So, what has Europe ever done for us…?

Karen has returned to France for the summer and here is her first blog of the season… Thoughts of how she felt before the referendum. It’s still a hot topic and will be for some time…

It’s a strange time to be back living and working in France, with the EU referendum result.  Up until last week it was always a given that, as a citizen of a fellow European Union country, that I am welcome and able to live and work here on equal terms.  How will that change after 23 June 2016?

I am not alone as a UK citizen living and working in another EU country.  In Spain alone there are over 1 million UK citizens doing something similar, many of whom have retired there.  For many people this ability to live and work in another country may not be of interest and not something that you ever see yourself doing.  But there are other working life benefits that have come from being part of the EU, some of which may feel more relevant to you.

So what am I referring to?  Let me give you a few examples………….

  • Paid paternity leave, and now shared parental leave (which is paid, rather than unpaid). Both partners / parents can now have time off to spend with their new born or adopted child, not just the mother.
  • The right not to be discriminated against because you are a parent (expectant mother, a maternity leave returner, a working parent etc).
  • Guaranteed paid holiday of at least 30 days per year (including bank holidays). Depending on your age, you may remember the days when there was no such thing or certainly a lot less paid holiday.
  • The right to be part of a trade union, should you want to be.
  • Your employer has to provide you with a safe working environment, with the personal protective equipment (PPE) to keep you safe and allow you regular rest breaks.

There are lots more examples I could cite that we take for granted, and that any good employer would do anyway to keep their employees motivated, healthy and safe, without “Europe telling them to”.

Don’t necessarily believe that all employment legislation that comes out of Europe is “bureaucratic” or Europe “interfering”.  A lot of what current UK workers, not just employees, take for granted happened thanks to Europe.

Perhaps this is something to ponder as the holiday season approaches, when you may be enjoying some paid time off in the Mediterranean sun somewhere (without the need to get an entry visa) …..

Eu exit and the implications for your business

Following the unexpected confirmation of a “leave” vote, many businesses will already be turning their attention to what happens next?

The most important message is that the referendum result does not trigger any automatic legal changes; neither does the UK’s formal notification that it will be withdrawing from the EU.

The UK will continue to be a member of the EU for the time being, and the status and effect of all UK and EU law remains unchanged for now, and possibly for some time in the future.

Beyond that, however, much remains to be debated and negotiated – such as the shape of trading agreements between the UK and the EU, the status of EU-derived law, thorny issues such as acquired rights, and the UK’s relationships with non-EU states.

It’s still business as usual for a while – no immediate changes

Neither the referendum result nor the UK’s formal notification to the EU has any immediate legal effect. From a legal perspective, it will be ‘business as usual’, probably for some time to come.

  • The next step is for the UK to give formal notification to the EU of it’s intention to leave. This will start the withdrawal process, which must be concluded within two years unless an extension can be agreed (which requires the consent of all twenty-seven remaining Member States).
  • The future trading relationship between the UK and the EU could take one of a number of different forms; which form it takes will have significant implications in terms of the movement of goods, services, people and capital.
  • The UK will also need to undergo a major legislative project to identify which areas of EU-derived law will stay, which will be modified and which will no longer have effect in the UK.

Each of these processes is likely to involve much consultation with the UK public and industry. Businesses have an important part to play in shaping the environment that they will be trading in, domestically and cross-border.

Employment implications of Brexit for your business

UK employers are unlikely to see any large-scale changes to current employment law in the short-term as a result of the UK leaving the EU.  The UK’s on-going relationship with EU Member States, as well as our own workplace culture, is likely to demand that the UK retains many of the EU-derived laws that have already been incorporated into domestic legislation.

Free movement of workers within the EU

Now we’ve voted to leave the EU, the free movement of workers will certainly be affected. However, changes to legislation are likely to be gradual rather than immediate.

While in theory citizens of EU member states no longer enjoy the automatic right to work in the UK (and vice versa), this will form part of negotiations to establish the UK’s new trading relationship with the EU.

EU nationals already employed in the UK may already have acquired rights under UK legislation, depending on how long they’ve been here. It’s likely that many will be permitted to stay in return for a similar agreement for UK nationals currently employed in EU member states.

For prospective employees, however, it may be a different story. While it will still be possible to employ personnel from EU member states, there may be extra administrative costs to be factored in, such as visa applications. An EU employee’s capacity to remain long-term in the UK may also be affected.

There may also be limitations on the type of workers that will be allowed to seek employment in the UK. If we choose to follow a model more like the US or Australia, visas may only be granted for those in professions identified as having a particular need.

Other employment legislation changes

We also expect some piecemeal reform to specific areas of employment law, such as:

  • Clarification of the rules for calculating holiday pay and how holiday accrues during periods of long term sick leave, under the Working Time Regulations (WTR)1998.
  • There is on-going litigation regarding inconsistencies between the WTR and the EU Working Time Directive (which the WTR implements in the UK), creating wide-spread confusion for UK businesses and potentially significant accrued and on-going liabilities.
  • Whilst the UK government is unlikely to repeal current working time rules, it may well take the opportunity to clarify the rules around holiday pay and provide much needed guidance for employers.
  • Pro-business reform of agency worker rights, given the additional costs and complexities of engaging agency workers since the introduction of the Agency Workers Regulations 2010, which implement the Temporary Agency Work Directive.

