From pay to pressure, the most important trends that will shape your HR strategy next year

Pay gaps under scrutiny

With compulsory gender pay reporting set to come into force this year, employers should start preparing now. Under new government rules, organisations with more than 250 employees will be required to run gender pay audits and publish the results. An exact implementation date has not yet been announced, but the changes are expected during the first half of 2016. 

Government action is long overdue, say some, as women have consistently been paid less than men for the same work. ONS data published in November 2015 showed the gap between men and women’s pay for full-time work was 9.4 per cent. Campaigners say this disparity means women effectively worked for free from 9 November until the end of the year.

Employers can determine what their gender pay gap is by setting up a special project team. This should include a statistical analyst, an employee from finance or payroll, an executive board member and a legal adviser to ensure data confidentiality. This team will also be able to research and benchmark the organisation against employers in the sector and see what other businesses are doing to narrow the gap. Look out for the government’s forthcoming response to the ‘Closing the Gender Pay Gap’ consultation, which will help determine the final policy.

The “invisible problem” revealed

In-work poverty (IWP) – which already affects up to 20 per cent of the UK workforce – could become even more widespread following sweeping reforms to universal credit which, the Resolution Foundation estimates, could cost working households £1,000 on average in 2020, and possibly up to £3,000 for some.

“It’s an invisible problem,” says James Richards, associate professor in human resource management at Heriot-Watt University, who has conducted new research into IWP. “State support is shrinking and employers, to some extent, are going to have to fill that role.

“We’re talking about poverty at levels where people struggle to pay rent, pay bills, buy food – even to come to work. Think about the long-term effect this has on morale, and on their productivity.”

HR can start to tackle the problem simply by getting the issue on managers’ radars, and opening up space for people to talk about financial matters. Other proactive steps include setting up credit unions, offering advances on wages in emergency situations and working closely with organisations such as Citizens Advice.

Cyber security hots up

Improving your organisation’s cyber security could be the most important thing HR does this year. With a string of recent high-profile data breaches and one employer, Morrisons, facing a legal claim from 2,000 staff whose data was leaked by a disgruntled colleague, the potential damage digital malfeasance can inflict is huge.

When Sony Pictures was hacked in 2014, staff salary data and addresses were leaked, as were internal communications that contained embarrassing revelations about what staff thought of some of the firm’s biggest stars.

And the threat is only increasing, as virtual incursions into workplace systems grew by 38 per cent during the 12 months to October 2015, according to The Global State of Information Security Survey 2016.

But there are a few simple things employers can do to reduce their exposure to cyber criminals. If you have firewalls, encryption and passwords for your system, make sure they are turned on. It’s also worth telling your staff what you’d like them to do; for instance, ‘don’t click on an email attachment if you’re not 100 per cent certain that the source is trustworthy’. Criminals often gain access because an employee, albeit unintentionally, lets them in or shares sensitive information too freely on social media.

And with reports that cyber security consultants can command fees of up to £10,000 a day, even basic attempts to reduce your organisation’s liability are worth the effort. 

Get set for the gig economy

It seemed to be the buzz-phrase for 2015, prompted by the rise of online platforms such as car-sharing app Uber and TaskRabbit, on which people buy and sell services and jobs. But while there isn’t anything particularly new about contract work and temporary employment, PwC suggests that the ‘connected work’ market is set to grow significantly over the next five years.

The challenge for HR in 2016 will be how to manage this ‘new’ type of workforce and how existing HR policies will fare in the ‘gig economy’. Alex Wood, research associate in the department of sociology at the University of Cambridge, warns that rising job insecurity brought about by uncertainty over the availability of working hours is having a clear impact on mental health. He recommends that employers fit work around individual needs rather than changing people’s hours to match demand, while at the same time handing more control to staff to manage their own schedules.

The living wage is coming

The subject top-most of employers’ minds since it was announced in July has no doubt been the living wage. Set to come into force in April 2016, starting at £7.20 and rising to £9 an hour by 2020, the national living wage (NLW) replaces the minimum wage for over-25s, and is already proving divisive.

According to a CIPD survey, 54 per cent of employers expect their pay bill to rise when the NLW is introduced, and almost a third are planning to improve efficiency and productivity in response. This could be good news for the UK’s dwindling productivity levels, but many organisations are still busy calculating how they will afford the increase.

Some businesses are looking to pass the extra expense onto consumers, with the likes of Whitbread stating that they plan to cut spending and raise prices, while CIPD research suggests that eight per cent of employers plan to take on more workers under the age of 25 to avoid the higher minimum rate. Age issues aside, the NLW is set to affect organisation-wide wage differentials, and HR should be at the forefront of conversations in the run-up to its introduction.

Time to take stress seriously

For the sixth consecutive year, employers questioned in the CIPD’s 2015 absence management survey reported an increase in stress-related absence and mental ill-health in their organisation. Ben Willmott, head of public policy at the CIPD, says a continued lack of adequate manager training – a stressed employee’s first point of call is their boss – is contributing to the ongoing issue.

Meanwhile, the report pointed fingers at growing workloads and 24-hour access to technology, causing staff to increasingly feel unable to switch off. With fewer people in work to pick up the load, and more job insecurity coming out of the recession, it is no wonder employees feel unable to expose vulnerability to their line managers, says Sir Cary Cooper, professor of organisational psychology and health at Manchester Business School.

The problem is proving costly to the UK: the Health and Safety Executive estimates that 9.9 million days were lost to work-related stress, depression or anxiety in 2014-15. Perhaps 2016 will be the year HR cracks it – with more mental health initiatives catered for in organisational wellbeing packages, and corporate cultures that provide plenty of tailored support from HR for line managers, as well as signposts for employees to access appropriate help.

Add Comment
Comment List
Comments (2)
  • I would like to think that with the advent of the'living Wage' in work poverty would be eliminated over time, or am I being naive?

  • What happened to lifelong learning?  Helping employees to invest in their futures especially in industries under threat from globalization and for occupations under threat from automation.