short-term goals, without having to hire full-time employees. Much depends on the classification of ‘workers’ though, as certain occupations such as taxi drivers and couriers are entitled to benefits, despite being part of the gig economy.
Indeed, gig economy expert Annabel Kaye cautioned that by simply taking on workers from the gig economy, many organisations are storing up trouble for the future through a lack of planning and processes, which may result in the poor treatment of these workers. Allowing this to continue within your organisation could result in your gig economy workers ‘sacking you as the client’, thus removing a valuable resource and impacting upon your business success.
4. Generation Z will represent more of the workforce
The presence of generation Z will be bigger than ever in 2019, as more and more of those born after 1996 will enter the workplace.
The conference panel argued that this group brings with it many benefits – as this is a tech-savvy generation who understand the value of hard work and are ready and eager to learn and contribute.
But the rise of generation Z can also be a challenge, as they tend to be extremely digitally focussed and live in a very connected world. This means they can often fail to see a distinction between work and social life, which may clash with more reserved older workers. A recent survey by APPrise Mobile in the US found that 36% of managers believe that managing employees from generation Z will be more difficult than previous generations, whilst 26% believe they will be more difficult to communicate with.
According to a 2018 study by Pew Research Center, Generation Z has ‘grown up through a major recession’ and as such are less confident and cautious, so they may be more risk-averse than the millennial generation who often view the world through ‘rose-tinted glasses’. This may present an interesting dynamic for HR teams.
5. Workforce diversity increasing
According to our expert panel, there has been little discernible increase in workplace diversity over the last few years, despite the trend for companies to publish diversity reports and make promises to change. This is because firms are largely sticking with their existing recruitment policies and practices. But 2019 will be the year where workplace diversity goes up a gear.
This is partly driven by the increasing diversity of society itself, and thus the available workforce. Also, companies that fail to display a noticeable commitment to diversity risk being seen as too ‘pale, male and stale’ – which can have a negative reputational effect amongst both potential customers and employees. So, it pays to change.
Increasing diversity could also be led by legislation. After the success of the mandatory gender pay-gap disclosures that started in 2018, the UK government is considering forcing companies to reveal their ethnic pay-gaps as well – and develop an action plan to close them.
These are the five big HR trends our conference experts identified for 2019. While they are not new, they are going to increase in prominence throughout the coming year and may well have significant implications for your organisation.
One to watch: An important, emerging trend that you can expect to hear more about in 2019 is the move towards Blockchain. HR technology leader, Andrew Spence explained how this technology – which in simple terms is a more modern means of storing transaction data – will transform the world of work in years to come. He argues that it will underpin a variety of HR activities, including candidate credentials verification, faster payments, employee records management and digital job matching.
Finally, no 2019 prediction would be complete without a mention of Brexit. Obviously, with so much uncertainty surrounding the issue, it is impossible to predict accurately what the repercussions will be. However, limited free movement of labour may well impact the ability of companies to hire critical talent, and this must be taken into consideration when planning for the next twelve months and beyond.
CIPD’s 71st Annual Conference & Exhibition returns 7 – 8 November 2018 at Manchester Central. The theme of this year’s free event is ‘leading the people profession’, with the aim for thousands of HR and L&D professionals to develop their skills and competencies in the ever-changing world of work to drive good work and good business within their organisation.
Over the course of CIPD’s two-day agenda, you’ll have the chance to be inspired by 60 free learning lessons and 38 professionally-led conference sessions. You’ll also have the opportunity to make valuable connections and network with over 5,000 people professionals from industry-leading companies.
Natural HR learning session: How technology can improve workplace engagement and productivity
In this free session, you’ll learn how tools can engage employees in feedback, reduce stress, improve communication and collaboration and enable flexible working. Jason’s session will be held at the ‘Technology and Innovation Area’ between 15:00 – 15:30 on Thursday 8th November.
Seats will be available on a first come first serve basis. It’s highly recommended you arrive early.
Beat the queues, book a demo in advance
Natural HR are delighted to be exhibiting this year’s event on stand G63 and will be showcasing our software. Getting the most from this busy event takes careful planning, so why not book a demo with Natural HR in advance to save time at the conference?
We’ll be on hand to gain a good understanding of your specific requirements and provide a tour of our all-in-one HR software tailored for you – which includes a core HR database, self-service, recruitment, performance management, time and attendance, expenses, reporting and people analytics.
