A new government will be formed within the next five months, and with it will come a raft of new policy initiatives. Guy Sheppard finds out what would most benefit HR, and what would cause the profession the most difficulties.
The party manifestos remain unpublished and the polling date has yet to be fixed, but the 2010 general election will clearly be a political watershed whoever wins.
With more than 120 sitting MPs standing down following the expenses scandal, and many more likely to be voted out, the new parliament will be one of the most inexperienced in decades.
That could limit the amount of talent available to the new government, which may be further hamstrung if no one party gains overall control. Opinion polls indicate the Conservatives have a clear lead over Labour, but they may not win an outright majority. This would probably leave the Liberal Democrats holding the balance of power in a hung parliament.
The election will also signal a new direction in policy because, whoever forms the next government, decisive action will be needed to cut the UK’s budget deficit of £178bn. The time for spending cuts and tax increases to reduce this figure cannot be delayed indefinitely and, when implemented, the impact on business and HR will be far-reaching.
The election deadline is Thursday 3 June, but voting could be just a few weeks away if Gordon Brown opts for an earlier poll.
Here, a cross-section of HR leaders and commentators discuss their main hopes and fears for the next government.
Duncan Brown (left), director of HR business development at the Institute for Employment Studies, is concerned that hard-won gains in the public sector will quickly be sacrificed in the drive to cut public spending.
“Over the past four to five years, the government has made huge strides in talent management and succession planning. If this progress went out of the window in the rush to hack cost out, you would do a lot of long-term damage”.
Brown says lessons can be learned from the way the private sector has avoided a blanket freeze on pay and recruitment in response to the recession.
This view is echoed by Alan Warner (right), lead officer at the Public Sector People Managers Association (PPMA). “I’m not saying we don’t need to save money, but it’s how you go about it,” he argues. “What I would hope for is something that facilitates a bright and exciting future for young people. I get very concerned about discussions about a lost generation of graduates coming forward and not enough jobs of the right kind.”
David Coates, associate director of policy at The Work Foundation, wants the next government to embrace the idea of fulfilling employment as well as full employment. He believes this can be promoted through government job creation initiatives, as well as by applying pressure on businesses that form part of the public sector supply chain.
Paul Kearns (left), author of several books on HR strategy, worries that cost-cutting will take little account of the long-term consequences. He believes public sector pensions illustrate the need for a more considered approach to saving money. “I would like someone to stand back and say ‘yes, we’re going to cut the cost but we must revisit the whole relationship with employees and look at their complete reward package’. I am not expecting government to grasp that, but that is what is really needed.”
Bryan Finn, partner at Business Economics, takes a markedly different stance, arguing that HR’s overriding consideration should be which party will safeguard jobs and the economy. He believes Labour should pay the price for making “crucial errors” before the recession started. “We were not best placed to weather it because we had overspent in the years going into it,” he says. “I genuinely think that a new government coming in would have a better plan to sort out the deficit.”
Although supportive of some Liberal Democrat economic policies, Finn fears that if the party formed a government with the Conservatives, it would undermine confidence in the government’s ability to deal with the spending deficit. “The uncertainty caused by a hung parliament could be a worry.”
For business process outsourcing company Capita, the squeeze on public spending represents an opportunity. Alan Bailey (right), managing director of the company’s HR and payroll services, explains: “There is plenty of proof out there that a whole range of outsourcing in the public sector has taken cost out while improving service levels.”
He argues the new government needs to make outsourcing more flexible for the public sector to reap the full cost benefits. Although supportive of TUPE (Transfer of Undertakings Protection of Employment) regulations and the need to prevent underpayment of staff, he says: “You are left with a legacy of public sector workers that you can’t do anything about. It keeps the legacy cost there on an ongoing basis.”
He also argues that the tendering process for outsourced work is too unwieldy, and the specifications imposed on the way it is delivered are frequently too rigorous.
Stephen Moir (left), director of people and policy at Cambridgeshire County Council, says cost cutting in the public sector would be helped if the extra responsibilities imposed on it as an employer were eased. “Being singled out as a different employer creates additional cost. Whichever party is in power, their challenge is to reduce public sector costs.”
Adrienne McFarland, HR director at business software company Sage, wants to see the risks and liabilities associated with employment re-balanced, arguing there has been a marked shift in favour of employees over the past 12 years.
“It is widely known that since the legislation changed a few years ago, the number of grievances has increased everywhere.”
She says there is now a tendency to automatically take out a grievance against an employer when issues with an individual’s performance need to be addressed. “The situation at the moment means there is a lack of personal accountability. The traditional relationship between the line manager and the individual can sometimes get clouded. It is not good for anybody, let alone the business.”
Sonia Sharples, head of HR at retailer Poundland, believes the new government should put far more effort into tackling illegal immigration at source through the UK Border Agency rather than make employers responsible for detection. “We suffer from people who have forged documentation and, as a business, you can be fined up to £10,000 for employing such people.”
She also wants simplification of the Pensions Act before it comes into force in 2012, particularly in relation to the compulsory contributions from workers. “I’m not sure this complicated mechanism that has been put in place is the right answer. It is hugely administratively burdensome for employers.”
For David Yeandle (right), head of employment policy at EEF, which represents manufacturers, the government’s relationship with Europe will be crucial to ensuring the UK retains a flexible labour market. “Because European legislation is so potentially important for this, we would want a government that was engaged positively with the European agenda.”
Although acknowledging that the Conservatives are “lukewarm” about Europe, he argues they can still engage positively with it on issues such as the Working Time Directive.
Yeandle hopes the national minimum wage is increased in line with basic rates of pay to give employers a greater degree of certainly about their costs. He also wants a default retirement age to be retained. “If it was removed, it will make it more difficult and complex for companies to manage workforce changes.”
One of his main concerns is that nothing is done to destabilise the business environment. “Over the past 10 to 12 years, we have had an avalanche of legislation. Frankly, what business is looking for is just to leave that well alone.”
This is a common demand. Nick Holley (left), director of Henley Business School’s HR Centre of Excellence, says: “I want to see a government that regulates to avoid the worst excesses rather than legislates to micro-manage a dynamic situation. My concern with governments that try to protect employees is that they are interfering with something that people will always find ways round.”
Regulations concerning the vetting of job applicants to the care sector are a particular concern for Beverly Ashby, HR director at Bupa Care Homes UK. “We still do require the checks, however, the costs of doing so need to be kept to a minimum as it deters people from applying to the care sector,” she says. “The cost burden of the volume of legislation and complexity means that employers spend a disproportionate amount of time on processes that are so burdensome.”
Stephen Cloves, group HR director at AF Blakemore, which employs more than 6,000 people in food distribution and convenience stores, fears more employment legislation because of the impact it will have on small businesses.
“As a larger business, we can take care of requirements ourselves and have systems in place to deal with things such as maternity and paternity entitlement and associated requirements,” he says. “If you’re a small company and have never dealt with this before, do you know about the risk assessments that are needed and what the employees entitlements are?”
Cloves also wants changes to the way small employers are required to make access adjustments for disabled workers. “The government will say that advice is available, but I don’t believe it is easy to access. I really do despair at how small businesses will cope with more of this type of legislation. It will just make small companies shy away from employing members of the disabled community. “
Over the coming weeks, Personnel Today will be looking in greater detail at the main parties’ manifestos, and asking what their policies could mean for HR.