Reward insight
Navigating the Brexit challenge
David Woodward, chief product and marketing officer at SD Worx UK, discusses HR strategies to stay in control
T he momentous Brexit decision taken by the public on 23 June has left employers across the United Kingdom (UK) having to wrestle with a vast range of workforce-related issues. Currently many employers, particularly in the retail, hospitality and healthcare sectors, depend heavily on European Union (EU) nationals to fill resource gaps. (Recent analysis suggests that non-UK nationals comprise ten per cent of the UK workforce.) With the ultimate shape of the post-Brexit future mired in confusion, it remains far from clear what the long-term impact of the leave vote will be on EU nationals currently living and working in the UK. In the most extreme scenario, they could be treated the same as non-EU nationals which would make the process of recruiting and retaining them much more expensive and unwieldy for businesses. Whatever the end result, the fact that the UK will ultimately leave the EU will inevitably influence some workers to leave the country. Coupled with this, employers will have to negotiate the likely introduction of constraints, making it harder to transfer staff quickly and easily from the UK to mainland Europe and vice versa. The fact that EU workers make up much of the UK skills shortage in areas like engineering and IT, in particular, is inevitably another significant concern for many organisations across the country. With much of the long-term impact of these changes still uncertain, there is a danger that businesses become locked in confusion, taking knee-jerk short-term measures to address the changed trading environment. There are after all a raft of other employment-related issues that they need to address, and it’s imperative that they don’t take their eye off the ball. The national living wage is now law meaning that anyone aged 25 or over and not in the first year of an apprenticeship, is legally
entitled to at least £7.20 per hour. With the average woman in the UK earning 85.5p for every £1 paid to a man, new legislation scheduled to come into place next April will require companies employing more than 250 people to publish details of their gender pay gap. The apprenticeship levy, which requires all employers operating in the UK with a pay bill over £3 million each year to make an investment in apprenticeship, will also come into play in spring 2017. This is all new legislation that benefits employees but brings additional costs to employers, so organisations need to focus on them despite all the current political uncertainty. It’s important that issues such as engagement and pay do not get overlooked because of Brexit, and that the welfare of workers remains of the greatest importance to UK businesses. ...a danger that businesses become locked in confusion, taking knee-jerk short- term measures... How can the latest systems and solutions help businesses retain and recruit the best talent and ensure they are getting the most out of them? Cloud-based human resources (HR) and workforce management systems are certainly part of the answer. Effective forecasting, labour deployment and scheduling tools allow businesses to improve efficiency whilst controlling payroll costs by ensuring ‘right people, right place, right time’. They can also help ensure companies comply with employment legislation while also managing costs through efficient scheduling and rostering.
But it’s also all about better empowerment and engagement with staff. Giving employees the tools they need to take more control over their work-life balance (e.g. availability management, shift trading, holiday requests, flexible benefits) results in happier employees who are less likely to leave. Though HR and workforce management systems can deliver these benefits it’s also about creating a culture of engagement, and in this respect we would advocate a three-pronged approach. The first stage is assessing employee morale, values and the overall impressions of the company to gather feedback on what is working at the company and what can be improved. The second phase is to use the results to address any employee pain points or areas of disengagement identified. If managers don’t have sufficient insight to manage staff effectively, offer them a solution with data on turnover top performers and the true cost of each worker. If feedback highlights employee scheduling concerns, they can invest in technology that ensures scheduling accuracy and flexibility. Finally, organisations need to identify the values that will shape their culture, use them as guiding principles for their strategic decisions going forward and ensure that their leaders at all levels buy into and live out their values. In the post-Brexit environment, with uncertainty rife and job security low, keeping staff engaged and happy has never been more important. Businesses must not be blinded by the decision to leave into following short-term reactive strategies that simply reflect the new trading environment – employee engagement needs to be a priority not an afterthought, and every business will benefit from addressing it sooner rather than later. As they look to the future, organisations will increasingly benefit from adopting a more urgent approach to staff satisfaction. n
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Issue 25 | November 2016
| Professional in Payroll, Pensions and Reward |
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