To book a personal demo with our team in advance follow this link and by registering ahead of the event, we’ll automatically enter you into our prize draw to win a £50 Amazon gift voucher.
Be in the know – CIPD Annual Conference and Exhibition 2018
The gig economy is booming, and the makeup of the modern workforce might well be changed forever.
Zero hours is the new ‘nine to five’, freelancers are the new full-timers, and increasing digital capabilities mean independent and casual workers continue to rise. It’s estimated that as much as 30% of the working-age population in Europe is dancing to the tune of the gig economy already.
The pros and cons of the gig economy, both for these flex-workers and their employers, can be debated long and hard – but the movement itself is undeniable. It’s therefore unsurprising that legal and tax reform is underway in the UK, as the government seeks to bring itself up to date with the changing employment scene.
Indeed, the legal and tax framework for the gig economy has been under the microscope for some time now, with new proposals emerging all the time in response to the 2017 Taylor Review into working practices.
Predominantly, these changes seek to overhaul employment rights for casual workers, via stricter enforcement of holiday and sick pay rights, and higher fines for firms that breach contracts or mistreat staff.
As an employer, you, therefore, need to have your finger firmly on the pulse if your HR, payroll and finance teams are to avoid falling foul of the latest laws…
Changes to IR35
One of the key legislative changes implemented to date has been the amendments to IR35 regulations for the public sector.
Ever since its introduction in 2000, IR35 has made contractors working via limited companies responsible for determining their own employment status (ie whether or not they are effectively ‘employed’ by the hiring client) – but in 2017, the responsibility for that decision shifted to the hiring party.
That means it’s now also the ‘employer’ who would carry the can for an incorrect classification and would be liable to repay any tax that had been avoided.
From an HMRC perspective, this fundamental change has worked in increasing compliance, bringing more workers inside of IR35. But the move also served to increase the cost of freelance workers by an average of 10% – and created a skills shortage as independent workers moved to the less stringent private sector.
However, these changes now look certain to be implemented in the private sector too, with the most likely timeline predicting ‘go live’ in April 2019 – just one week after Brexit…
Gig economy expert, Annabel Kaye from the HR employment consultancy Irencion says:
‘It’s easy to get lost in Brexit and forget there are other legal and tax changes we need to be ready for. Now is the time to get a handle on who is likely to be affected and by what, to avoid the last minute scramble when everything changes.’
The impact of Brexit
Britain’s impending exit from the EU brings further complexity to the gig economy’s tax and legal framework.
The EU is currently seeking to introduce a Working Conditions Directive, designed to give EU workers the right to more stable contracts and curtailing the use of exclusivity clauses which tie workers to a single employer.
These clauses are already banned in the UK for zero-hours contracts, but the EU directive would go further, covering virtually all employment types.
The Working Conditions Directive also proposes changes to give workers more predictability in their shift times, while capping probation periods at six months – a move that’s directly aimed at the UK employment base.
It remains to be seen what the relationship will be between the EU and the UK once the Brexit deadline is reached, but a deal could involve the adoption of this directive into UK law.
Higher minimum wage for zero-hours contracts
Other proposed legal developments include the UK Government asking the Low Pay Commission to consider a higher minimum wage for workers on zero-hour contracts.
Taking into account the existing variation in the minimum wage for various age groups and apprentices, a separate rate for zero-hours workers would bring the UK up to no fewer than nine different minimum-wage rates,
Not only would this add complexity to an already challenging payroll landscape, but it could also bring further issues for HR departments in the management of their workforce.
A higher rate for zero-hour workers certainly has the potential to create resentment among other part-time workers (with fixed hours), who could in theory still be working fewer hours than their ‘zero-hour’ counterparts.
It could also be argued that zero-rate workers may then be less inclined to switch to a more stable contract, as it could mean taking a pay-cut to do so.
Kaye adds, ‘Insecurity on hours and pay is a major source of workplace stress for zero hours workers – particularly when combined with being on benefits – since all the ups and downs cause havoc with benefit payment cycles. The inhumanity of the gap between the two is a secret scandal waiting to erupt.’
Other possible changes are on the way…
In addition to these proposed changes to the UK’s tax and legal framework, a raft of other discussions are currently taking place. Suggested changes to national insurance and a PAYE tax scheme for gig economy workers are among the myriad of other ideas on the table.
