
The year 2011 represented something of a seismic shift for HR, as the ramifications of the Equality Act, abolition of the default retirement age (DRA) and new legislation for Temporary Workers all brought their challenges. However, 2012 promises to be just as much - if not more - of a watershed. The combination of constant technological innovation, continued social change and even more workplace legislation will add further impetus to the HR Revolution.
So what can practitioners expect to be the key areas for HR in the New Year? We asked Steve McNally of the Work and Inclusion consultancy Equality Law, to give an overview of what to expect.
Employee engagement
Employee engagement will get even closer to centre stage. Given its comparative dominance in HR circles over the last few years, it could be argued that “employee engagement” is a wee bit ‘yesterday’. This couldn’t be farther from the truth. Only now are organisations fully embracing the importance of engagement to employee performance and productivity. This means that companies’ boards and executives are only now looking beyond survey results to what they need to actually do to respond appropriately to survey findings and meet employee needs. So expect more innovations that help make engagement happen, such as rewards programmes that actually give employees the type of rewards they want, at no extra cost to the organisation but of greater value to the employee.
Isn’t this a rather perverse prediction, given the dark economic clouds that appear to be gathering for 2012? Not at all. A quite startling set of statistics has just been released by Mercer. In late 2011, its global research - which had more than 10,000 employees responding - found that 32% of employees are “planning on leaving” their employers (as opposed to just 19% in 2009).
It appears that much of the workforce is simply “hanging on to their jobs”, waiting for the economy to recover - then jumping ship. That’s the problem: low engagement leads to low employee performance.
Social media
The year 2011 was the year of ‘social’ - social recruiting, social rewards, social learning, social performance management and social career management. ‘Social’ will be the biggest buzzword of 2012, closely followed by ‘mobile’. Your Employees are already interacting through social media. And you’re probably utilising social as an effective recruitment tool. It’s an obvious step to make it possible for employees to recognise each other through a social platform as well. In 2012, we will see the practices of ‘social’ start to revolutionise rewards and recognition, as well as learning, performance management and even career management.
For most HR functions the starting point is recruitment. Some 66% of HR professionals rely on LinkedIn to headhunt individuals and fulfill roles, according to Paul Ashford, operations director at online HR software provider Vaado Software, while Facebook is used to actively promote a company’s profile. “Individuals looking to work within a particular organisation can log on and see what the company is about, have access to images and videos and generally get a feel for the company structure.”
But this is beginning to change. “Organisations are definitely moving beyond having a quick check on Facebook and starting to be more structured and systematic,” says Chris Phillips, VP EMEA marketing for talent management firm Taleo.
Looking beyond recruitment, the key opportunity for HR is to exploit social media’s credentials as a communications medium. It could transform communications in a change management programme, for example. “Traditional management of communications is one way. This is a way of engaging people involved in that change,” explains Stephen Brooks, specialist in people management, PA Consulting Group. “You have to think about whether social media could help you engage with people you need to change and get messages over in a better way and make communication more continuous. Most change management programmes make a big communication at the beginning, and then there’s nothing.”
Instead, companies can easily keep people informed with short messages and updates. Rather than go through focus groups, the company will then get instant feedback about what people really think. Although that may well turn up some unpleasant comments or awkward questions, it is better to have them in an open forum than people festering resentment in private or complaining to people outside the organisation. Brooks also points out that such open forums tend to be self-moderating. “When people whinge, other employees will say no that’s not right,” he says. “Work is a society and if you behave badly, your peer group will take against you.”
So in 2012 use ‘social’ for what it is: a universe in which you can communicate, influence, learn and drive development.
Performance management
Performance management will turn upside down. Talent management guru Josh Bersin expects the world of performance management to be “turned upside down” in 2012, with an increasing number of companies recognising the need to “rethink their traditional (often hated) performance appraisal processes”.
In 2011, Bersin and his team discovered that companies which regularly revisit their goals (quarterly or even more often) dramatically outperform those which create annual cascading-goal programmes. The dynamic nature of modern business makes it necessary for performance management to become “agile” and “real time”.
So what is “agile” performance management? The concept is very similar to agile software development - rather than put the manager in the middle of the appraisal process and use a “waterfall” approach which reviews employees once per year, it creates a more continuous, dynamic and transparent model of feedback”, explains Bersin.
“Companies that revise and update goals quarterly generate more than 30 per cent greater impact from their performance management processes than those which implement the old-fashioned annual review." Josh notes that the single most valuable thing you can do to improve performance is to improve the quantity and quality of feedback.
Embracing diversity
From the rallying cry of the Lord Davies report calling for more women to join British boardrooms, to the abolition of the official retirement age, inclusion and diversity has been in the full glare of the media spotlight over the last year.
Firms that do embrace diversity can reap rich rewards. A 2010 Harvard Business Review study found a direct link between business success and a commitment to diversity. Those identified as the top 50 diversity organisations saw net profit margins outstrip their peers by 2.7%.
As Peta Latimer, a senior consultant within Kenexa Leadership's Diversity & Inclusion group says:
“Every time you talk to someone that’s different, you get different ideas.”
Gender first?
For those firms that are tackling diversity issues, gender has been top of the agenda. But this is only one of the nine protected strands under the Equality Act. This year should see companies view diversity more holistically rather than picking out one specific group for special treatment or targeted initiatives. By focusing on one area - promoting women to the board for example - there’s a danger of fostering resentment among other workers. It should always be the talent that rises to the top, but companies need to broaden the ways to get to get there. For example, those people wanting flexible working shouldn’t be viewed any more negatively than those who work late in the office every night.
HR professionals should act by monitoring the diversity of their own workforce and people suggested for promotion and look at what their competitors are doing. HR professionals should also be increasingly aware of the importance of tackling the issue of unconscious bias. We all have prejudices; it is simply human nature. We cannot help but make unconscious judgements about people, which can affect who we recruit or how we deal with people in the workplace. Many studies into middle managers and performance showed that line managers favour people like themselves.
By recognising our unconscious bias, line managers and companies as a whole can create more diverse teams of workers and ensure that more diverse groups of people are promoted.
“We all tend to recruit people like us,” acknowledges Latimer. “HR should be pushing ‘objective recruitment’. Inclusion should be part of the fabric of the company”.
Managing generation challenge
Two years ago, the number of people over 65 outstripped those under 16 for the first time. The abolition of the Default Retirement Age means that older workers are likely to stay working for longer, either through choice or economic necessity. Meanwhile, Generation Y-ers - the Facebook generation - are entering the workforce, with their focus on social media and instant gratification and their anti-authority stance.
This presents a challenge: how do you manage the aspirations and needs of these very different groups, and ensure both parties - and all other age groups in between - work together harmoniously? In fact, employers need to be addressing the 4-Generation Challenge, as Gen Y, Gen X, BabyBoomers and the Veterans all take their place and remain in work longer than ever before.
“The demographic mix found within departments today has never been more diverse. This brings as many challenges as benefits. Prospective areas of friction can include education styles, language, relationships with technology and even where people are in terms of their career goals,” says Ruth Jacobs, operations director for Randstad business support.
An end to the obligatory retirement at 65 requires companies to make subtle adjustments to help those older workers remain productive and stay focused. Rather than seeing this group as coasting towards retirement, requiring neither training nor fresh challenges, managers - with a helpful nudge from their HR departments - need to think about the needs of this group and how to keep them motivated. So this could mean conversations about reducing work hours, working flexibly, or training to help them do their jobs better.
Ultimately, age should not be the issue: it’s skills that count. Ensuring all staff have the right skills to match business goals is the key. Managing the 4 Generation Challenge to achieve that will be central to HR success in 2012.