What is the priority for HR in 2005?

Information rules

Gerry Sutcliffe, employment relations minister, DTI

Gearing up for the new Information and Consultation rules will be a challenge for employers in 2005. For the first time, employees have to be informed and consulted, on an ongoing basis, about matters that affect them when more than 10 per cent of the workforce demand such a procedure. Effective two-way communication is always important because a ‘no surprises’ culture makes it easier to introduce change and helps employees to make the most of their potential at work.

The new rules mean that some employers should be reviewing consultation arrangements and others will need to introduce them. We allowed a great deal of flexibility in the rules for individually-tailored arrangements. It is now up to the employers, in agreement with their employees, to work together and make the most of it.

Skills and training

Susan Anderson, HR director, CBI

Skills are the priority for employers in 2005. If the UK is to become a truly knowledge-based economy and remain competitive, it must have a highly skilled workforce. Employers are doing their bit, investing £23.5bn a year in training, but there needs to be a focus on raising rudimentary skills. Too many adults lack basic literacy and numeracy skills and education reform is needed to ensure young people leave school literate, numerate and with a positive attitude to work. We need an action plan from the government to improve basic skills attainment in schools, complement the national training programme and help those in work.

Continuing growth

John Philpott, chief economist, CIPD

2005 will be an overall decent year for the UK economy. After a brisk start, the pace of economic growth will gradually slow. Consumers will cut back on spending as the housing market cools, while exporters will be squeezed by the impact of a weak dollar on the eurozone countries. Despite this, continued strong government spending, plus higher business investment, will keep the economy strong enough to avoid a rise in unemployment.With the jobs market staying tight, employers will be under even greater pressure to contain wage bills. HR can expect another busy 12 months.

Delivery and engagement

Duncan Brown, assistant director general, CIPD

CIPD’s latest research paints a positive picture of a function progressing on a strategic agenda, increasingly contributing to organisational change and performance. The days of ‘follow-the-fad’, ‘best practice’ rather than ‘best fit’, seem, in general, to be behind us.

Two words emerge consistently in all our work to do with priorities and improvements: delivery and engagement.

Implementation concerns are leading to a focus on line management relationships, as well as leadership styles, where realistic improvement, rather than revolution, is the way forward.

By delivering improved employment experiences to employees, HR has a critical role to play in securing staff commitment, which is a key driver of performance in today’s economy.

Developing staff skills

Richard Wilson, head of business policy, Institute of Directors

The priority for HR departments in 2005 should be developing staff skills. According to the Labour Force Survey measure, the rate of unemployment fell to just 4.7 per cent in the three months to July 2004. Consequently, to meet business objectives, it is vital that employers nurture existing talent within their own organisations, rather than looking elsewhere.

This issue becomes even more critical when you consider that 23 per cent of all UK organisations have employees who are less than fully proficient. Improving staff skills is the key to business success because it is people who add value to business processes, products and services.

New legislation

Mary Chapman, chief executive, Chartered Management Institute

The introduction of new employment legislation and work on areas such as leadership development and engaging employees should be given a high priority by HR in 2005. However, the biggest challenge will be the continuing quest to create a synergy between HR strategy and overall business objectives. With human capital reporting rising up the corporate agenda there are ever greater demands on the HR community to provide clear evidence of how management learning and development affects the bottom line.

Research shows that nearly half of managers think an employee’s attitude has the most impact on performance, yet the majority of companies still focus on measuring cost and headcount. Future business success lies in value creation through treating people as assets, rather than costs.

Family-friendly work

Brendan Barber, TUC general secretary

HR is going to be kept busy in 2005. The Labour government is now serious about making work far more family-friendly and this will be a big theme of the next year’s election. However, it will take more than a general election to sort out the pension situation. The final Turner Report, due out next year, might help to focus minds. In HR, we all need to do much more thinking about what slogans like ‘flexible retirement’ actually mean.

The big change in the law will be the introduction of information and consultation legislation. Here, we will most likely witness evolution rather than revolution but the prize is still great for organisations ready to harness the collective wisdom of their staff.

Financial regulations

Jim Matthewman, worldwide partner, Mercer Human Resource Consulting

International changes to accounting rules on equity plans, the impact of US financial regulations under the Sarbanes Oxley Act, and EU demands for more executive pay disclosure will keep compensation and benefit managers busy next year.

The Accounting for People recommendations will highlight the need to align people strategies and business strategies and herald advancements in the new science of human capital measurement.
Employee concerns about pay and benefits will force companies to review their total reward agendas.

Increasing mobility in the labour market will lead to organisations starting to differentiate themselves through better career management policies.

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