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Our HR Workshop sessions are a chance for HR and Reward specialists to share experiences and practice around the common challenges they face. Together, we have discussed the various approaches that employers have taken to address key HR trends.

Here, we outline the top five trends that have emerged across a number of sectors including Renewables, Facilities Management, Private Healthcare, Construction, Housing Associations and Residential Care, in addition to a special HR Workshop for those in the Channel Islands.

1. Pay levels that balance affordability and rising costs

There is hope across the HR Workshops that inflation will start to abate and this will take the pressure off pay packets. The war for talent continues, with employers reporting recruitment premiums to attract the talent they require.

Where employers have been able to give generous pay awards in 2022 and 2023, to address concerns over inflation and a competitive pay market, this has reportedly driven down employee turnover and reduced out of cycle increases too. However, for some affordability is an issue; with many employers having offered their largest ever pay increase in 2023, they are now nervous about the effect of doing less this year.

There are concerns over the impact of the rise of the National and Real Living Wage on pay scales. Maintaining the pay scales between levels so that pay frameworks upheld meaningful rates that reflect varying role responsibilities. Pay compression concerns as a result of the NLW were voiced.

2. The importance of developing a strong pipeline of talent

Recruitment and retention challenges persist, alongside the skills shortage, which makes recruitment for specific roles acute, such as digital, IT, finance and electricians. Developing existing talent for the future to build and sustain a strong pipeline of talent is being discussed widely.

A number of Property and Construction Consultancies are developing early careers programmes and offering apprenticeships. Similarly, those in our dedicated group for companies in the Channel Islands reported that the government is not always supportive of the need to recruit from overseas, therefore career development and nurturing existing talent is a huge priority for them. Residential Care faces a looming issue with workforce planning, with many employees being in their late 40s and 50s. Building a strong pipeline of talent is a key priority for them and they are increasingly looking to non-financial rewards, such as health cash plans and recognition awards, to retain staff.

While Private Healthcare sector HR professionals noted that recruitment and retention challenges were easier this year in comparison to last year, affordability remains a key issue. Some are looking to offer greater coaching and leadership training to build a strong pipeline of future leaders. Total Reward Statements are a tool to highlight the value of this training and development for employees, underlining the wider investment employers offer employees beyond pay.

3. Considering their record on Environmental, Social and Governance

Recent research by LinkedIn highlighted how 71 per cent of employees would consider taking a pay cut to work for an organisation who they felt shared their values. This highlights how an employer’s record on ESG could impact their ability to attract and retain top talent, something that has been widely discussed in our workshops.

Benefits that are linked to a company’s record on ESG most obviously include car allowances. Organisations are retitling car allowances, calling them travel allowances over fears that car speaks to their carbon record. Electric vehicles and navigating the tax rules around them are a key consideration, as employers look to implement these as part of their environmental strategy.

Diversity and inclusion sit within the ‘S’ of ESG. Employers are increasingly taking a strong look at their gender pay gap and ethnicity pay gap, although many are finding data for the latter is still lacking. Some employers report the use of  Diversity Workshops to address EDI challenges, such as unconscious bias.

4. Focusing on employee wellbeing

As inflation eases, HR professionals are hopeful that there will be less of a focus on pay and therefore on other areas of work, including environment, progression and benefits.  Healthcare premiums have gone up significantly this year, so highlighting the greater investment by employers beyond pay in the total reward offering is important for employees to understand the value they are receiving from their work.

Hybrid working post-covid remains a key challenge. Employers are still asking whether they are getting the best productivity from their people. However, particularly in Construction and Property, family friendly policies are increasingly a priority to widen the pool of candidates that they are recruiting from.

Wellbeing is an acute issue in certain sectors. Where role compression has happened in the Residential Care sector, some employees do not want to be promoted from Carers to Senior Carers, because there is not much more remuneration available for the greater responsibility involved. However, the low staff levels are putting immense pressure on people, showing the impact that staff shortages can have on employee wellbeing.

5. Software is being used to harness better data insights  

At Paydata, we always advise that if companies can take pay off of the table as an issue, employees can focus on the wider benefits and environment that can be accessed through their work which delivers value to them. Many people are reviewing their salary structures and ranges, alongside their benefits packages and looking at the technology that can inform what must be evidence-based frameworks. Automating systems for recruitment and payroll enables HR to focus on dealing with people directly, making their role more efficient.

Human Resources Information Systems are being widely investigated and adopted to manage data, particularly in the construction sector and in the Channel Islands. Workforce planning software is being used as part of people analytics, organising the insights from firm wide engagement surveys, identifying emerging talent, and tracking out of cycle pay increases. They are also being used to monitor data around diversity and inclusion – gender, LGBTQ, ethnicity and disability – which enables companies to harness the power of their data more effectively.

Many employers are looking at internal pay equity due to the EU Pay Transparency Directive that is being implemented in the EU. Ensuring pay parity exists is crucial for employers operating in the EU and those looking at whether this more robust system of reporting requirements will become a UK government priority.

Get in touch

We hope these key insights from across our HR Workshops help to inform your approach to HR challenges. Get in touch with us today to discuss these trends and themes and let us help you establish fair pay frameworks and underline the investment you are making in your employees.

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