With being just three weeks into the new year, many employers will unfortunately be thinking that their employment challenges remain the same as those in 2022 – stagnant wages, increased costs, recruitment challenges, employee engagement and retention, and dealing with the implications from industrial strike action. We have seen from our recent webinar – 2023 – planning for the year ahead, that many changes are expected this coming year and we will be here to support you as and when they do.
In recent months we have been delving more into what the employment concerns are in the minds of our clients and gained a useful insight into the current state of play.
Employment challenges of 2022
From a recent poll, we found that 48% of respondents found the biggest employment challenge of 2022 was the ability to recruit, whilst 30% believed the cost of living was the second largest. Other challenges included employee engagement at 29% and employee retention at 18%.
Planning for 2023
We have explored how clients are preparing their business for the year ahead. We identified in a poll last month that 67% of respondents had started planning for 2023, although only 3% said that they felt confident in knowing what employment challenges and changes are for the year ahead.
This perhaps reflects the level of uncertainty that there is in the UK economy at present, as well as ongoing, sustained strike action that impacts on everyone, not just those businesses whose employees are participating in them. Going by the largest challenge from 2022, planning would need to centre around the ability to recruit and what strategy is necessary to overcome this.
We also ran several polls relating to topical key employment practices: trade unions, organisational change and reward and recognition. All of which play an important role in maintaining employee relations, employee engagement, employee attraction and effective organisational design.
These all contribute to an efficient and cost-effective business, slicker working practices, high engagement levels, low staff turnover and the ability to attract and retain top talent.
These are the key points from our recent polls:
1 |Industrial relations
- 39% said that they would likely recognise a Trade Union if they received a formal request for recognition, with 39% equally being unsure.
- 57% already formally recognise a Trade Union in their workplace, but 63% felt that the relationship between the workplace and the Trade Union needed improving. This area is perhaps one to consider when setting out your 2023 People Plan.
- 60% reported that they would be looking to make redundancies in the near future, with the majority looking to make fewer than 20 roles redundant (the threshold for collective consultation)
- 57% of respondents, however, did not feel confident in carrying out a legally fair redundancy process. Ensuring managers are full trained on managing change is going to be vital at a time like this because to get the process wrong can be costly.
2 |Reward and Recognition
- 31% of clients have a Reward and Recognition strategy, which was either standalone, or incorporated within their People Plan.
- 48% believed that having a Reward and Recognition strategy could positively impact on employee retention, following by 32% on employee engagement, and then 19% on the ability to recruit.
- 27% would be giving a pay rise to their employees this year.
- The level of pay rise anticipated by respondents were:
– 18% would offer between 1 – 2%
– 58% would offer between 3 and 5%
– 9% would offer between 6 and 7%
– 6% would offer between 8 and 10%
– 3% would offer around inflation levels i.e., around 11%
– 77% would offer a one-off discretionary bonus this year as an alternative to offering a pay rise. Reward and recognition is vital in attracting candidates when you are already experiencing recruitment challenges. It also supports high engagement levels and therefore aid staff retention.
What steps can you take?
With the year ahead looking to remain challenging, here are our top 5 key takeaways from our findings:
- Review the organisation structure – is the business organised correctly? Is there the right number of roles? Are all roles needed? Are there any skill gaps? Does the structure remain fit for purpose? We know from our research that many employers are taking the difficult decision to restructure, but carrying out a review doesn’t always mean redundancies. It may be smarter ways of working are found, or realigning structures are what are needed.
- Develop your own People Plan for 2023 that is aligned with your business goals, values, and beliefs, and either incorporate a clear Reward and Recognition strategy within it or have it as a standalone.
- Look at how you can overcome the challenges with recruitment, which has been shown to be the biggest challenge overall. Again, link initiatives back to the business goals, values and beliefs.
- Think creatively about how you can reward and recognise your employees, given the cost-of-living crisis. Not everything needs to be financial, and in fact, as we explored in our recent webinar, people’s actions are motivated by both physiological and psychological needs according to Maslow’s Hierarchy of needs. Look at providing a broad range of initiatives to reward and recognise staff throughout the year, not just as a one off. It may be having a clear succession plan, career development path, recognition schemes from within and outside of the organisation and providing fair and equitable pay.
- If the business can’t afford pay rises, consider other measures to show that you understand that it is difficult for your employees to manage day to day costs. We know that some employers are offering one off bonuses, but even if this is a struggle, can alternative measures be found to help offer support? Free/subsidised meals at work for instance? Discounted products?
Employment Law Seminar
Understanding employment law will not only protect your employees, but also you and your business, should you find yourself in the position of an employee raising a claim against you for example.
On Wednesday 22 March 2023 we are holding our annual Employment Law Seminar. The seminar takes place from 10am to 12pm and will be a free, virtual event that anyone is welcome to attend.
Here is what you can expect from the event and the area that we intend to cover:
- 2023 statutory rates and what it means for budgets.
- Understanding exclusivity clauses in contracts of employment and why they are prohibited.
- The International Labour Organisation’s Violence and Harassment Convention.
- Retained EU Law (Reform and Revocation) Bill and what it is likely to mean for employers
- Developments on holiday pay, including how to calculate holiday pay for those with irregular hours, following the Harpur Trust v Brazel 2022 judgement.
- Employment status – mutual obligations and control.
- Agency workers and job vacancies.
Secure your place and register here.
Webinars on Demand
We host monthly webinars but also appreciate that not everyone has the time available to attend them live. We have created a HR Webinars on Demand hub, allowing you to watch any of our previous webinars at your convenience.
View our HR webinar library here.
Redundancy is a difficult topic to get right. If you require additional support or information regarding them, you can view our dedicated webinar on the subject here.
We also recently created a helpful article that helps to understand how you can successfully manage the redundancy process.
The cost of living is having an impact on us all, with rising prices and increasing inflation, many business owners are concerned that a recession is a very real possibility for 2023.
Managing in a recession can be extremely difficult for business owners and we are here to support you.
We have created a helpful 10-point plan which can be used as a checklist to ensure you are using all of the resources available, to maximise the potential for business success, despite the difficult financial circumstances that we find ourselves in.