What Does Brexit Mean for HR?

Since Freedom of Movement within the EU came into existence through the Maastricht treaty in 1992, UK companies have had access to an almost limitless pool of foreign worker to recruit into the workplace. As more countries joined the EU, this pool grew larger and filling vacancies within the company became a relatively simple task.

There was also an incentive for EU workers to work in the UK due to the favourable exchange rate bearing in mind that most would send part of their salary back home to their families (in 2015 £1 would get you €1.4). However, since the decision to leave the UK in 2016, the pound has slipped to about €1.10 to the pound for those EU nationals repatriating their earnings back home, this represented an effective 20% pay cut since 2016.

This has removed much of the incentive to work in the UK and many EU nationals have or are planning to return to their home country. In addition, the pending border controls have created uncertainty and concern among foreign workers in terms of whether they can remain in the UK and how easy it will be to travel back and forth. As a result, high numbers are returning to their native countries in order to have guaranteed stability for their families. At the same time, the number of foreign workers wanting to come and work in the UK has dropped off for the same reason – uncertainty following Brexit.

Figures from the ONS report that EU migration is at its lowest levels since 2010 and that the number of EU nationals returning home has increased by 50% since the referendum. For organisations that have relied on EU workers, this represents a significant challenge as not only are they losing workers, but also struggling to replace those workers through traditional routes. With the unemployment rate at 3.9% – its lowest level since 1974 – the available pool of workers has reduced even more significantly. The impact of these changes is likely to be felt across every HR department with longer lead times to fill a vacancy, increased recruitment budgets and inflations busting pay reviews.

However, whilst the HR department is often left with the problem, the solution may lie elsewhere. To understand the solution, we need to explore whether the limitless supply of workers diminishes the need to improve workforce productivity, since 2008 UK productivity has flat-lined. If the UK had continued to improve productivity as the same pre-2008 levels, then we would be 20% more productive. In practical terms this means that organisations could have achieved 20% more without increasing their staff headcount.

So, what went wrong? This has yet to be entirely answered, but there is a convincing argument that during the 2008 recession many organisations stopped investing in productivity improvements. When the growth did return many organisations took the expedient route of increasing the head count which was accommodated by the pool of available EU workers. Indeed, there is some correlation between the period of productivity stagnation and increased EU workers within the UK.

Regardless of what caused productivity stagnation, the solution lies within the organisation by focusing on and investing in staff productivity. If you can improve the productivity within your existing workforce by just 5% that can reduce the need to increase headcount. As always whilst the solution may not be within HR, often it is left to HR to lead the initiative.

Often productivity is considered hard to measure and organisations find it difficult to identify the areas that require improvement, but there are 5 key areas to explore;

  1. Workforce Planning: do staff rosters align to business demand? Is it such a basic question that it is more overlooked than any other factor? Often the question cannot even be answered without detailed study. In our experience there can often be a 10% productivity gain through alignment of rosters to business activity. Often the issue is that whilst the rosters were originally aligned – albeit with a bit of guess work – they were never updated to reflect the changing and evolving business activity.
  2. Process and Technology: too many manual and/or cumbersome processes that consume too much time and are inefficient.
  3. Training: poor or infrequent training results in poor quality (and increased rework).
  4. Tools: providing the right tools to do the job is essential in maintaining high levels of productivity.
  5. Staff Retention: high staff turnover impacts productivity significantly as new recruits take time to come up to speed and often require time and intervention from other colleagues.

Focusing on these 5 areas will boost productivity and ensure that more can be achieved without needing to add to headcount.

However, there is a greater prize. Companies with high productivity levels have lower costs, increased profit and are more resilient to economic cycles.

Whilst many problems end up on the desk of HR to solve, now is the time for HR to take a strategic lead and present the problem – and solution – to the wider business. At HFX our solutions are powerful tools to help you improve productivity. Contact us via email at sales@hfx.co.uk or via telephone at 03333447872 to find out how our software solutions can help your productivity. Alternatively visit: https://www.hfx.co.uk/solutions/workforce-optimisation/ to find out more.

A Guide to Workforce Management Solutions

WFM

Workforce Management Software (often shortened to WFM) addresses a specific need within an organisation regarding the operational planning, deployment and management of staff. WFM is generally sandwiched between HR and Payroll solutions with integration to each other. However, whilst HR and Payroll are generally admin solutions, WFM focuses more on the operational needs of the organisation.

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WFM often incorporates several core modules

Time and Attendance:

This provides the ability to record the attendance of staff often in real-time through data collection devices (Card or Biometric) and calculates the time a colleague has been at work, any absences, lateness and overtime.

This information is then passed (via integration) to the payroll system avoiding the need to manually enter and calculate hours to pay. This automates much of the manual activity, removes payroll errors and ensures equal and fair treatment of staff.

From an operational perspective it ensures managers are alerted if staff do not turn up for work enabling them to find immediate cover. From a management perspective it provides managers with data on lateness and absence so that they can take appropriate and timely action.

Naturally, every organisation is different and operate different polices. An advanced Time and Attendance module can cope with different environments and policies. For instance, in an office environment, they may operate a Flexitime policy and want to track hours worked, TOIL and ensure the Flexitime rules are adhered to.

An organisation with seasonal peaks and troughs may implement Annualised Hours for staff and require the Time and Attendance to manage this specific policy. Not all Time and Attendance solutions provide this flexibility.

Rostering:

The ability to plan your staff resources effectively can often be challenging for managers particularly where there is a need for specific skills at particular times of the day/week.

Almost every workforce management solution provides rostering, but this can be limited to basic planning (Shifts). Advanced solutions such as HFX enable more detailed planning and provide the ability to plan where the staff are going to be deployed (location), their activity, Cost Centre, Department or Client and even cost the plan against a budget for that team/department/cost centre.

