Analysing the upcoming challenges HR is facing

Challenges
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Ben Willmott
Head of Public Policy
CIPD
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April is upon us, and as the clocks have jumped forward we’ve also entered an important period of time for HR professionals. Gender pay reporting has arrived, the minimum wage is changing and the apprenticeship levy is being rolled out.

These changes will raise challenges for some organisations however they also provide opportunities to improve transparency on pay, optimise investment in apprenticeships and focus attention on addressing low pay and boosting productivity.

Gender pay

Louis Brandeis, who sat on the Supreme Court in the United States between 1916 and 1939, once said that sunlight was the best disinfectant. By promoting transparency, and making people and organisations responsible for what that transparency exposes, we can drive positive change.

That is partly the thinking behind new regulations that will require companies with more than 250 employees to publish their gender pay gap.

The World Economic Forum has said that at the current rate we’re going, the gender pay gap won’t close for another 170 years.

It’s important to remember that the gap itself may have nothing to do with pay, but instead be driven by how an organisation promotes and retains female talent.

I don’t know about you, but that feels like an awfully long time, especially considering that we’re fast approaching the 50th anniversary of the Equal Pay Act 1970.

Publishing the figures is just the first step...

Organisations, and HR professionals especially, then have to ensure that they create a clear narrative that explains not only what their gender pay gap is, but the context for that gap and, crucially, what they’re going to do about it.

The direction of travel is more important than what the data says in year one, and it will be the impact of the HR and people management policies that organisations put in place in response to gender pay gap reporting that will decide if the policy is ultimately a success.

It’s important to remember that the gap itself may have nothing to do with pay, but instead be driven by how an organisation promotes and retains female talent, or by wider sectoral shifts that have made it more difficult to attract women to a profession.

While the latter may feel like it is outside our control, and a wider societal issue, it becomes even more vital that we use the opportunities presented to us to help forge links that will help organisations expand talent pipelines.

For example, in its recent Labour Market Outlook study, the CIPD found that just 5% of employers say their organisation has developed closer links with schools or colleges as a means of improving gender balance. We talk repeatedly about the future of work being built around human creativity, and it is that same creativity that will help us take the opportunities presented to us by these changes.

This represents a huge change in terms of how we monitor gender equality in the workplace and while some organisations may have been tracking gender pay for years it may be new to others. That’s why the CIPD has produced a guide to help organisations through the reasoning behind it, and the technical aspects of it.

The real opportunity though is for HR professionals to find creative solutions to whatever the sunlight might expose.

Apprenticeship Levy

The CIPD has long argued that more needed to be done in order to promote apprenticeships as a career path, ensuring that people leaving school have the option of a meaningful, high-quality vocational pathway into employment. By promoting alternatives to university, we can expand our skills base and ensure that young people are presented with a genuine choice from the outset.

The Government have set a target of 3 million apprenticeships by 2020, and is introducing the apprenticeship levy to help to fund them.

What the levy means in practice is that from April 6th 2017, all UK employees in the public and private sector with a pay bill over £3m will have to contribute 0.5% of that bill into a pot.

Estimates suggest that this will affect less than 2% of employers in the UK, but it’s important for all HR professionals to look at how they are supporting apprentices in the workplace and how they might be able to access the new funds available.

Concerns have been raised, not least from CIPD research, that the levy has been introduced on a timetable that has not left businesses enough time to adjust and that it is not flexible enough to address organisations’ diverse training and development requirements.

In order for the levy to be successful, funding needs to help boost the creation of high quality apprenticeships, without taking money away from other equally important forms of training and development.

It’s therefore crucial that HR professionals remain vigilant and on top of any problems that might emerge in the very early stages of the process, either in terms of how they access the fund or what effect it has on their existing training and skills provision.

By ironing out problems early, we can all ensure that apprenticeships grow in quality as well as quantity and start to be regarded as a meaningful alternative to university.

In order for the levy to be successful, funding needs to help boost the creation of high quality apprenticeships, without taking money away from other equally important forms of training and development. CIPD will be monitoring closely the effect of the levy and talking to members about their experience so we can report back to Government if there are recommendations we can make to improve its operation.

As with gender pay reporting, the CIPD has resources available to help HR professionals navigate these changes, as well as a helpful dos and don’ts list for those who might be looking at utilising the apprentice route for the first time. Organisations should relish the opportunity to look at how training and skills are being delivered in their organisation, as big changes often give us the space we need to evaluate properly.

Over time, we hope that the levy will help to raise the ambitions of employers to invest more in high quality apprenticeships and to ensure that education and training providers are helping learners to develop the skills they need both now and in future.

Seizing opportunities

These two big changes come alongside lots of other changes, such increases the minimum wage and changes to statutory sick pay.

While changes of this scale can seem daunting, they also present a fantastic opportunity to organisations to look again at how they are doing things, from a skills and training element all the way through to their workforce planning and recruitment.

HR has never been more important in the workplace, and by seizing the opportunities provided to us by these changes, we can all help to shape the future of work and make sure that we continue to build stronger, more resilient organisations that will help to deliver better work and working lives for everyone.

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24th Apr 2017 22:24

Another big challenge that HR is facing is preparing for the mass exit of baby boomers while developing leaders to fill these roles in younger generations. Over 10,000 baby boomers will retire each day over the next day, causing the "silver tsunami". Organizations will have to focus on preparing new leaders to fill the large skills gaps created by the silver tsunami.

Read more about our research on why leadership development is important here: http://careerminds.com/blog/importance-of-leadership-development

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