Business Development & Marketing General HR, Redundancy & Trade Unions

Employing millennials should not be a problem

employing millennialsEmploying millennials should not be seen as a problem but according to some reports in the business press many employers would prefer not to.
The reasons given range from this generation having a poorer grasp of language to being less loyal than older workers, and allegedly having higher absence rates.
Quite apart from the fact that age discrimination is outlawed under equal opportunities legislation, millennials (the generation born between 1980 and 2000) now make up the bulk of the workforce.
While it would be fair to say that employing millennials means bosses need to understand that this age group may view their careers rather differently from previous generations, it is also true that each generation comes with skills and attitudes that are a benefit to their employers. It is also true for many employers that they are customers who need to be understood.
Approximately 10 years ago PwC produced a report that focused on the millennial generation, examining their career aspirations, attitudes about work and level of comfort with new technologies. It predicted that they would make up 50% of the global workforce by 2020.
It also examined the key features that employers would need to understand about this generation: “Millennials’ use of technology clearly sets them apart. This generation has grown up with broadband, smartphones, laptops and social media being the norm, and expect instant access to information”.
This is clearly a benefit for 21st Century businesses.
However, the report continues that employers need to understand that it is a generation whose “behaviour is coloured by their experience of the global economic crisis and this generation places much more emphasis on their personal needs than on those of the organisation for which they work”.
This should be no surprise given that it has been a long time since employees of any age have been able to rely on the “one job for life” career model.
Couple this with having had to make compromises due to the 2008 global financial crisis, such as having to do work that is beneath their skill and education level. Indeed, they are often better educated than previous generations who tend to be more senior people in organisations and they are living with high levels of rent and living costs while at the same time they have been burdened with university debts that were not imposed on those who complain about them. It is hardly surprising therefore that many of them consider their income as derisory when compared to the income of others. Loyalty works both ways.
In addition, they are aware of other factors such as quality of life, environmental concerns, diversity, ethical business and equal opportunities which are becoming more important factors when deciding who to work for.
As older employees reach retirement and the likely restrictions on immigration, employing millennials is not going to be a choice and indeed employers should be looking for the best available skills for their businesses – or the potential to develop them.
It may mean that employers will need to re-think their rigid, hierarchical structures and use a more cohesive, mentoring approach to their management style.
They will need to pay more attention to employees’ training needs and careers aspirations, and to accommodate their increasing focus on environmental and social concerns.
Good workers know when they are being treated well and young people tend to be well able to adapt to a fast-changing world, accordingly employers should focus on helping young people to become good workers as a demonstration that they valued. Employees should no longer be regarded as a burden or treated as being lucky to have a job. It is now the other way round.
Survival in the 21st Century will involve businesses having to adapt rather than expecting their people to adapt.
While most businesses claim that their people are their greatest asset, the reality is only true when their people claim their business is the greatest employer.

Business Development & Marketing Finance General

Addressing the UK skills shortage must be high on the new Government’s to do list

skills shortageBusinesses’ difficulties due to the UK’s skills shortage were high on their list for prompt Government action in the run-up to last week’s General Election.
The skills shortage was said to be inhibiting SMEs’ efforts to compete in global markets, particularly in areas related to digital and new technology.
A quarterly study by the BCC (British Chambers of Commerce) published in November found that 73% of firms that attempted to take on extra workers faced recruitment difficulties in Q3, up from the 64% recorded in Q2.
The skills shortage was compounded, according to Grant Thornton, by a low take-up of the cash available to businesses from the apprenticeship levy with almost half of eligible businesses having not yet spent the money available to them for workplace training.
This week, the Evening Standard carried a letter from Andrew Harding, chief executive – management accounting, at the Chartered Institute of Management Accountants, urging the new Government to review national education and skills policies, in particular the apprenticeships programme in order to address the skills shortage.
Added to all this is the rate at which EU workers have been leaving the UK, with Labour Market figures published in early November revealing that there had been a 132,000 drop in the number of citizens from other European Union countries working in Britain. Later in the month, the BBC reported that EU net migration to the UK had fallen to its lowest level for 16 years.
Yesterday, the latest ONS (Office for National Statistics) report revealed that in the three months to October UK unemployment fell to its lowest level since January 1975.
So, the numbers of people available for work are rapidly shrinking due to a combination of factors, including the uncertainties over immigration policy following the UK departure from the EU, the much-publicised failure of the apprenticeship scheme and the shrinking pool of available UK citizens with the right skills available for employment.
Yesterday’s employment statistics prompted Tej Parikh, chief economist at the Institute of Directors, to argue “”With some strains now appearing in the labour market, the new Government must push ahead with its plans to revamp the UK’s skills system, while initiatives to drive up business productivity should also support stronger wage growth.
“Businesses are eager for the details behind flagship policies like the National Skills Fund and reform to the Apprenticeship Levy.”
For almost three years the Government has been so wholly focused on the Brexit issue, while pressing domestic concerns have been ignored.
Now that the General Election is over with a resulting clear Government majority, it is urgent that the skills shortage is given a high priority among the many pressing concerns of businesses.

