While the economic outlook for the UK continues to pose challenges, employment looks more positive. Our recent global study on redundancy trends paints a positive picture in the face of flat-lining economic growth.
Some 81% of the 900 companies surveyed in the UK indicated that there would be 'no redundancies at all' in the next six months and just 4% stated there would be significant employee cutbacks.
It is reassuring news for everyone that organisations appear to be focused on retaining rather than reducing staff numbers. However what does it tell us about the way organisations are choosing to operate in these difficult times? What are the new challenges organisations face in the management of their talent?
The trend amongst UK employers to retain staff is most probably due to the fact that many have already reached the limits and are now operating in a stretched capacity. To not only function as a business but to deliver with less people, businesses have to use their talent in new and different ways; organisations have to be more open and agile about how they use their people's skills and knowledge across their business.
This would suggest that organisations are having to think about workforce planning and strategy in a way they haven't had to before. But interestingly, 41% of the surveyed companies said that they 'do not do workforce planning and have no workforce strategy'. We need to be open to the possibility, therefore, that either the results reflect reality and that organisations are doing little or no workforce planning or - and more likely to me - they are undertaking workforce planning but not recognising or articulating it as such.
Aligning business and workforce strategies has never been more critical for companies today. We know that despite unemployment being high, the availability of people with the right skills is still causing problems - utility firms need engineers, manufacturers need technicians and across all sectors there is a digital skills gap.
With growth hard to come by in these tough times, businesses need to maximise all their resources. Talent, often the scarcest resource of all, is the only differentiator between competitors. Therefore organisations need to know more than just the number of people they require, but also plan the capabilities they need to deliver now and in the future. Investment in people by retaining and developing talent will mean businesses keep their competitive edge - not a nice to have, but a business imperative today.
HR must absolutely be seen to be driving this alignment of business and workforce strategies. If companies are just 'doing' the bare minimum of workforce planning, it is a real opportunity for HR to show how a workforce strategy can impact on the success of the business. Arguably, there never has there been a better opportunity for HR strategy to demonstrate the valuable contribution it can make to business growth. As we know, this is not without its challenges: nearly a quarter of companies told us in our redundancy trends survey that HR plays little or no role in business strategy; however, as the economy poses challenges for business leaders, so too does it create opportunities.
It has always been a challenge for HR managers to demonstrate how they contribute to the bottom-line or strategic direction of the company. Speaking in the right language; demonstrating the understanding of an organisation's overall business strategy - the ways success is measured, and what each component of the business needs to fulfil that strategy - is the first step.
The business argument for considered people management and workforce planning is hopefully getting easier to make. By aligning workforce and business strategies, organisations can plan the capabilities they need to deliver now and in the future, protecting their businesses from the skill shortages that can stifle growth.
David Miller, MD of Right Management UK & Ireland
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