The grass is greener for talent
Uncertainty about the business environment has increased by 50% over the last three years according to the fourth annual State of HR Survey of senior HR professionals across the UK conducted by City law firm Speechly Bircham LLP in partnership with the Management Learning Board at King’s College London. The survey highlights several areas of concern facing HR professionals this year but also questions whether HR professionals have faced up to the challenges of managing employees in the current environment.
Looking back, two or three years ago, having been thrust into a recession, HR were busy undertaking redundancies and looking at strategies to ensure that key performers were motivated to stay with their organisations. Other employees were apparently grateful still to be employed so they accepted pay cuts and increased responsibilities. The general view was that life was no better elsewhere and it was sensible to hold on to your current job until things improved - hopefully soon.
Fast forward to 2012 where we have lean workforces with employees still working harder for less reward. The risk to HR and business is that employees will inevitably become less willing to accept this position and increasingly believe that the grass is actually greener elsewhere.
The Speechly Bircham/King’s survey highlights that organisations are facing higher levels of employee stress, absence, presenteeism (employees attending work when they are unwell) and discontent. Employees are disengaged and less committed. It is dangerous to think that a fragile economic recovery can be sustained with this background. Organisations need to invest in their employees and reverse these trends to encourage growth.
Alarmingly, however, it appears that business impetus for addressing staffing concerns is waning. While employee engagement is recognised by almost 70% of organisations as a major challenge to HR for 2012, the survey highlighted a noticeable reduction in the number of HR initiatives to drive engagement.
Talent shortages, presenteeism & discrimination
Now is not the time to be running out of ideas and enthusiasm for building employee engagement. Organisations need to take steps to retain their staff, particularly given that nearly 40% of survey respondents reported talent shortage as a key business concern for 2012. This is a growing problem for organisations - talent shortage was a key concern for only around 25% of respondents in 2009. With the added effects of immigration restrictions and an ageing workforce, organisations need to be taking positive steps now both to retain their own staff and be attractive to job seekers.
One of the more disconcerting statistics from the survey is that redundancy no longer appears to affect employee engagement and staff now seem to view workforce reductions and restructuring as a 'normal' part of working life.
Presenteeism has emerged as a new trend in this year’s survey. It's unclear whether this is driven by changes to sick pay policies, lack of resources to cover periods of illness or job uncertainty, but it is worrying on many levels. There is obviously a significant well-being and health and safety impact on the ill employee, but also on others in the workplace and presenteeism has a detrimental impact on morale.
Part of the difficulty faced by HR this year is recognising the nature and extent of the issues affecting employees. For example, in the survey only 12% of respondents identified diversity and discrimination as a major issue in 2012, yet 30% of organisations reported grievances based on discrimination in 2010/2011. This problem is likely to be exacerbated by the extension of the qualifying period for unfair dismissal claims to two years, which is likely to increase the number of discrimination and whistleblowing claims where there is no qualifying period and no cap on compensation.
Discrimination issues generally seem to be slipping under the radar at the moment. Despite the abolition of the default retirement age in October 2011, many organisations reported in the survey that they have kept a normal retirement age and 20% achieved reductions in their workforce through early retirement. It is doubtful that organisations will be able to take this approach in the future as the grounds for justification of a retirement age are very limited.
Talent shortages and difficult working conditions mean that top performers are constantly at risk of being poached by other businesses. Nevertheless, it appears to be the case that significantly more HR resources are dedicated to poor performers than actual high performers. 72% of respondents to the survey said that poor performers receive above average HR resources. While we would hope that high performers also receive above average HR resources, more than 55% of respondents to the survey said that high performers receive below average HR resources. The survey identifies correlations between the allocation of HR resources and the levels of absence and engagement across the whole workforce. For example, where high potentials receive below average levels of HR resources there is more absence and lower engagement.
The survey highlights that, while there are some positives, such as the growth of flexible working, 2012 is the time for HR to get to grips with what is truly going on in their organisation (or be given the time and resources to do so) and to take proactive, rather than reactive, steps towards a better future.