It is only a few short weeks until 2015 draws to a close and 2016 shines its light upon us. It has been an exciting year for human resources, with emphasis placed on employee retention and human resource departments increasing their visibility and further adding value to organisations. There has been much chatter about the future of HR and how the modern office environment will look – with that in mind we thought it the perfect time to examine what the experts are saying about the big changes and what we can expect from 2016.
1. National Living Wage – April 2016
Anyone aged 25 or over will be entitled to the national living wage of £7.20 per hour (the minimum wage will continue at £6.70 for those aged 21-24 and £5.30 for 18-20 year olds). The government projects this will impact 2.7 million workers, resulting in a considerable amount of work for employers and HR departments. Larger retail companies are expected to increase their employment of under 25s to circumvent the higher end rate and many people could lose their jobs (from downsizing etc). The penalties for an employer not meeting their obligations will be stiff and the budget to enforce minimum wage measures is to be significantly increased.
2. Increase in flexible working/workers
This will be a significant challenge to many HR professionals throughout 2016 and beyond. We have already seen the trend for flex-working and home-working, coupled with the expectations from millennials, this is expected to increase exponentially over the coming years.
3. Skills drought continues
The full-time skills shortage over the last few years will persist and could worsen. With an under-skilled workforce, and with the government strangling access to skilled non-EU workers, the impact on HR and the pressure it brings will certainly be felt. Increased use of contractors and freelancers will fill the immediate need, ensuring projects are completed and the wheels of commerce keep spinning. London could be worse hit as those priced out of the housing market continue their exodus to greener, cheaper parts of the country.
4. Learning and development
Learning and development will take centre stage in answer to the increasing skills gap. The demand for apprentices, development of in-house training programmes, and continuous professional development of existing staff will be a focus for human resources professionals. To counteract the drought of qualified and experienced personnel, organisations will take it upon themselves to plug the shortage of skills.
5. Increase in the use of freelancers and contractors
A consequence of the present candidate market is that companies don’t often immediately search for permanent applicants, realising that securing a full-time employee can be tricky, instead turning to contractors and freelancers. With access to the best agency contractors, human resources can expect to build relationships with recruitment specialists and niche suppliers for a variety of skills.
6. Adaptive management
The increase in flexi-working, flexible workers and the rise in the use of freelancers and contractors will see an evolution in management (both human capital and line). This new environment will take careful planning and execution, but new working methodologies will help clear the way for the future of the mid-to-late 21st century workforce.
7. Less emphasis on qualifications
In a bold move by EY in August this year, it was announced they would no longer consider applications by initially judging the candidate on the merit of their degree or A-level classifications – EY arguing that there is no direct correlation between educational attainment and success in the commercial environment. An individual’s academic achievements will still be considered as part of the application process, but poor or no grades will not be a bar to being successful in applying to EY. This is a great move by an international player and others have started to follow.
8. Gender equality
Redressing the gender-imbalance in both headcount and remuneration will be increasingly under the spotlight in 2016. Far from existing in a gender-equal society, we struggle on to ensure that women have equal representation and like-for-like pay. Mandatory gender pay gap reporting is to be introduced (for companies with over 250 staff) and will require all organisations to provide detailed information to determine whether “there are any differences in the pay of male and female employees” (s.78 Equality Act 2010). The section of the Act is yet to be brought into force, but it is expected to be ratified within the coming months.