In a period of so much change, it’s a real challenge for HR and payroll teams to keep track of the latest legislation, but we can give you a helping hand. We’ve recently held a guest webinar with special guest Annabel Kaye on this topic, called ‘How to avoid gig economy legal problems.’
In the webinar, Annabel went into greater detail on the implications of the IR35 shake-up and explored the steps you need to take to prepare – looking specifically at how the new regulations will impact line managers and finance departments.
It’s an opportunity to get first-hand advice from one of the foremost experts in this space – you can watch the webinar right now by clicking the link below.
The General Data Protection Regulation (GDPR) has been in effect for just over four months. For all the hype and trepidation that spread across the business world in the lead up to May 25th 2018, the noise has now somewhat dissipated.
So, what has been the impact of GDPR four months on, both on HR and the wider business? And how much is the Information Commissioner’s Office (ICO) ready and willing to flex its new powers?
For the latter, this may become clear very soon when we see what action is taken against British Airways (BA) for its recently reported data breach, in which its customers’ financial data was stolen from 380,000 online transactions. Based on GDPR penalties, BA could be fined up to £489m.
We have already seen that the ICO is prepared to act. In July, the Independent Inquiry into Child Sex Abuse was fined £200,000 after a staff member mistakenly inserted email addresses into the ‘To’ field, rather than the BCC field, in a mass email – allowing all the recipients to see all the other addresses.
At this stage, we have only seen the high profile incidents make the news so it is unclear at this stage how smaller breaches will be dealt with by the ICO.
When it comes to the impact of GDPR on the HR function, there are several notable trends emerging, as follows:
1. Heightened director liability
The ICO often struggles to collect fines for data breaches, as it can only impose them on the actual organisation that’s guilty of the offence. So, to avoid punishment, directors often dissolve the company, or put it into liquidation, and start a new business under a different name – thus evading fines.
But, under the new GDPR legislation, the government is now consulting on plans to give the ICO powers to fine directors personally when their companies transgress.
So, HR must make directors aware they could be personally liable for any data offences an organisation may commit – regardless of the status of the company.
2. Surge in employee Subject Access Requests
Many HR departments have been dealing with a significant increase in Subject Access Requests (SARs) from employees since GDPR came into force. The new legislation gives anyone the right to see the personal data held by any organisation, including their employer.
In some cases, employees have a genuine concern about what data is being held and processed and want to check its accuracy. But some companies are reporting SARs being made with little reason, other than to inconvenience employers with the possibility of getting compensation if a problem is discovered
It’s a time-consuming, administrative process, but HR is legally obliged to treat each SAR the same – and provide an answer within one month of receipt (although this can be extended to two months in complex cases).
3. Complications with gig economy workers
Gig economy workers, those on short-term or freelance contracts who can be classified as ‘self-employed’, are causing headaches for many HR departments thanks to GDPR.
This is because GDPR requires a company to show a high degree of control over the employee data it controls – regardless of their employment classification. But, to satisfy courts and tribunals that gig economy workers are correctly classified as self-employed, a low degree of control must be demonstrated.
This is a potentially damaging and costly paradox and one that is currently being played out in the courts through a case involving Deliveroo, which classifies its food delivery workers as self-employed. The result could have far-reaching implications for employment classification.
4. Making HR systems comply with GDPR
A great deal of the GDPR burden is falling on HR departments, requiring them to pull data together from numerous sources for reporting purposes. This task is admin-heavy and presents the possibility of human error, which is no defence where data breaches are concerned.
So, many HR departments are investing in data management and workflow tools that reduce this pressure and the threat of non-compliance. There are many examples of companies that have invested in new systems that automate data collection tasks and enable HR staff to easily manage data and produce reports.
GDPR is here to stay and businesses have had to adapt. Compliance is becoming business as usual and there is much-heightened awareness of best practice when it comes to data privacy. So from that perspective, the new legislation is working.
It’s also clear that the ICO is prepared to act and punish organisations that break the rules on a significant scale. How far the ICO takes less serious cases remains to be seen.
From an HR point of view, it’s more vital than ever to understand all the requirements of GDPR to help safeguard your business and your employees. But it is yet another responsibility to add to a function that is often saddled with an excessive administrative burden, so finding ways to automate and streamline GDPR processes is where many HR teams are now focusing.