Whilst the AWR gives agency workers limited equal treatment rights with comparable permanent employees from day one, following a 12-week period, an agency worker has a right to equal pay, working time and holiday with a comparable permanent employee. The extent of any reforms in this area will depend on the exit terms the government is able to negotiate.

KEY THINGS TO CONSIDER NOW

Understand the profile of your workforce. How many are EU citizens? How long have they lived in the UK? Do any have the right to a British passport that you can support?

If you are in a sector recruiting lots of EU nationals or likely to, consider accelerating any planned recruitment before changes are announced to the process. Much more likely that any existing arrangements will be allowed rather than unpicked.

If you are planning to expand into areas of Europe, familiarise yourself with local employment legislation and understand any opportunities to second staff from UK and vice versa.

If you would like to speak to an experienced employment advisor, please contact us.

www.amelore.com

 

Part 2 of our predictions for HR in 2016

In the second part of the ‘Key predictions for HR for HR in 2016 we continue with Bersin of Deloitte predictions for global HR in 2016, additional commentary by Amelore.

the chariotWe have already covered Digital HR; the rush to replace outdated HR systems; the Global rush to replace and re-engineer performance management; engagement, retention and culture as top priorities and the continuing mobility of career and talent and the investment in coaching and mentoring. Moving on we have…

  1. New models for learning

It’s all about the Four “E’s”

Education (formal training)

Experiences (developmental assingments and projects)

Environment (a culture and work environment that facilitate learning)

Exposure (connections and relationships with great people).

70/20/10 model – 70% through on the job experience and practice, 20% through other people by exposure to coaching, feedback and networking and 10% through formal education-based learning interventions.

  • Traditional LMS replaced by highly interactive, curated and recommendation approach to learning.
  • L&D professionals focussing on becoming ‘learning experience designers’ as opposed to ‘instructional designers’.
  • Employees leave organisations that do not develop them or provide appealing learning experiences.

Organisations are increasingly paring down their L&D team and using external expertise if they want to run face to face sessions.  Coaching is used more as is e-learning. Many organisations have developed a strong e-learning suite but enhance this with external providers.

  1. Diversity and Inclusion – merge with key business strategies to move well beyond compliance and become a strategic part of business.

This has been part of HR for 30yrs. But little impact. Now on Global CEO’s agenda due to global workforce. Lots of press about issue – unconscious bias etc

Deloitte studied talent practices of 1,400-plus companies with a focus on Asia. After nearly 2 years of research finding point conclusively that the highest performing companies with a far superior cash flow embed inclusion into talent practices everywhere.

In the UK last year, 2015, 75% of graduates were female.  Over a third of British households are now led by a woman earning more than her male partner or as the sole earner. House husbands are on the rise although support for men getting back into the workplace.  In the same way workplaces are geared towards supporting women working in part-time roles as secondary breadwinners but missing that many women are fulltime. Not always from choice (career women) but necessity. Just people with careers.

Organisations still have lots to do to truly embrace equality in the workplace. All male boards are all male boards.  They can’t hope to represent the workforce in the way a more balanced team would.  Likewise Unconscious Bias is alive and rampant in many recruitment practices. In many workplaces. PWC actually have a policy that women who work as receptionists have to wear 2-4inch heels. In 2016!

  1. People Analytics accelerate its growth

Companies are hiring head of people analytics, building teams and replacing HR platforms with a singular goal of creating a meaningful and useful database of information about their people.

New function is critically important. Just as Marketing can analyse the result of campaigns, create personas and segments of customer population and understand the drivers of market share success so companies are starting to be able to do for employees.

Emergence of behavioural economics leading to the application of ‘choice architecture.  Allowing employees to choose next steps – ie choice of 2/3 new jobs.  Turning traditional practices on their head.

HR teams are now becoming very data driven and the world of analytics is sweeping forward.

Many HR teams are led by people that don’t have these skills and consequently don’t set this as an area of focus.  Organisations are too used to poor quality data coming from the HR team that there is a failure to invest. In better technology. In staff with the skills to produce meaningful reports. So many businesses still have appraisal systems requiring manual interpretation by the HR team. This reflects an approach and a period of time long gone by.

  1. New breed of HR leaders enter the stage

HR profession is going through a true reinvention. Younger leaders starting to take over, heavy investment in technology, organisations sharing their creative solutions openly and critically the alignment of HR with the business is improving dramatically. Innovation is key and the function of HR is becoming increasingly important to companies.

Yet many still have Administrators or Policemen in charge with old fashioned or paper driven systems, under trained teams, organisation structures that appear bloated and misaligned and many have not figured out how to do analytics yet.

It is obvious that companies with talented HR leaders will be more competitive. Sharper. More focussed.

How can companies with the wrong HR support ever truly compete on the global stage?

We find many companies are unaware of how HR is changing and either have no-one supporting them or have the wrong level of support.

