A decade ago, hardly anyone had heard of the gig economy and flexible working was a topic only approached with caution. The nine to five was very much the norm and working remotely was still only a dream for most employees. However, there have been huge technological, legislative and cultural changes in the last 10 years that have had a significant impact on the employment arena; but as new developments and opportunities arise, so do the HR challenges facing businesses.
While businesses are now required to provide gender pay gap, CEO pay ratio and ethnicity pay gap reports, pay transparency will likely continue to grow in importance. The ongoing topic of pay creates a challenge for HR as more employees start questioning their own pay levels. If these concerns aren’t tackled correctly, there is a risk of creating a disgruntled workforce inclined to raise grievances or seek alternative employment. As this is the second year of reporting, businesses will be under pressure to ensure they can demonstrate they are addressing any issues that were identified the year before. The next few years could see sanctions imposed on those businesses that don’t make positive progression towards closing the gap. There will also likely be a much greater spotlight on any initiatives brought in to tackle the issue.
HR now has access to a deluge of information such as recruitment data, employee demographics to performance KPIs. This year will see more pressure on organisations to interpret this data and use it to inform their hiring decisions and make evidence-based decisions about their workforce. Analytics helps to make better sense of the data to uncover patterns, spot potential issues, identify new opportunities and drive workforce decisions.
Reducing HR costs
A significant challenge this year for business will be to improve HR efficiency while also reducing costs. For many organisations, the solution will be to outsource the HR service. Outsourcing HR cuts the cost of recruiting full-time HR staff while also providing a more flexible and customised solution that supports the business with recruitment, onboarding, training, compliance, payroll and benefits administration. Outsourcing this area of the organisation also offers the benefit of freeing up time that can be spent on company sales strategy and growth goals.
Good Work Plan
There are around five million self-employed people in the UK and this figure is set to carry on rising this year. Self-employed workers are expected to cost the Treasury up to £3.5bn in lost tax revenue by next year. Not surprisingly, the government wants to tighten up this area under new legislation called the Good Work Plan. This plan will utilise new technology and changing social trends to enhance the rights of agency workers and those on zero-hours contracts. The new legislation came into force in April 2019 increasing the penalty for breaches of employment rights from £5,000 to £20,000. Additional legislation is planned for April 2020 which will affect the calculation of holiday pay, the extension of the right to written particulars to all workers and banning agency workers from being able to opt-out of certain protections. For HR in 2020, it means tightening up the criteria used for classifying someone as an independent contractor and ensuring they stay well informed of further changes to their responsibilities.
Talent Attraction and Retention
As Brexit continues to unfold and companies are still coming to terms with the changes introduced by GDPR, 2020 is expected to offer significant challenges in terms of recruiting and retaining talent. Tight talent pools continue to be of considerable concern to UK businesses along with pay expectations rising in the private sector by 0.5% to 2.5%, according to research from the CIPD. With a global skills shortage heating up the competition to not only attract but also retain top talent, businesses need to create a successful talent management model that can attract talent without always having to actively seek it. Alongside offering flexible working and work-life balance, HR can leverage unique company benefits and company culture in order to stand out.
HR Planning Support
At HR Solutions we can help you plan for these challenges as part of our HR Retained Services. If you want to find out more, call 0844 324 5840, we’re here to help.