Cash Flow & Forecasting Finance General HR, Redundancy & Trade Unions

The tide may be turning to improve workers’ rights

demonstration for workers' rightsIn December Christina Blacklaws, the president of the Law Society, warned in a letter to the Financial Times that employment law on workers’ rights had not kept pace with the changes in the way people work nowadays.
Her concerns were primarily for people working in the so-called ‘gig’ economy after the High Court ruled that Deliveroo riders had no right to bargain collectively.
Her letter said: “Case after case highlights concerns about how the workplace rights of employees, workers and contractors are affected by a law not fit for purpose and not easily understood. The lack of certainty means people are having to go to court to clarify their rights.”
Perhaps in some areas the situation is being clarified by case law such as the recent Supreme Court ruling re Pimlico Plumbers that a sub-contractor cannot be classed as an independent self-employed contractor for employment law purposes and should be treated as a “worker” who is entitled to holiday pay and other basic workers’ rights. This was similar to the Appeal Court ruling re Uber that its drivers should be classed as workers with access to the minimum wage and paid holidays.
The Government has published its proposals for employment law reform, which included giving workers the right to request more predictable hours, as well as offering enhanced protections for agency workers and heavier fines for malicious employers.
Not surprisingly, the more predictable hours proposal was dismissed by TUC leader Frances O’Grady as likely to give workers on zero hours contracts “no more leverage than Oliver Twist”.
No doubt, SME owners will say that the burdens placed on them by the living wage, work-place pension legislation and existing rules governing how they can and cannot treat employees are already onerous enough.
However, given the uncertainty surrounding a post-Brexit future and the fact that much of existing law protecting UK workers is EU law, it is understandable that employees are concerned about their future position.
In an effort to alleviate their concerns, the Government earlier this month issued guarantees on workers’ rights after Brexit, although this was quickly dismissed by an EU and employment law barrister as “meaningless” because there was no guarantee that a future UK Government would enact any future EU legislation protecting workers.
Certainly, the Labour party is offering the prospect of improved workers’ rights and a significant improvement in the power of Unions with a view to reversing the demise of the Unions and the lack of collective bargaining.
Independent of new legislation, the current low level of unemployment and large number of job vacancies would suggest that workers may regain some of their lost power and rights through their right to provide or withdraw their labour and more pertinently their confidence that they can offer it to another employer.
Given that many UK business sectors are already struggling with a skills shortage, particularly in engineering, construction and IT, and that any business that wishes to thrive and grow relies very heavily on its employees feeling valued and engaged with their employer’s future progress, this would seem to be one time when it is in the interests of both to ensure that workers’ legal protection is robust and secure.

Business Development & Marketing Cash Flow & Forecasting Finance General

Is outsourcing a blessing or a curse for SMEs?

outsourcing can reduce office chaosAccording to the GMB union the Government’s use of outsourcing has increased since the collapse into insolvency of the firm Carillion at the start of 2018, pushing the value of contracts up by 53%.
Whether the increasing use of outsourcing is a good or a bad thing depends on many factors.
For those sub-contractors and suppliers to Carillion who either lost contracts, money or work, it clearly was not a good thing as they await the outcome of investigations by Insolvency Practitioners to see whether there will ever be any recompense.
Pertinently for those owed money when a company enters an insolvency process, its employees are paid in priority or by the government if there aren’t sufficient funds, whereas its sub-contractors are treated as unsecured creditors and rarely paid anything like the amount they are owed.
But many SMEs depend for at least some, if not all, of their revenue on providing various outsourced services to their clients, from IT support and website building, to supplying parts or labour as part of a supply chain in construction, engineering and elsewhere.
Many self-employed people also provide services, from book keeping to marketing services.
The problems come when the buyer of the services is less than prompt about paying, often much later than in the terms and conditions, or perhaps they put pressure on suppliers to do work either for free or at extremely low cost, offering the “carrot” of more work or exposure that will be good for their business and result in further work.
Many self-employed people report, however, that the “carrot” fails to materialise and that in fact it puts a downward pressure on people and businesses offering services in their sector.
There is no doubt, though, that for those SMEs with the right skills and offering, and especially where there is a skill shortage, outsourcing can benefit both parties.