Conducting a review of your HR needs is a sensible action for any CEO.  Outsourcing HR needs, enhancing internal support, in-housing (hiring internally when you have had HR outsourcing support) and HR enhancement (additional services to compliment existing HR support) are all possibilities for fast growing and ambitious businesses.

Summarised from Predictions for 2016 – A bold new world of Talent, Learning, Leadership and HR Technology ahead. Bersin by Deloitte with commentary by Amelore.

 

Job evaluation scheme and gender pay audits

With the new requirements for organisations with 250+ staff to conduct a gender pay audit and publish results from 2018, many organisations are reviewing or implementing their job evaluation schemes.

Employers operate job evaluation schemes for a range of reasons, including the development of clear and orderly pay and grading structures and to help counter equal pay claims, as well to assist with market pricing where required.

A single job evaluation may be implemented to cover the whole workforce or employers may operate different schemes for varying groups of employees. The former approach is often favoured as this is likely to help counter any potential equal pay issues.

Types of job evaluation

There are two main types of job evaluation: analytical schemes, where jobs are broken down into their core components, and non-analytical schemes, where jobs are viewed as a whole. The use of analytical schemes is more popular because of the capacity to help provide a defence against equal pay claims.

Analytical schemes

These offer greater objectivity in assessment as the jobs are broken down in detail.

Examples of analytical schemes include ‘points rating’ and ‘factor comparison’ approaches.

Points rating – the key elements of each job, which are known as ‘factors’, are identified by the organisation and then broken down into components which may also be weighted. Each factor is assessed separately and points allocated according to the level needed for the job. The more demanding the job, the higher the points value.

Examples of factors commonly assessed include:

  • knowledge and skills
  • people management responsibility
  • communication and networking
  • decision-making
  • working environment
  • impact and influence
  • financial responsibility.

Factor comparison is also based on an assessment of factors, though no points are allocated. Use of this method is less widespread than ‘points rating’ systems as the latter approach enables a large number of jobs to be ranked at the time.

Non-analytical schemes

These are less objective than analytical schemes, but are often simpler and cheaper to introduce. Methods include job ranking, paired comparisons and job classification.

Job ranking -puts jobs in an organisation in order of their importance, or the level of difficulty involved in performing them or their value to the organisation.

Paired comparisons – compares each job in turn with another in an organisation. This takes longer than job ranking as each job is considered separately.

Job classification, also known as job grading. Before classification, an agreed number of grades are determined, usually between four and eight, based on tasks performed, skills, competencies, experience, initiative and responsibility. Clear distinctions are made between grades. The jobs in the organisation are then allocated to the pre-determined grades.

Developing job evaluation schemes

Whether adopting an analytical or a non-analytical approach, organisations have three main options over scheme design and development:

  • a scheme may be developed in-house
  • a consultancy’s off-the-shelf package may be purchased
  • a consultancy may tailor its package to suit the organisation’s needs.

The system selected will depend on the size of the organisation and the aim of the job evaluation exercise. The Hay Group’s Guide Chart-Profile Method is the most widely used scheme.

Other factors to consider

Job evaluation is a complex and time-consuming task and many organisations draw on the expertise of external organisations to help. The key issues to consider include:

  • The process is often as important as the results.
  • Job evaluation is an ongoing process.
  • An appeals procedure should be established before the evaluation begins.
  • Clear, detailed and up-to-date job descriptions have to be drawn up.
  • The more complex the scheme, the more detailed the job description needed.
  • Accurate records of decisions have to be kept.
  • The results have to be checked to see if there are any pay anomalies.
  • Effective communications are essential, as employees may have concerns over their future job grading and pay.

Operational considerations

Many organisations don’t have the skills in-house to conduct a Gender Pay audit or review or implement job evaluation schemes. The latter can be a big piece of work and organisations should not under estimate the time and cost implications.  Given we are half way through 2016 and first set of published results will be April 2018 time is tight to really get your house in order though still possible. 

Any company Job evaluation (and market pricing exercises) schemes need to be reviewed regularly to ensure such approaches continue to meet changing business needs. Job evaluation is an assessment of the role, not the person doing it, and should be based on a fair, transparent system that is effectively communicated and understood by employees.

The type of scheme chosen will depend on organisational needs, but any staff making decisions on job roles must remain impartial and may require training in the chosen system.

How can we assist you?

Amelore can provide both job evaluation and gender pay auditing services tailored to your needs.  If you would like more information, please get in touch with us.

www.amelore.com

Gender pay – How ready is your company?

gender equalityMore than four decades after the Equal Pay Act, the gender pay gap still stands at about 19%, with the average British woman earning around 80p for every £1 earned by a man.

In October 2016 the Government will introduce Regulations that require all companies with 250+ employees to carry out a gender pay review, and publish their data.  This has implications for the company’s reputation, its ability to attract and recruit staff and could also trigger equal pay claims from existing staff.

The Regulations will make changes to the Equality Pay Act 2010, and aim to “end the gender pay gap in a generation” (David Cameron). They will take effect from 1 October 2016 with the first reports needing to be published before 30 April 2018 and then annually by 29 April.

