PROSPECTS FOR 2008
CIPD provides barometer for UK plc
Each year, the Chartered Institute of Personnel and Development (CIPD) conducts numerous pieces of research, surveys and other reports and the findings are pulled together in its annual barometer report.
The report aims to draw out common themes and highlight emerging trends with the latest version published in January 2008. The result is a useful overview of all aspects of HR policy and practice. By reflecting on its past findings, the CIPD also provides what it calls its “radar check for HR” for 2008.
%ADVERT%
A useful guide, it predicts weaker economic growth, a slowdown in the expansion in jobs, a pay squeeze and perhaps a revisiting of the hard times of the 1990s. To help prepare for such hardships, the report also provides a checklist of ways in which companies can prepare.
CIPD surveys
The barometer report draws on CIPD surveys that focused on a number of different areas facing HR practitioners including:
recruitment, retention and labour turnover
reward management
learning and development
absence management
diversity management
managing conflict at work
changing HR function.
A summary of its main statistics taken from all the reports can be seen below.
Findings from the 2007 CIPD surveys
Recruitment and staffing
Labour turnover: 18.1%
Organisations making ten or more staff redundant: 24%
Organisations experiencing recruitment difficulties: 84%
Organisations experiencing retention problems: 78%
Reward management
Organisations with reward strategy: 35%
Organisations using individual pay rates/ranges/spot salaries: 44%
Organisations using broadbands: 40%
Organisations linking salary levels to market rates: 51%
Employers with bonus or incentive plans: 70%
Organisations offering private healthcare: 60%
Learning and development
Training budget spend per employee: £272
Training days received per employee: 5.0
Absence management
Absence: 3.7%, 8.4 working days per employee
Cost of absence: £659 per employee per year
Organisations using some form of incentive system to encourage attendance: 17%
The 25-page barometer report includes chapters looking in more detail at each of these subjects before providing a final section that explains the implications for 2008 for each one.
In summary its conclusions are set out below.
Pay outlook
With higher fuel costs and food prices set to raise the cost of living in the first half of 2008, the CIPD says that the squeeze on real incomes experienced by many workers in 2007 will continue to bite and could intensify.
The CIPD/ KPMG Labour Market Outlook surveys offer no indication that workers will be any more likely to achieve above-inflation pay rises this year than last.
On the contrary, the slackest labour market conditions in a decade, plus employers’ needs to contain costs, is likely to limit average pay rises to at best 3% in 2008.
Public sector efficiency and performance
The next few years may feel like a period of fiscal austerity while total public spending is planned to rise in real terms by 2.1% per year during the period covered by the 2007 Comprehensive Spending Review (2008/09–2010/11).
The planned 2.1% growth in total spending itself assumes 3% efficiency savings across government – in order to release resources for priority areas – including 5% a year real-term reductions in administrative budgets.
This is already posing a significant challenge to public sector HR and will continue to do so with spending constraints intensifying the jobs and pay squeeze felt by public sector workers.
The public policy agenda
In terms of specific work-related public policy issues, 2008 looks like being another busy year, with important developments likely on flexible working, managed migration, skills and pensions.
In addition, decisions in Brussels could have big implications for UK employers.
Employment law
An Employment Bill intends to improve enforcement of existing employment law and to introduce measures designed to increase the speed with which workplace disputes are resolved.
This in effect means that the government is revisiting the statutory dispute resolution procedures introduced as recently as 2004.
The CIPD’s current position is to support the Bill, which will help protect vulnerable workers and reduce unnecessary bureaucracy in resolving disputes.
Flexible working
On flexible working the government has asked the HR director of Sainsbury’s Plc, Imelda Walsh, to undertake a review of the existing right of parents of very young or disabled children and people with broader caring responsibilities to request to work flexible hours.
The CIPD’s current position is to argue that the right to request should be extended to all employees, not just parents and carers.
How firms should be reacting
Based on this situation, the CIPD provides a checklist of advice for employers to use to help deal with the challenges faced in 2008:
Get started on designing a usable armoury of human capital metrics.
Better measure the effectiveness of HR policies and the HR contribution.
Obtain greater value for money from reward budgets.
Improve recruitment and retention practices without increasing costs.
Ensure redundancy practice is consistent with anti-age discrimination legislation.
More effectively reorganise working methods and help line managers get better at delivering on a “smart work” people management agenda.
Raise the standards of employee communication, involvement and engagement by means of web-assisted interactive technologies.
A final word
When describing the outlook for HR in 2008, the CIPD barometer report says:
“2008 will be a year in which HR professionals will have to cope with a variety of intense short-run pressures while also staying focused on the long-run challenge to become more business-savvy, to get better at demonstrating the value of people management practices to organisations, and to keep attuned to the needs and aspirations of people at work.”
Want to know more?
Title: Barometer Report, Chartered Institute of Personnel and Development.
Availability: Copies of the CIPD’s survey reports can be obtained free from its web site at www.cipd.co.uk/surveys.
For the Barometer Report visit www.cipd.co.uk/subjects/hrpract/general/overofsurvs.htm?IsSrchRes=1.
The Chartered Institute of Personnel and Development (CIPD) has more than 127,500 members and is the “leading professional institute for those involved in the management and development of people”. For more details visit www.cipd.co.uk.