Foreword
By Stephen Bevan, Head of HR Research Development, Institute for EmploymentStudies
All of this adds up to a labour market which, in many respects is defying convention and forcing employers to think differently about the ‘deal’ they offer their employees and the psychological contract they want to nurture, especially with their most prized and talented staff. These challenges face firms in all sectors and regions, and they affect small and medium–sized enterprises (SMEs) and large corporations alike, but perhaps in different ways. One of the big questions which the research in this report by Moorepay is asking is, if employers are to compete for skills in what is an increasingly buoyant labour market, how can they differentiate themselves from their competitors? More specifically, it is also asking what SMEs, with perhaps more constrained resources and less immediate access to specialist HR support, can do to make employees feel valued and make their reward and benefits packages fit for purpose, flexible, personalised and effective. One of the many valuable insights from the research contained in this report is the slightly uncomfortable mismatch between the needs of those who work in SME’s (to feel valued, to get recognition etc) and the perhaps misplaced confidence with which the leaders of many SMEs claim they are meeting these same needs. While this is by no means a new phenomenon, it seems to me that the existence of this ‘perception gap’ is worrying if SMEs are going to avoid losing out in the ongoing war for talent as the squeeze on labour supply tightens further.
I’m very conscious that it is easy for people like me, who are paid to provide an ‘informed’ commentary on the changing world of work, to lecture busy employers about getting better at managing uncertainty, change and precariousness. To be honest, in the last thirty–five years, I’ve not met a successful business yet which hasn’t had to master all of these challenges – and a few more besides – as they strive to be sustainable, innovative and competitive. But even I have to admit that we are living in pretty extraordinary times. Of course, Brexit is a dominant source of disruption and uncertainty, but even without this the UK has a persistent productivity problem, we have almost stagnant real wage growth even though unemployment is at a record low, and we also have growing fears about rampant automation and the ‘casualisation’ of work through the so–called ‘gig economy’. On top of this, UK employers have the demographic challenges of an ageing workforce and the growth of chronic ill–health in the working age population to contend with.
Whitepaper – The Engaged Employer 03
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