Getting prepared

Has your company ever carried out an equal pay audit? Do you know what your issues are and are you taking steps to resolve them?  If not, we strongly recommend that you consider carrying out an Equal Pay Audit this year ahead of the compulsory reporting dates so that you are not caught by surprise and can address issues early on.

A confidential Equal Pay Audit will:

  • Review and analyse gender pay
  • Identify any gaps and risks
  • Examine which objective justifications exist
  • Make recommendations for resolving areas of high risk.

Facts and Figures

The UK’s gender pay gap currently stands at 19.1% (Office for National Statistics, 2014) – forty four years after the Equal Pay Act was introduced – and lags behind the rest of Europe on 16.4%.

The new duties apply to private and third sector employers, employing 250 or more staff within Great Britain, and include limited companies, LLPs, statutory bodies and unincorporated associations.

Employers will have to provide and publish five items of gender pay information: the mean and median gender pay gap, the mean gender bonus gap, the percentage of men and women in the bonus scheme, and the distribution between men and women in salary quartiles.

The September 2015 Business in the Community Survey reported that 89 per cent of employees said they would feel more negatively towards their employer if the gender pay gap was relatively large in their organisation.

However if it was relatively small, 71 per cent would feel more positively towards their employer.

Do employers intentionally pay women less than men?

Not they don’t do this intentionally but they can often do it unconsciously.  Men are often much better at negotiating when they join an organisation. Women have the expectation that if they work hard and are good at their job so they will be fairly rewarded. Whilst this is true it is extremely rare for an employer or HR professional to review salaries with gender in mind.  If someone is earning less than they could or should, this is seen as operationally savvy and commercial. Good management even.

women high five

We have reviewed many employer data sets and observed stand out discrepancies which are explained away as historical, personality or line manager driven and as such no longer issues.  However if an organisation is paying a woman or women less than men in equivalent roles for no tangible reason, this will not only need to be rectified urgently but could result in resignations and a damaged employer brand and/or Employment Tribunal proceedings.

Benefits to the organisation

Pay is at the heart of the employment relationship, it influences how valued an employee feels and can act as a powerful demotivator if you get it wrong.

As an employer you will need to go public with your data, publish it on your website and upload it to a government website.

It is worth looking at the information early to assess what risks you are carrying and what measures need to be put in place over the next year to two before the first reports are published. Carrying out an audit now will help you comply with the law and good practice.

It is important that you feel confident that any analysis has been carried out reliably and that valid defences are understood or that indefensible issues are tackled so that you have fair, rational and transparent pay for your employees.

Understanding your risk profile and the measures to reduce these risks will protect your company from reputational and financial risks.

How we can help?

Amelore can conduct a gender pay audit and provide you with a report and recommendations now so you can address any issues before this legislation takes effect.

www.amelore.com

Executive Search and Recruitment Agencies – Do you know the difference?

recruitment posterHiring the right people is as significant to the success of a company as the business model and health of the balance sheet.

Recruitment is a highly lucrative unregulated and fast growing industry. It is important therefore for companies to understand the different options available to them, the costs as well as the benefits and any downside of the choices they make.

Some Key Facts

The CIPD (Chartered Institute of Personnel and Development) in partnership with Hays Recruitment, conducted a Resourcing and Talent Planning survey in 2015.

Resourcing and talent management in current economy “an employee’s market”

  • Half of CEOs have recruitment & talent management as a priority
  • Three quarters are recruiting key talent/niche areas
  • Growing demand for labour – more than half expecting headcount to increase
  • Skills shortages are escalating – four-fifths feel that competition for talent has increased
  • Lack of specialist or technical skills & lack of sector/industry or general experience were common problems
  • Organisations are increasingly required to be creative in both their search for candidates and the packages they offer

What is the difference between Executive Search and Recruitment Agencies?

The aim of Recruitment Agencies is to fill a position with the best available person. Recruitment agencies source from a pool of candidates that are actively looking for a new challenge by advertising on various platforms. This leads to a group of candidates that are “self-selected” of which the selection was not pre-determined by the company.

The aim of Executive Search consultants is to locate and recruit the best person, regardless of whether he or she is already employed or seeking a new position.

This approach can broaden and deepen the talent pool available to a search firm’s clients and places the control of who should be part of this talent pool, squarely in the hands of the client company.

There may also be the use of specialised psychometric tools, resources and skills to enhance the selection process.

The costs

Executive Search and Recruitment Agencies tend to charge a percentage fee or a retainer.

The percentage fee is based on the starting salary of the candidate and is normally payable once the candidate starts work with you. This form of charging is most common and if you don’t find a suitable candidate, you don’t have to pay the agency anything.

However, fees can vary from 8-25% depending on the agency and the salary. If you choose a retainer fee, it is agreed at the outset; with a percentage being payable upfront and the remainder due when the candidate starts their employment.

What are your recruitment options?

Your network – Many companies use their personal network to find staff and this can be very effective. However it can also lead to skills shortages and complications with personal relationships.