Your employee experience (EX) is the sum of every touchpoint, exchange and interaction your people have with your organisation, right from their first contact with you as a potential recruit to when they end their employment. It includes pay and benefits, working environment, technology, security, performance appraisals, career path, training and development and so on. In short, employee experience is everything.
Employees expect a working experience that’s both engaging and enjoyable. And companies that respond to this reap considerable financial benefits, as happy employees are typically the most productive employees.
Businesses are becoming more and more aware of the need for an improved employee experience. According to a 2017 study by Deloitte, nearly 80% of executives rated employee experience as either very important or important. But just 22% reported that their companies were excellent at building a differentiated employee experience, whilst 59% of respondents said they were not ready, or only somewhat ready, to address the employee experience challenge.
So, the gap between understanding the need for good employee experience and actually doing something about it is wide. And that’s often because many organisations allow their employee experience to ‘just happen’ and don’t purposefully set out to design it in a way that creates positive engagement with employees. A great experience is not an accident and when it comes together, it’s because those responsible will have paid careful attention to how it is designed and implemented.
Improving your EX doesn’t have to be difficult or daunting. Here are four steps you can take to help ensure a great experience for your employees:
Step one – ask your employees what they want
Although this may seem like an obvious point, it is all too often overlooked. To change things for the better for people, you must first know what they think. In simple terms, this comes down to what employees feel has been poor about their experience at work in the past, and what they would like to see changed in the future.
What you learn will help you to see problems and challenges from the eyes of the employees, which is invaluable in helping you understand possible solutions and how you can put them in action.
One of the best ways to do this is through employee feedback and surveys. You need to develop mechanisms to obtain feedback at each stage of an employees journey and be able to analyse that data. You can also use “Pulse’ surveys that provide fast, simple and frequent feedback, delivered digitally every week or month. This takes the ‘pulse’ of your organisation at a point in time, can be done quickly and easily and the data aggregated to identify trends.
Step two – Define and set your desired goals and outcomes
Once you understand the opportunities and any problems you are facing in respect to your employee experience, it’s time to examine what matters most to people and define and set your goals in terms of addressing these issues.
Obviously, budget and other constraints need to be taken in to account in this phase, so everything needs to be examined carefully. This will enable you to establish clear goals in relation to your desired employee experience, which are based on solid evidence.
You also need to tie these goals into the outcomes you want from your EX-design. So, for example, what outcomes do you want from the onboarding process? What outcomes do you want from introducing new technology? What outcomes do you want from performance reviews? Depending on the make-up of your organisation, the profile of your workforce and your competition, you may be able to do certain things better than others – but focus on your strengths.
Step three – Address your core improvement areas
To improve the employee experience in any organisation, you must centre on three core factors:
Environment: Where people actually do their job can have a massive impact on how well they do it, so your working environment is a crucial factor in a positive employee experience.
More companies are seeing that investing in the working environment pays big dividends. Airbnb, for example, has introduced a new concept where employees can choose to work on their own or with others, and in different spaces – such as specially-designed workplace kitchens and living rooms.
Culture: The workplace culture can be both positive and negative, depending on how it’s perceived by the employees. But people often don’t know or understand a company culture until they actually start work. And if they start working and discover they don’t like the culture, then it will affect their productivity, whilst their negative attitude will also drag others down.
To avoid this, it’s a good idea to illustrate your company culture with a clearly defined vision and set of values, so potential employees know what they are entering into before they take a job.
Technology: The tech that employees use to get their job done is another crucial part of your employee experience. Good tech enables, bad tech hinders.
So, try and use technology to improve life for your employees, but don’t just focus on processes for getting work done or automation. A good example is using digital communication tools and systems to enable flexible working options – meaning your staff aren’t bound by the grind of the traditional working day and commute.
Nick Court, CEO of People Experience Hub, a leading EX-technology platform says:
‘Too often companies introduce technology to improve the way tasks are completed, rather than to enrich the experience of the employee. This is the company, rather than people-centric thinking – so this mindset change is important when designing experiences and especially when introducing technology.’
Step four – measure, monitor and evolve
To be successful, the progress of your employee experience must be measured and monitored. What exactly is making the lives of your staff better? And is there anything that is actually having a negative effect?
So, you must constantly touch base with your staff to understand what is happening – and tweak your strategy accordingly. This will allow your employee experience to evolve and prosper.