This enables managers to ensure the right people are at the right place with the right skills at the right time. From an operational perspective this ensures that the work is completed on time and to budget. From a financial perspective it enables the organisation to ensure that project/contract is profitable whilst reducing the cost of overtime.

Productivity:

For those organisations that are heavily task/contract focused, it is important to ensure that staff productivity is monitored to ensure the organisation is providing an efficient and profitable service.

Measuring productivity varies from organisation to organisation, but generally focuses on measuring the time and/or cost of completing an activity (e.g. “packing”) or outputs (e.g. “widgets made”). Advanced workforce management solutions provide technology that enable staff to “Book onto” a task/activity and/or the number of outputs generated within that time-frame.

This real-time information is used by Operation Managers to identify non-productive areas, investigate and implement plans to improve efficiency such as training, technology or process improvements. From a finance perspective, managers gain valuable insight into the costs of production, activities and overall in terms of fulfilling contracts.

Table-1 (002)

Additional Modules within Workforce Management

Often Time and Attendance solutions capture data via card or biometric devices. Many organisations see the benefit in using a single system to manage not just attendance but also access to the building and secure areas. The advantage of using one card (or storing one biometric template) is obvious and so some workforce management providers have an Access Control module to facilitate this.

Visitor Registration is also a logical extension to workforce management so that a single system can track all people within the organisation (full time, part time, contractors, visitors etc) for the purposes of security, health & safety and roll-call (in case of fire).

Some providers also have a Lone Worker module so that staff who are remote or visit customer sites can be tracked to ensure their safety and also enable remote attendance recording.

Those organisations with varying demands (over the period of a day or week) often want to optimise their shift patterns so that they align with business demand. This often yields significant savings by eliminating “dead time” (where staff are at work but have nothing to do) and overtime (where lack of planned resource to meet demand requires overtime or agency staff). Workforce Design solves this complex problem by ensuring that requirements are met whilst considering fatigue, risk, human factors and legal requirements.

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In conclusion, Workforce Management solutions enable organisations to become more efficient though effective planning, accurate recording, automation, decision support and analytics. However, few are able to meet the breadth and depth of functionality required to address all aspects of workforce management.

HFX provides a complete suite of next generation cloud workforce management solutions. 

For more information contact us

The Future of HR

man with steel artificial arm sitting in front of white table

In a future where many jobs will be lost to automation the question arises as to both the future of the workforce and the need for traditional departments such as HR.

The reality though is that whilst automation will encroach further and further into the workplace removing swathes of jobs and assisting with others, AI for all its hype, has its limits.

To understand where the watermark rests is not quite so simple, but there are guiding principles. Machines are capable of processing huge amounts of data instantly and identifying patterns, trends and correlations. This provides enormous benefit to decision makers who can leverage this data to make informed decisions.

However, decision making at a high level is often the result of considering not just one data point however well evidenced, but many and from different disciplines. Computers often can do one thing very well and fast but can rarely assess the bigger picture.

Neural Networks are capable of learning, but again this is often domain focused. We will see in future the rise of self-driving cars and literally billions of pounds are being spent each year to make this a reality. Whilst there is a high degree of confidence that this huge investment will succeed, the code behind it won’t be able to diagnose cancer in a patient.

Humans are never born to drive or diagnose a patient but have the unique ability to learn completely new and unrelated skills. Given the rapidly changing world and technology, this is a good thing, and it is ironical that whilst we are rapidly adapting to new technology, technology itself is not very good at adapting.

So, what does this all mean for the workplace, the new world of work and HR? Computers and AI will be focused on “narrow field” activities and tasks, those that require speed, accuracy and analysing big data. On the other hand, humans adapt rapidly, have holistic and “outside the box” thinking, multi-disciplinary knowledge and creativity.

Whilst HR contains a lot of administrative tasks which can be automated, there is much that cannot. HR requires a whole range of diverse knowledge and insight from understanding the Law to the values and culture of the organisation, from the needs and objectives of both company and staff to respecting union rules and the wider culture of society in which it operates.

HR acts not just to re-enforce polices and values, but also a change maker within the organisation. In fact, to do HR well, you need to understand that you are working with human beings; A statement so obvious it is often missed when discussing how a computer (with no sense of self, empathy or deep understanding) could replace people in role that requires deep interaction with others.

Computers can learn but learning without context can be at best a disaster, and at worst, catastrophic. For example, Microsoft took down Tay, an AI Chatbot on twitter only 16 hours after launch because – through learning – had started tweet offensive and racist comments. It had no moral compass or understanding of the wider culture to recognise that there is good learning and bad learning.

Imagine you are driving your car 60 mph when a child crosses the road in-front of you. There is no time for you to break without hitting the child, so you can either swerve the car up onto a pavement and hit a wall (with the potential you will incur life changing injuries) or kill the child. This is not hypothetical but a real moral and legal dilemma for the manufacturers of self-driving cars. Is their legal responsibility to the owner of the car or to other road-users? There is no legal requirement for a driver to risk or sacrifice their life to save another. Supposing the car is programmed to risk your life rather than kill the pedestrian, but now the person running across the road is a terrorist with a gun whom you are trying to stop with your car.

You might think this is going off-topic, but having a moral perspective, values and a big picture view are all important for the right decisions to be made every day.

Even the best AI lacks these things and for those who believe these issues will be sorted in the future, the answer is that we might not need to wait after all. Many in the AI field believe these kinds of issues can only be solved if AI moves to a biological architecture (rather than digital), that it requires consciousness, self-awareness and intentionality. If correct, then these attributes already exist in what we currently call humans.