Advertising online – Companies may advertise via online sites such as Linkedin, Indeed, Monster, Fish4jobs etc  This has the benefit of advertising that your company is busy and hiring but can create a lot of administration.

Recruitment Agencies – You won’t have been in business long before the sales calls start.  When choosing an agency, try and get a recommendation and check their credentials. Anyone can set an agency up with no qualifications or experience. If things like diversity and inclusion are important to your company make sure you ask about this.

Executive Search or Headhunters – This is usually used for senior or specialised roles due to the cost. Finding a firm that understands and challenges you is worth a lot. Meeting a few firms and interviewing them can be helpful.

De-constructed recruitment – A key component of recruitment is identifying the passive candidate.  You pay a day rate for experienced researchers to find and speak to candidates for you.  A cheaper option but requires internal co-ordination.

Independent HR company or individual – Many experienced HR professionals have strong recruitment experience. They will often manage the process for you, even if you work with an external recruiter.

Common recruitment mistakes

Organisations in high growth mode often run very inefficient and costly recruitment processes with little thought for the candidate experience even though it is a seller’s market.  Multiple repetitive interviews, waiting until vacancies have been created to start a process and failing to assess candidates thoroughly are typical.

Looking ahead

It is important for companies to understand and cultivate their ability to read market conditions, trends, movement and fluidity in order to develop and manage effective recruitment strategies. Needs changes as companies grow and it is important to regularly review this.

Do get in contact if we can help you with your recruitment or retention issues.

Key predictions for HR in 2016

Amelore comment on the key predictions for HR made by Bersin of Deloitte. Here is the first part of two blogs with a summary of Bersin’s predictions and our observations.

  1. wheel_of_fortuneDigital HR arrives – we are not talking employee databases here. 8 million have smart phones, 3 billion use internet. Deloitte research says people check their phones 8 billion times a day!

The trend predicted is a design centric digital focus within HR. Apps will become king.  Clouds sit behind scenes. Traditional software will start to fade out. Any new technology need to be as easy as Facebook or Instagram to use.
Organisations are building HR platforms to allow rapidly built solutions, collect data and people and business process – easily. So they can quickly iterate & improve employee digital experience. Eg 2015 Sidekick Commonwealth Bank of Australia – brings together employees HR, collaboration, admin & support apps to their phones. 20,000 users in 2 weeks of roll out. V successful launch.

Think all my HR programs are apps…

“Of course the actual reality in many organisations is no HR database or something clunky that produces data that has inaccuracies.  When we talk to HR leaders about what technology they are investing in, it tends to be an HR system.

Because of poor organisational experience in the past there can be a reluctance to invest. Cross corridors into the Marketing department and you may see a very different picture.  Employees just like consumers are critical to the success of the business.”

  1. Rush to replace outdated HR systems

Why? To improve employee experience.  Harness people data. 60% of large companies are replacing software. Workday, SAP, Oracle, ADP, Ultimate Software, Cornerstone OnDemand, Ceridan etc are popular choices.

Offering solutions for recruitment, on-boarding, learning, performance, talent management compensation, succession, talent analytics.

The global trend is reduction of HR systems (average is 7) modernising with cloud technology sitting behind.

  1. Global rush to replace and re-engineer Performance Management

This is the hottest and most disruptive area of HR – redesign of performance management. 60% of companies are doing this.

Existing process too complex say 88% of managers.

End to end talent management market fairly mature – core HRMS, payroll with talent management module is a core tool on offer from many.

Trend is around check in’s, feedback, and more focus on development. Followship. Moving away from leaders. Building systems and tools to let people work flexibly and network.

“Many fast growing businesses have been practicing followship for a while. Younger and flatter teams without the traditional hierachy. And checking in with their staff. And with a development led focus which is a core retainer. 

In 2015 Amelore conducted some independent research into the cost and effectiveness of appraisals. Results varied but the core message was that it was a disproportionately costly activity at a time when organisations weren’t investing in staff development and losing them.  If you got rid of your appraisal process tomorrow and replaced it with a career development led focus you’d save money and retain more staff.”

  1. Engagement, Retention and Culture persist as top priorities

The job market is hot, hot, hot. Many scare skills are in scare supply, the economy is growing so the employment experience is highly transparent.

Open feedback is increasingly expected – 80% of millennials want to give their bosses an appraisal!  Employment brand a big thing. Staff engagement once a year surveys is old fashioned. Real time and continuous feedback is king.

There are 5 different types of feedback systems emerging:

Pulse survey tools – managers and HR rapidly take the pulse of the people’s feelings and opinions supplemented by annual survey.

Feedback apps – Employees can randomly provide an open suggestion box of comments that can be analysed, filtered, up-voted, down-voted & evaluated at any time.

Performance feedback systems – Give employees an opportunity to provide team or manager feedback as part of the performance management cycle.

New Work Environments – people work in teams through collaboration with tools (Slack, Workboard, Trello, Impraise) & give feedback immediately on anything.

Social Recognition Tools – Employees can give thanks, points & other forms of positive feedback to others in an open and social way.

Trend is towards letting employees “Like” or “Yelp” things at work which provides valuable data about work practices, safety situations, customer service issues and of course management.

