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We take a look at some of the current trends within the HR and recruitment profession. These offer you a glimpse into some of the areas you may have to deal with and potential trends to look out for in the future.

Overview of the labour market

The ongoing economic difficulties we are facing continue to have a huge impact on recruitment budgets and applicant and employee management. Some organisations have implemented a recruitment freeze whilst others have shifted focus from recruitment to retention. However, labour turnover across the UK is down on the previous year at 13%.

There has been a dramatic decrease in the number of vacancies available, this is particularly true of the public sector where public funding has been severely reduced and the Default Retirement Age abolished.

There has been a decrease in migrant workers being recruited, with private firms planning to employ from abroad falling to 23% (32% the previous year). Offshoring has also decreased from 10% to 6%; where offshoring may happen this is likely to be to India, Eastern Europe and Asia (excluding China). Job functions included in this are finance and accounts, IT support and operations.

Employee outlook

Job satisfaction has decreased recently, partly explained by the lack of job security for employees in the public sector. Confidence and trust in management has also suffered with reduced employee outlooks in these areas. However, trust in management has improved when employees believe that managers are helping them to achieve a work/life balance.

Resourcing and talent planning

Following the trend in 2010, there has been continued difficulty in filling vacancies. This is often due to the lack of specialist skills and the need for sector specific experience. However, the number of applicants per vacancy has increased as a direct consequence of higher unemployment rates.

Across the different UK employers over half have a formal resourcing strategy; however, these are primarily larger companies. Many have reported, especially in the public sector, that their budgets have been reduced. This has meant greater focus on staff retention and in-house staff training and the reduction of external recruitment partners and recruitment agencies to cut costs. Nearly half of public sector organisations are also seeing a recruitment freeze.

The rise in university tuition fees is also likely to affect the number of graduates in the marketplace. However, this is only likely to come into effect in 2015 when those affected are graduating. In the meantime, the most recent graduate unemployment figures show 18.9% of graduates are out of work (source: ONS).

There is a trend from some companies to increase the opportunities offered prior to graduation. This includes sponsorship during university (10% or 20% for manufacturing and production companies), 22% are increasing the number of internships offered and 30% are increasing the number of apprenticeship schemes available (48% in manufacturing and production). However, only 25-25% use a structured graduate recruitment programme.

The most effective method for attracting recruits continues to be the use of corporate websites but when the length of the recruitment process becomes too long 1 in 3 organisations start to lose candidates. Overall median price of recruitment ranges from £7,500 for senior staff down to £2,500 for other employees.

With an increased emphasis on employee retention, techniques to achieve this will be focused on. Methods include improving the people management skills of line managers and increased development opportunities. The induction process has also improved at some companies in the hope of retaining staff.

Reward management

Common approaches for managing base pay include individual pay ranges or spot salaries. Further up the career ladder, broadbanding is often used, especially in the private sector and manufacturing and production industries. However, market rates are the primary source for determining pay. In the public and third sector, pay spines are the most common method for managing salaries.

Some companies also operate incentive schemes specifically the manufacturing and production sector, international firms and firms with over 20,000 employees. Bonuses are usually paid based on performance but other factors such as business goals and financial results also play a part.

Other benefits also include long-term share options such as ‘save as your earn’ (SAYEs) and share incentive plans (SIPs); contributory pension schemes; and flexible working conditions i.e. work from home. Due to changes in retirement age policies, pension schemes are likely to undergo some changes. These may be salary sacrifices and options for employees to define their contributions.

Most companies increased base pay in 2011 however around 25% were considering freezing pay due to the economic situation. Pay freezes are more likely to affect senior managers than more junior staff members.

Increases in pay are often determined by the following factors:

  • Performance
  • Market rates
  • Competencies
  • Length of service.

External factors affecting pay reviews include:

  • Ability to pay
  • Market rates
  • Inflation
  • Pay guidelines
  • Government funding.

Learning and talent development

Training programmes and budgets have increased on the previous year, 2011 saw the average number of training days at five and a spend of £350. The use of external partners has reduced with the use of more cost-effective methods such as e-learning, coaching from line managers and in-house development schemes.

Needs and events are determined by learning and talent development specialists within the HR department. They will also become increasingly responsible for development/change management activities. This integration between performance management and organisational change is likely to continue and be a major part of learning and talent development specialist’s role in the future.

Effective techniques for training staff include:
In-house development programmes
Coaching from line managers
Coaching by external practitioners (for managers)
Workshops and other training events (for managers)
Job rotation, secondments and shadowing.

Absence management

On average each employee has 7.7 days off work, this works out as a median cost of £673 per employee per year. However, this varies considerably across different sectors. For instance the public sector has the highest absenteeism at 9.1 days whilst in the private sector this is 5.7 days. Larger companies tend to have higher rates of absenteeism although this trend doesn’t hold when referring to the public sector.

Most organisations believe it is possible to reduce these numbers through return-to-work interviews, trigger mechanisms to review absenteeism, providing more information to managers, occupational health involvement, risk assessments and disciplinary procedures.

Causes of absence range from short-term conditions such as colds, flus, stomach upsets, headaches and migraines. Back arch, other musculoskeletal pain and stress are also common causes for taking time off. Home and family responsibilities also come within the top five reasons.

Line managers will often deal with short-term illnesses whilst other departments may become involved for more long-term conditions.

Stress related absences have also increased recently, with 40-50% of organisations reporting a growth. This is mainly due to workloads, management style, work relationships, organisational changes and other non-work related issues. Job security, especially amongst public sector employees, is a common cause of stress.

Around 60% of organisations were taking steps to identify and deal with stress related problems. This was mainly done through surveys, management training and flexible working options.

Although most organisations believe that the abolition of the Default Retirement Age (DRA) will not affect absenteeism, provisions are being made by 1 in 6 companies to improve employee’s wellbeing. Provisions may include access to counselling, employee assistance programmes and stop smoking support.

For further information on HR trends go to the CIPD website or read ‘Overview of CIPD surveys: A barometer of HR trends and prospects 2012’.

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