These are the thoughts and takeaways from the latest ER Think Tank (ERTT) held on Thursday 22nd November 2012 titled ‘The Future of ER’.
The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and ER professionals from leading UK and other international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.
Following the wake of the economic crash and as we hover on the cusp of a second slump, organisations are battling for business more than ever and fighting to get their proposition heard. Many organisations’ recovery from the recession and their future success depends largely on the trust they build with consumers, therefore the first thing to tackle is fostering trust amongst employees in order to build internal and external advocacy. However from an ER perspective, it is notably difficult to maintain levels of trust and engagement during these periods of change, especially coupled with talent shortages, a lack of resource and continuing grumbles with recognised Unions.
Does it make Business Sense to Outsource?
It was agreed that within the ER function, outsourcing is becoming less common and as such there appears to be a shift towards skills moving back in house, predominantly from an expertise, price and control perspective. For instance, when considering case management and legal disputes, it’s important to get to grips with the technicalities but this knowledge has to be used in conjunction with a fundamental understanding of the business. It was suggested that this pragmatic understanding can often be lost through outsourcing, as decisions can’t always be interpreted back to the business. If a decision is made to outsource, success is generally reported when the supplier deploys a dedicated team onto the account to enable them to live and breathe the business / culture by regular site visits and the completion of induction days etc.
Ironically, many businesses that operate a Shared Services model often report that their legal function doesn’t fully appreciate the intricacies of the individual businesses within the Group, which makes it no different to outsourcing the model. Ultimately, pure economics will dictate whether functions are outsourced and it was clear that businesses are becoming smarter about making decisions to outsource in terms of business sense; realistically it doesn’t always work but sometimes it will.
The Talent Shortage
It’s no lie that ER isn’t viewed as the sexiest function within HR, perhaps because it’s considered a policing force or maybe because it doesn’t receive the exposure within the media like it used to. Regardless, for one reason or another, ER just simply isn’t on the younger generation’s radar and as such we are seeing a definite talent shortage within this space. It seems that candidates with solid ER and IR experience are in short supply, which isn’t helped by employers having steep ‘wish lists’ when hiring, for example seeking individuals with experience of working with specific Unions. Typically, it seems that businesses are up-skilling their generalists to deal with IR and ER case work rather than hiring from the external market. From an exposure perspective, it was argued that the recession was the best thing to happen to IR professionals, as it has enabled them to showcase their unique and currently sought-after skills.
So where’s future ER talent coming from? It seems that HR Business Partners are a logical talent pool for this role as they already understand the business and operate the advisory element within their existing position. Additionally, it seems many professionals make the transition from working for a Union before entering an internal ER role, perhaps a reflection of Unions’ depleting relevancy and decreasing membership numbers.
Case management is an integral element of ER; however it can be a great drain on company time, resources and money if not managed effectively. With this in mind, it is key to ensure that site managers are equipped with the knowledge and confidence to tackle cases on an informal and local bases; thus avoiding HR Business Partners being brought down to a more operational level and also to avoid cases escalating to grievances. However, it often seems that businesses aren’t prepared to spend the time or money developing these internal capabilities. When tackling these stumbling blocks, prepare a business case highlighting the proposed savings, by capturing grievances on a near-miss basis and thus illustrating ER’s impact on the bottom line.
Our experts’ views:
a) Case management software can be introduced to help manage the process; a recommended example includes Front Line – http://legal.frontlinesms.com/
b) Following up-skilling training, ensure that local managers have the tools to continue to make decisions on site. Issue employees with ‘Colleague Guides’ outlining the company’s stance or develop an ‘app’ that advises line-managers on how to deal with a situation in the right way. Ultimately, the manager will have to make the judgement call following the incident or issue.
What Challenges do Unions face?
During the discussion, it was noted that Unions are facing a number of challenges which will ultimately play a role in the future of the ER function. Some key challenges are recorded below:
- Unions’ relevancy is depleting, shown in connection to decreasing membership numbers and the improvements in communication channels like the internet
- Moreover, the younger generations aren’t used to having a body act on their behalf and they often feel more comfortable ‘fighting’ their own corner
- This is likely to have a direct impact on the use of IR specialists within the function
- Unions seem to be in ‘protection’ mode and are burying their heads with regards to inevitable workplace changes which are going to cause a fundamental difference to many employee’s roles
- Multiple Trade Unions, recognised by the same organisation, are having to heavily compete for members
- Unions are under large financial pressures, reflected by decreasing profitability; therefore need to create new revenue streams.
- Both Unions and employers need to understand each other’s commercial objectives and appreciate that both parties need to make money. Often just speaking in ‘business language’ to Unions can help achieve this.
Looking to the Future
The ERTT was drawn to a close by pondering what the function will look like in 5 years time. It was agreed that this question could only be answered by assessing how managers and employees will want to engage with the ER team over that time period in terms of communication channels, policies, language and tone. Some key observations included: a much needed line-manager confidence and capability boost, attention to ER’s increasing workload during an already lean period, and the need for Unions to be more strategic as opposed to fighting against the business. This is largely reflective of the economic crash, as it is the firm belief of some Think Tank members that businesses won’t simply ‘bounce back’ to the way they were previously run; therefore organisations will need to redevelop and restructure, which is a journey that Unions should absolutely want to be a part of. Ultimately, there are potentially more interesting times ahead, which presents a great opportunity to partner with the business and be more strategic around talent and skills development.
- Following the economic dip, businesses and individuals will need to fundamentally change the way they operate, as returning to ‘business as usual’ simply won’t be an option
- It’s crucial to maintain and build positive relationship with Unions following a period of change, as it’s likely that there will be many future decisions which won’t be considered hugely favourable
- For organisations that don’t recognise a Union(s), perhaps it’s more important than ever to proactively engage with employees to prevent them seeking future Union representation
- It’s crucial to up-skill line-mangers in terms of expertise, capability and confidence to deal with cases locally. Ultimately, this requires appropriate resourcing which will need to be effectively presented as a business case to management
- A greater level of attention needs to be devoted to developing ER talent in-house to prevent their being a future skills gap.