“Some organisations are struggling with this new way of working particularly senior teams who seek to impose something that is more familiar to them. This gives the younger CEO the advantage that experience gives someone older.  Resisting large scale changes in the workplace is like attempting to type better internal memorandums as email emerges.”  

  1. Career and Talent mobility continues – investment in Coaching and Mentoring grow rapidly.

Investment in leadership is inconsistent. At highest level this is only £2,600 per leader per year. This is a very modest investment in great leadership.

Roles of leaders have changed. Spans of control have increased by 11 percent for lower-level leaders.  Todays leaders are ‘team leaders’ more than ‘top down executives’ learning how to lead cross functional global teams.

Approximately 50% of all leaders in every company are first or second line leaders – getting younger each year. Coaching and mentoring are therefore critical for their development.

New leadership model is followship – ability to set an example, empower and encourage others, drive change, alignment and inspiration.

Companies still far too attracted to old models of leadership inc long development times, slow progression & traditional HiPo (high potential) programmes. High performing companies promote young leaders at a highly accelerated rate and enable them to learn on the job.

“The smart money is on those with potential. Whatever their age. One of our clients Monica Vinader, who have trebled their turnover in the last 3 years and grown rapidly, have always identified and backed potential. A hallmark of their success has been the dedicated and hands on approach that both Monica and her sister Gabriela have shown in being very clear what is expected of individuals.  This has enabled a number of talented individuals to thrive and flourish along with the company.”

Summarised from Predictions for 2016 – A bold new world of Talent, Learning, Leadership and HR Technology ahead. Bersin by Deloitte with commentary by Amelore.

 

M&A – Assessing People and Cultural Fit

So many factors contribute to success in merger and acquisition (M&A) transactions — and many involve getting the right people into the right jobs. Unless the deal involves nothing more than physical assets — which is the exception to the rule of acquisitions in today’s global business world — the acquirer will need talented, high-performing individuals at all levels in order for the deal to reach its full potential.

Consequently, it is critical to assess the target company’s human capital with the same rigor that is applied to the assessment of pension liabilities, inventories, financial statements, and other significant assets. If we agree that people are ultimately a company’s most valuable asset and largely responsible for income generation and revenue growth, identifying and managing people risks and opportunities usually account for the difference between M&A success and failure. In many cases, however, acquirers know very little about the human capital — at least not initially — that may soon be part of their corporate families.

M&A transactions always trigger decisions about individuals. A merger, for example, often produces redundancies; suddenly there are two CFOs, two HR Directors and so on. The question is: Who should go and who should stay (even if in a different role)? In an acquisition, the acquirer must determine whether incumbents from the target are the best people for the job, given the objectives of the new organisation. Talent assessment addresses this important issue.

For each key position, talent assessment aims to answer these questions:

  • Can this individual successfully achieve the business strategy?
  • Has he or she demonstrated leadership that produces results?
  • What is the employee’s industry-specific knowledge?
  • How well does this person manage relationships?
  • Will this individual be able to work within our culture effectively?
  • Does he or she develop the talents of key subordinates?
  • How long will this person stay and remain motivated?
  • Are there any reasons for concern about stability or volatility?

Pre-close pressure

Talent assessment can be completed at any time, but the more information an acquirer has before signing a letter of intent or closing the deal, the better. For many practical reasons, however, this almost never happens. Time is insufficient. Data from the target are spotty or unavailable. Or the target will not give access to its key people. As a result, a big part of talent assessment tends to be done after the closing, when the acquirer has full control.

Thus, organizations should do whatever they can to overcome these barriers as early in the deal as possible. While a full, formal assessment may not be possible in the early stages of a deal, many actions can be taken to begin the assessment process and get an early read on people and potential deal risks that allow for an early determination of whether to proceed with the deal or walk away.

These include observing behaviour during management presentations and meetings, reviewing CVs provided in the data room, conducting internet searches (or “desktop” research), and conducting informal operational or functional meetings as part of the due diligence process.

The target’s deal team can begin compiling a list of business, leadership, and other behavioural attributes that begin to tell the story of whether a key or critical employee will fit into the go-forward organisation or kill the deal.

The figure below describes the assessment approaches and tools that can be utilised for a systematised approach to talent assessment that will ensure thoroughness and save valuable time.

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In our experience, there are five steps in the process.

  1. Clarify the business imperative

Always begin with the objectives of the deal and expectations for the new organisation. Talent, after all, must be measured against its potential to fulfil those expectations. A clear understanding of business objectives should guide the assessment. For example, is quick turnaround of the business needed, are growth objectives very high, or is the acquisition in a stable environment that will need little change?

  1. Define the essential success criteria

The next task is to define the success criteria required by the business objectives. Those criteria typically involve skills, knowledge, behaviours, experience, values, and — for executives — leadership ability and strategic thinking.

