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.

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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

What my kids taught me about Productivity

What my kids taught me about productivity

Firstly, I confess I made a mistake; we needed to write letters to just under half our customer base (650) before Christmas. This was part of our commitment to inform customers of new developments within our group.

We chose a letter (snail-mail) as these days email is more likely to hit the spam than get into the hands of the people you want to reach. My mistake was haste; Had I taken the time, I would have saved about 10-20% of the cost (about £60) by using a 3rd party.

However, I decided to do the mail merge and post in-house and was faced with the task of folding 650 letters and putting them into envelopes. My solution was to invite my children (I have 4 ranging from 8 to 13) to complete this task rather than burden my colleagues.

I calculated that it would take about 5 seconds per envelope and offered my children 5p per item. I was at first sceptical that at such young age they would grasp the potential prize (£32.50) if they completed whole project.

Initially I invited my youngest daughter Arabelle and her older brother Blake to the challenge. Enthusiastically they got to task immediately and within 5 minutes my oldest son joined the party.

Arabelle, independently came to the revelation that it was more efficient to fold all the letters first and then put them into the envelopes after, rather than switch tasks for each letter. She is only 8 years old yet came up with a way to optimise the task and improve her productivity.

Zach and Blake took this further by copying the idea and teaming up together (they agreed to share the rewards equally). They recognised the benefit of collaborating.

Halfway through my other son Jed turned up (he would normally spurn such an opportunity) but was inspired by the enthusiasm of his brothers and sister. He immediately joined the team. Arabelle being generous of heart agreed to team up with him and share the rewards even though she had already done a large amount of the work. She determined that she would fold whilst Jed would put in the envelope (another smart move) thereby focusing each on a specific task.

Naturally given it was now a competition and a limited number of opportunities (650), there was a pressure to cut corners and so I introduced a quality control process; The address needed to be fully visible in the window of the envelope. If it failed that test, then the envelope (and reward) would be handed to the other team for rework. From that point on quality control was embedded in the team and any queries were flagged up to me immediately (I took on the role of Quality Control Officer).

I was literally taken back by how quickly a group of kids could organise themselves, collaborate, optimise their activities and improve productivity without any direction.

With UK productivity still anaemic, there are some powerful lessons we can all learn from this;

  1. If you want productivity improvements, ask those who are doing the task – they know far more than you.
  2. Create a culture that encourages rather than frustrates the innate potential in people to improve efficiency.
  3. Improvements in productivity can be achieved very quickly if there is focus and incentives.
  4. Ensure quality control is embedded in the process not simply at the end.
  5. Measure and track the entire process to ensure continuous learning.
  6. Never underestimate the contribution of women in the workplace; my youngest daughter came up with the majority of productivity improvements. It is no surprise that the Mckinsey report identified that organisations with 30% or more female executives, are on average 15% more profitable (For more info watch our COO, Nicola Smart interviewed by the Telegraph Business Reporter)

For those interested in statistics

Arabelle and Jed achieved 259 with a failure rate of 0.77% (e.g. 2 that failed QC)

Zach and Blake achieved 311 with a failure rate of 1.93% (e.g. 6 that failed QC)

The failure rate was significantly below the industry average for manual processes.

Finally, the reason for the discrepancy (570 completed vs 650 letters) was down to management failure (me) to provide enough envelopes (I guess the final lesson here is to always invest in planning)

To find out more about hfx visit our main website or contact us

Time to Reboot Productivity

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Time to Reboot Productivity

One thing is clear from the myriad of UK statistics; A huge number of UK companies just aren’t productive. They may be working hard for their customers and stakeholders, but they just aren’t working Smart.

productivity

And here is the evidence;

  • Productivity (measured as output per hour worked) is as a huge 18% below the G7 Average (ONS) and the widest since 1995.
  • If we compare the UK to EA/EU productivity growth (2016) we are just above Italy and Greece in the group of 32 countries.
  • Historically our productivity growth was 2% per year. Since 2007 growth has evaporated and as of 2017 (Q2) we are .5% below 2007 levels.
  • To put this into perspective we are 20% poorer due to productivity stagnation than we would have been had productivity continued to improve at 2%.
  • These figures are bad enough but when you remove London (home to the Finance Sector and 32% higher than UK average) from the figures productivity is even worse than the headline figures.

How does this affect your business?

The statistics reveal that the problem of poor productivity is not a problem that affects “some other business” but to some extent and degree most businesses. Poor productivity results in loss of competitiveness, reduced profits, wage stagnation and skill/staff attrition. If any of these resonate then you too may be one of the many and not the few.

Whose fault is it anyway?
Whilst it is true that national infrastructure (Rail/Roads/Broadband) contribute towards productivity (something the government is “working on”) this is just one factor which is outside of the control of business. The other critical and contributory factors remain with the CEO and the company board.

Management.
A task too often focused on maintaining the status quo rather than constantly striving to improve the efficiency of their area of responsibility.

Skills.
Ensuring your staff are fully trained to perform their tasks at optimum performance. Improving skills not just increases output it also reduces rework though improved quality.

Processes.
Outdated paper-based and unwieldy processes that simply burden staff and reduce their productive time must constantly be identified, reworked – or eliminated – and automated.

Technology.
The ability for technology not just to automate processes but transform them is no longer a vision but an everyday fact for most high-tech business. Both process transformation and (technology) automation should be viewed as a single inseparable goal and activity.

Planning & Measurement.
The transformational impact of technology enables not just improved planning but also real-time measurement enabling a business to close the loop on productivity initiatives and implement continuous improvement easily and cost effectively.

Where do I start?

For many businesses the answer is obvious and that is to measure the output per hour worked.

One of the biggest costs for businesses is staff and highly productive companies have the following information at their fingertips and often in real-time;

  • Where are my staff?
  • What are they working on (activity/task/client/contract/customer)?
  • Are my staff working patterns aligned to business demand?
  • What changes must be made to align staff to business demand and avoid unnecessary downtime, overtime or unproductive time?
  • What is my staff’s overtime, absence and unproductive time today/this week/this month?

If you cannot answer these questions simply and quickly about your greatest and most expensive asset (your staff) then you cannot even start to identify issues, implement improvement plans or measure the effectiveness of those plans.

Nor have you laid the foundations for continuous improvement.

The biggest mistake companies make with improvement projects is that it is a one-step process rather than a continuous never-ending cycle that is impacted by technology, methodology, tools, training and materials.

Above all, its time to measure, not once or twice but constantly to ensure improvements are not one-off but continuous. The UK needs a Productivity Reboot and businesses should not wait for the government to make it happen but make the changes only business can make. That time is now.