Five Key Trends For UK HRM In 2018

Five Key Trends For UK HRM In 2018

What’s in store?

As the Christmas over-indulgences and festivities fade and the New Year starts, it is that time of year when we are often asked to try to predict trends over the next 12 months for human resource management (HRM).

An important starting point is that there are trends for both:
a) HR policy and practice; and
b) HR professionals.

In terms of the latter, too many practitioners still fail to remember that rather than continuing to search for the ‘holy grail’ of strategic importance, influence and relevance, a key role is to be an ‘Employee Champion’ in the words of leading expert Dave Ulrich in his seminal and influential book, ‘HR Champions’.

With this in mind, I will note five key areas that will be the focus of both aspects of HRM. These are not mutually exclusive but inter-linked.

  1. Brexit

There are two aspects to this:-

i)Migrant workers

What might happen to numbers and the different sectoral implications of that (as below on productivity)? If there are shortages, perhaps it will then encourage management to actually pay more and/or invest in labour and training.

London’s long-term position as a truly global financial centre and agglomeration is so much more dominant than any EU city.

ii)Financial services jobs

To what extent is some bank rhetoric about jobs losses in the UK close to reality? What is likely to happen and what will be the impact on London’s position as the world’s leading financial centre remains debated.

London’s long-term position as a truly global financial centre and agglomeration is so much more dominant than any EU city. There are 2,215,000 financial and related professional service jobs in the UK, with over 750,000 of them in London (City A.M.), of which 363,000 are in financial services (148,000 in banking, 76,000 in insurance, 31,000 in fund management, 108,000 in other roles) and 388,00 in related professional service (107,000 in accountancy, 181,000 management consultants, 100,000 in legal services).

Over 250 foreign banks have an office in London. No EU city will replicate the City easily, speedily or freely. There are just 35,000 people in financial services in Dublin. Frankfurt’s total city population is just 730,000 and Paris, like the other cities, has its own costs and issues, from language, tax rates and regimes to capacity and infrastructure.

‘Rewiring’ financial services will be expensive and any fragmentation of them, costly. Also, there has been backtracking by some banks on job moves and recent offers from the Bank of England. Actually, the over-arching threats may actually be from New York as the main place that can replicate London’s depth of markets and expertise or a pivot to powerful Asian global financial centres in the dynamic and growing areas of the world, such as Hong Kong and Singapore.

  1. Rewards

This thorny area will continue its importance. This has two linked aspects:

i)Gender pay gaps

The need for companies to produce gender pay gaps and also actually explain them means this this will be a crucial area. Already some have noted a possible lack of enforcement power. Of course, sectoral variability in gender pay gaps was expected – and can be seen – with the ‘usual suspects’ the worst offenders – financial services, which has an average median pay gap of 24 percent according to the government.

ii)Levels and comparisons

This is at both the top and bottom, such as policing and enforcing the national minimum/living wage, especially as numbers on them are set to soar. This is even more so as 2018 is the 20th anniversary of the minimum wage legislation. Yet, the UK’s High Pay Centre’s ‘fat cat day’ (when the average FTSE 100 chief executive will already have been paid the same as the average UK worker earns in a year) has been and gone – 4 January!

Also, the blight of zero hours contracts, which are more prevalent in certain sectors such as retailing, restaurants, leisure and hotels, will remain.

  1. Gig economy and zero hours contracts

The legal case about whether or not people are ‘contractors’, ‘dependent contractors’ or actually ‘employees’ of businesses, such as Uber, will continue. This is linked to whether ‘gigs’ are ‘good’ ie allowing freedom and flexibility or ‘bad’ ie uncertain work and exploitative, as well as who should pay for employee benefits.

Also, the blight of zero hours contracts, which are more prevalent in certain sectors such as retailing, restaurants, leisure and hotels, will remain. This situation is despite the number of people on such contracts falling slightly in 2017 (according to the ONS), down to 883,000 from 903,000 in 2016, but which has followed their phenomenal rise from 168,000 in 2010, 252,000 in 2012 and 585,000 in 2013.

  1. Technology

Of course, driving the gig economy is technology, which is also having an impact in terms of ever more pressure on fixed jobs while enabling more remote workforces and telecommuters. Technology will also have impacts in terms of how firms find and recruit people, such as ‘blind hiring’ and ‘bots’ for resumes and HR documents.

Also, there are growing fears about automation and robots as they may reduce jobs and exacerbate inequalities by eroding poorer workers’ wages while boosting the incomes of creative and highly skilled people.

Of course, this is not a new issue or area of contention, including not only the Luddites but also technology’s seemingly inherent deskilling, as in the Braveman/Marxist thesis and the prospect it held out of halcyon days with the nirvana of so-called ‘leisure society’ where would all be prosperous despite working so little due to technology!

  1. Productivity

Linked to all the above, this is the most important area for HR. Productivity needs to be improved. UK plc needs to try to develop a high employment, high productivity and GDP/head system. This requires a trio of better basic standards of literacy and numeracy; better quality vocational routes into careers; and better investment in workplace training, infrastructure and technology.


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