For example, to fill the CEO position at a target company, it is important to determine:

  • The level and scope of experience required to successfully lead the organization, depending on its size and complexity.
  • The technical skill/industry knowledge required for success in this position.
  • The intensity of ambition, commitment, and personal interest a person must demonstrate in order to achieve the defined business objectives.
  • The balance of strategic and operational focus needed by the ideal leader.
  • The leadership style and fit with culture and core values

Culture is an important part of this step. The acquirer should define the workplace culture it wants its key people to embrace and demonstrate through their behaviour.

In many instances, acquirers want people whose values are compatible with their culture. They know that conflicting values will make for a bad corporate relationship and impair the deal.

  1. Develop role profiles

In this step, the assessment moves from the general to the specific, documenting the success criteria for each position in terms of job scope and responsibilities; required skills, know-how, and behaviours; and experience the ideal candidate brings to the table. Based on conversations with the acquiring company or hiring managers, the assessment team identifies the level of responsibility and job requirements for the target roles.

From this it identifies the requisite skills, knowledge, and abilities necessary to carry out the role requirements to their fullest extent. In addition, the team examines what experiences have helped other successful individuals in the past that are relevant to the current situation. This enables the creation of a robust, defensible, and detailed description of the requirements of the target roles.

  1. Assess the talent pool

The first three steps set the stage for the detailed work that follows, gathering whatever relevant data are available on candidates for each key position. The goal is to give decision-makers the information they will need in selecting the best people for each role. These data are gathered by interviewing the board (in the case of CEO talent assessment), hiring managers, or others involved in the acquisition and by gathering any past performance information that is available.

For executive and director/manager positions, the typical selection criteria include leadership ability and leadership style, alignment with the culture of the new organization, potential for future personal development, cognitive ability, and motivation. For professional positions, selection criteria are more geared around specific skills and experience in the job; thus, assessment is heavily weighted toward professional competency, work history, past performance, and future skill-development potential.

  1. Review and select talent

The results of the assessment are presented in detailed reports to decision makers, who use them for review and selection. The quality and extensiveness of these results go a long way toward ensuring the full value of the deal.

CONCLUSION

Indeed, M&A transactions are full of risks and opportunities, and many of those reside in the target company’s human capital. Because of this, it is essential to thoroughly evaluate key and critical talent with focus, rigor, and honesty, beginning as soon as possible and continuing throughout the deal phases.

The consequences of getting people decisions wrong could be the difference between winning and losing in the marketplace — something no company should risk in today’s highly competitive market and volatile economic environment.

Strong HR in a High Growth Business

Research from the CIPD has shown that HR has a vital role to play in driving long-term performance in SMEs, whatever stage of growth the organisation is at, and whether or not it has a dedicated HR function.

The research report (Sustainable organisation performance through HR in SMEs published in 2013) identifies six key insights which can help HR managers – or those responsible for HR – anticipate and respond to the people-related challenges that will inevitably arise as the business grows.

Read on to see if these resonate in your business.

  1. Anticipation is key:  HR needs to have a clear understanding of where the business is headed.  They need to be deeply familiar with the strategy, vision and values, so that they can anticipate key stages of growth and transition and plan for any necessary shifts in the way HR challenges and processes are managed.
  1. Values and purpose should be the bedrock of the business.  One of the biggest challenges facing SMEs is how to retain the heady excitement and ‘family’ feel of the early days.  HR has an important role to play in preserving the vision of the founder or leader and embedding it in all aspects of people management.  Are people engaged with the overall purpose of the business and clear about how they fit into the bigger picture, for example?  If innovation and creativity are valued in the business, are there mechanisms in place to reward employees demonstrating these behaviours? Make sure HR processes are set up to reflect the way the business wants people to work on a day-to-day basis and are not time consuming or complicated.
  1. HR and business strategies need to be aligned.  In the early days, it can be difficult for HR to make itself heard in an SME.  Owner/managers often see it as something they ‘have to do’ rather than a strategic tool they can use to support business growth.  HR needs to work hard to demonstrate that well-thought out people processes can play an important part in building the high performance the business needs if it is to sustain long term growth.  Having up-to-the-minute information about everything from head count to available skill sets is a good way to build credibility and get your voice heard.
  1. Keep processes simple.  As an SME grows, it inevitably needs to move to a more structured approach and to introduce more formal people processes.   It’s important, however, to find the right balance between structure and fluidity so that agility and entrepreneurial spirit are not stifled or undermined by bureaucracy.  Many Office Managers given HR responsibility will implement inefficient and out of date practices due to lack of training or the desire to create a job for themselves. Many processes should become automated.

The latest HR software allows employees to access and update their own data – and makes it much easier for line managers to manage processes such as holidays and absence.  It cuts down on the paperwork, ensures consistency and makes HR processes simpler and more transparent.

  1. Strike the balance between preservation and evolution.  As the business grows, it’s important not to be sentimental about what has always been, and to let go of processes or aspects of the business culture that no longer support its vision or priorities.  In today’s environment, for example, highly formal team meetings are often giving way to more immediate and engaging forms of communication.  Likewise annual appraisal processes are increasingly being replaced with a constant feedback loop and a greater focus on career development. SMART objectives are now seen as a bit silly.
  1. Lay the foundations for the future.  In a busy SME, it can sometimes be difficult to see beyond the immediate operational issues.  HR people in small businesses often find themselves caught up in a relentless cycle of recruitment as the company grows, and barely have time to lift their heads to look at what strategies they should be putting in place to prepare for the future.  Make sure you are not getting so caught up in short term solutions that you are missing golden opportunities to support longer term goals. Sow now what you later want to reap.