The benefits of an employee experience created by design can be huge, with companies employing highly engaged workforces reporting significant profits. A recent global study by Gallup found that companies with the highest proportion of engaged employees experienced 147% higher earnings per share (a key profitability indicator) compared with their competition.
The key building block to the ideal design is your data. As Nick Court says, ‘Your data helps you answer the fundamental question for every business. And that is Why? Why do your people come to work every day? Why do they work here? Why do they leave? It all starts and ends with your data, so you have to get that data together and you have to keep collecting and analysing it to help you build out your journey effectively.’
If you want to learn more about designing the ideal employee experience, you can watch our guest webinar with Nick Court from People Experience Hub, here.
For businesses investing in any kind of new software, the vendor selection process is typically driven by three key factors.
Firstly, the buyer determines what features and functionality are required to serve their purpose, and seeks out the vendors best able to meet these requirements.
They then consider a shortlist of options based on customer service and maintenance quality. Which provider has the best track record on support? Who will be the most responsive to technical issues?
The third determining factor, of course, is the price.
But there’s a fourth (and fifth) key consideration in buying new software that is all too often overlooked – and it’s particularly relevant to investment in HR technology. We’re talking about implementation and adoption.
It’s true that implementation is typically considered as part of the pricing discussion, but usually just as an itemised cost. The implementation approach behind the price is rarely probed in depth.
Yet evaluating the implementation approach of an HR software provider is critical to the smooth delivery of the project, and is perhaps the single greatest contributing factor to the adoption rates that will ultimately define the project’s success.
Indeed, failing to take these areas properly into account could not only lead to a disruptive project that overruns on time and budget, but also to poor take-up across the workforce. However great the promised functionality, an HR system is worthless if your people avoid using it.
So, what exactly should you be looking for in the vendors’ approach to implementation and adoption?
To achieve the healthiest adoption rates and long-term ROI, you’ll need a vendor that will treat you more as a partner than a customer. A platform provider that will work with you side by side through the implementation process and beyond, rather than simply selling you a system and leaving you to build your own implementation plan.
This latter approach is common at the cheaper end of the software scale. Tier 3 platforms (standardised cloud-based systems, with fewer complex features) can cost as little as a few hundred pounds per year, but you’ll usually have to implement the system yourself with minimal support from your provider.
Unless you have your own technical experts in-house, this clearly increases the risk of the implementation going wrong and increases the time you’ll need to allocate to the project – amid a busy workload – to get the system up and running. Often, it’s a classic case of false economy.
So, to ascertain your potential provider’s approach to implementation, don’t just ask how much and how long. Probe them on the following four areas…
The prospect of migrating HR data from your current systems (especially if that is an Excel spreadsheet) to any new system can be daunting, so you need to know exactly what support is provided.
Ideally, your provider will take care of the data migration for you, populating the system with your employee records rather than simply supplying an empty shell.
However long or short the proposed lead time, you’ll want to know what’s happening every step of the way.
Look for providers that can promise you a dedicated Project Manager for a consistent point of contact, and ask for access to a shared project management system that allows you to track progress and collaborate in real-time.
Training and support
User adoption will usually come down to how comfortable and confident your employees are using the new system. Two factors come into play here – one, the simplicity of the platform itself, and two, the level of training and support on offer from your provider.
Ask your prospective vendors what initial training they provide, and look for the approach that best suits your business. This might be training delivered in person, in-system walkthroughs, video tutorials, webinars, or a combination of all of the above.
Educating your workforce is key to adoption too. You’ll need to communicate the benefits of the new system to your employees to get their buy-in as early as possible, so ask what your supplier can do to help in this regard.
Some systems come with pre-built comms that you can use to promote the benefits of your system to staff, along with demonstrations and presentations to support your launch.
Of course, there are things you can do yourself to aid adoption too. For instance, you may want to recruit ‘change champions’ – networks of employees who are trained to use the new processes and tools and can feedback and share their new system skills with others.
Price will always be a key factor in selecting any piece of business software, but in the particular case of HR technology, a low-cost implementation could ultimately prove the most costly.
In assessing prospective providers, it’s therefore important to look beyond the price and understand what support you can expect with key elements of the implementation.
If you’re left to carry the burden of data migration and onboarding yourself, the risks of a failed or sub-standard implementation increase – meaning wasted investment in a system that may never see the light of day.