The way forward

What HR strategies are you employing to support growth in your SME?  How do you manage to make time for the strategic issues? How scalable are your current practices if you continue to grow at the rate you have?

If you are planning a lot of recruitment when did you last review your recruitment and attraction practices, your employee benefits package, how you manage talent?  No point in putting lots of effort into recruitment if you have a revolving door straight back out to your competitors. Both expensive and a waste of your time.

Whilst your business may not need a full-time senior HR practitioner, working with someone flexibly to help set the direction internally and pin down your strategy for how you handle the people side of the business just makes good business sense.

More about the Immigration Bill

The Immigration Bill 2015-16, which is currently working its way through parliament, is intended to clamp down on illegal immigration, tackle the exploitation of low-skilled workers and punish those that facilitate this exploitation. Small business owners need to be alert to developments in order to avoid severe punishment heavy fines.

While employers are already required to prevent illegal working in the UK by carrying out relevant document checks in accordance with guidance from the Home Office, the new Bill will provide immigration enforcement officers with considerable more powers and also increase the penalties handed out to businesses who fall foul of the law. The government already publishes lists of companies that are served civil penalty notices, thereby ensuring maximum damage in both monetary and reputational terms.

Small firms and startups that employ a considerable proportion of low-skilled workers, for example retailers, independent hotels, restaurants, pubs, coffee shops etc. should start preparing now because the repercussions of failing to ensure that there are no illegal immigrants amongst a workforce will be severe. If the Bill progresses without any problems, as anticipated, it will become law by July 2016.

What are the main changes?

For small business owners the most significant proposals are the additional powers that will be given to immigration enforcement officers.

Firstly, the Bill will enable officers to seize the earnings of anyone found to be working illegally. Naturally, this will affect an employee more so than the actual employer but the Bill will also tighten the rules that determine if a worker has been employed illegally. Not many business owners are aware of the criminal sanctions related to illegal working as the Home Office often publicises the £20,000 civil penalty scheme on the basis that it is easier to administer.

Currently, an employer commits a criminal offence if they knowingly employ an individual who did not possess the relevant permission to work in the UK. This is being amended slightly so that an employer may still be guilty if there was “reasonable cause to believe” that a person was an illegal worker. There has also been an increase in the maximum sentence period from two years to five years (upon conviction on indictment).

The Bill will also enable immigration enforcement officers to shut down any business suspected of wrongdoing for up to 48 hours and there is the potential that closure could be extended should the appropriate court order be obtained. Immigration officers will also have increased powers to search a business premises and seize documents should they believe those documents to be related to suspected illegal activities such as suspected illegal working.

The consequences for employing illegal workers were always serious but the new proposed measures add a new level of severity to the situation.

What are the most likely pitfalls?

All of the above proposals are centered on the notion that employers should bear responsibility for who it is they employ and the status of those individuals.

The difficulty that employers face is the ever changing nature of the right to work checks, and so mistakes will inadvertently happen. This is particularly the case for smaller organisations who do not have the luxury of an HR or compliance officer.

There are a number of common pitfalls which can trap employers:

  • Employers forgetting to record the date on which a check occurred – this can be done on the actual photocopy of the document or noted on an internal or on-line HR system.
  • Employers forgetting to make follow-up checks at the correct time – important to diarise when checks should happen.
  • Additional checks are required if the employee is a student with work restrictions. Employers must also obtain, copy and retain details of a student’s academic term and vacation times so that employers can ascertain independently when it is that a student can work full time
  • Employers frequently get caught out by not retaining evidence of their checks for the necessary period of time or by not retaining copies in a secure manner (i.e. an unlocked cabinet in an unlocked office)
  • Photocopies are unclear or not complete. Historically a partial right to work check would be considered a mitigating circumstance but this has since been done away with meaning that a correct check is now more important than ever before
  • Employers can also enter into difficulties by conducting a right to work check after an employee has already started work. All initial right to work checks must be conducted prior to the individual commencing work.

Employers now front line immigration control

The attempts of the Home Office to simplify the right to work checks as well as the desire to make it harder for illegal migrants to work in the UK has resulted in employers being on the front line of immigration control in the UK. Most employers who receive a civil penalty notice only do so due to poor and weak practices – all of which can be avoided with some training and careful planning in advance of the new requirements becoming law.

As always having strong HR procedures that are regularly reviewed will provide a solid foundation for your business to grow. If you are unsure how up-to-date or good your existing practices are, why not get someone external to conduct an operational review? Many employment lawyers offer a legal compliance review and HR consultancies will check that as well as designing and implementing suitable practical procedures if required.

Not making the right checks and potentially employing someone illegally is an extremely serious matter which will be both distracting and damaging to you and your business. Avoid this by getting ahead now and making any necessary changes.