How to maximise the outsourcing benefits and minimise the risks

While using outsourced skills can improve a business’ output and reputation while minimising costs or at least avoiding employee liabilities, there are some pitfalls to be wary of.
The main ones involve not having the skills and owning intellectual property in-house which can expose you to supply and demand costs when business is growing. This is common in the construction and IT industries.
There is also the potential for the leak of sensitive information by people who are likely to have less loyalty to the business than those who are directly employed.
Another common problem is a lack of clarity about roles and contractual obligations.
Consistent quality of the work being provided and also adherence to deadlines may also be a problem.
At the initial stages of choosing a business to which to outsource a function or task, therefore, there needs to be very clear and detailed discussion of all the above issues with clear contractual obligations underpinned by deadlines with processes laid down for quality control and confidentiality together with penalty clauses should the provider fail to meet them.
By the same token, there should be a clear agreement on payment amounts and dates.
All of these should be included in a written agreement and signed by both parties as a contract which most likely will only ever be referred to when disagreements arise.
Both parties, those offering outsourced services and those buying them, can benefit from the transaction, but only if there is transparency with safeguards in place as well as honesty and integrity.

Business Development & Marketing Cash Flow & Forecasting General

Are your staff loyal? Retaining valuable staff depends on how you treat them!

valuable staff should be well treatedIn a mature economy with an ageing population and amid rapidly-changing technology, businesses are finding it increasingly difficult to find the skilled staff that they need.
This makes it a buyers’ market for job seekers and the evidence for this has been mounting particularly in sectors such as construction, engineering, manufacturing and IT where wages are rising significantly above inflation.
In December a report from Barclays showed that only 6% of people aged between 16 and 23 wanted to work in manufacturing and official figures have also shown that workers are switching jobs in record numbers.
A BCC (British Chambers of Commerce) report based on a survey of 6000 businesses in January revealed that four fifths of employers in manufacturing reported difficulties in finding the right workers and in the services sector, which makes up nearly 80% of the economy, seven in 10 said they had struggled to recruit.

Persuading valuable staff to stay with your business

At the moment UK employment is at its highest level ever and depending on proposed Government changes to immigration rules, it may become more costly, and difficult, to recruit from overseas.
Projections for 2019 suggest that businesses will have to increase rewards and perks to secure and retain valuable staff and will have to become more ethical. Alternative work conditions, such as remote working may also be on the rise.
What do workers value?
First and foremost, they want to feel valued and respected and to be involved in the progress of the business for which they are working.
While adequate remuneration is a part of this, so, too is the possibility of progressing within the business so listening to their ideas is key as is offering training, particularly if parts of the business process can be automated.  The introduction of AI should not be seen as a threat but can be used as an opportunity to offer upskilling to at least some of those who may be affected.
There has also been a lot of emphasis on the disparity between women’s pay when compared with men’s and the pressure to show female employees that they are an equally valuable part of the team with the same prospects and opportunities is becoming increasingly important.
Employee wellbeing, too, is moving up the agenda.  38% of workers say they have suffered from work-related stress. While pressure can be a positive motivator for improving productivity, when it becomes stress it can lead to mental health problems.
A clearly laid-out set of policies on mental and physical health should be a part of every employee handbook and should be acted upon if the need arises.
Being part of an ethical company that is not afraid to publicise the fact can also be important.
Businesses can benefit from being more innovative in the way they support and reward staff and should look beyond their current policies for ideas.
This more than simply paying high wages, it is your actions and behaviour as a manager and leader that are also key for staff when considering if they should stay.
There are a number of quotes about valuing staff, I like this one by Richard Branson: “Train people well enough so they can leave, treat them well enough so they don’t want to.”

Business Development & Marketing General

The skills shortage and Brexit – can AI fill the gaps?

the skills shortage and AIAlmost two thirds of businesses in the Engineering and Technical sector say that recruiting staff with the right skills will be a barrier to achieving their business objectives over the next three years, according to a survey published by the Institution of Engineering and Technology (IET) in December.
From medical staff, particularly nurses, to engineers, IT specialists and construction workers the UK has had a skills gap for a number of years and has depended on EU migrant workers, such as engineers and construction workers from Poland to fill the gap.
The latest British Chambers of Commerce (BCC) Quarterly Trends also revealed that almost three quarters of service sector firms (71%) struggled to hire the right workers throughout Q4 2017 – the highest figure on record.

The Brexit effect on the skills shortage

With unemployment at a 42-year low, arguably, the skills shortage situation has been made more difficult by the UK’s decision to leave the EU.
Since the Brexit decision, reportedly, fewer workers are willing to move to the UK and more EU workers have been leaving because of the continued uncertainty about their employment and personal security. Net migration to Britain fell to its lowest level in three years in the 12 months to the end of March 2017 and earlier this month it was reported that the UK had dropped down the league tables of desirable countries to move to.
In an effort to address the skills shortage and improve training, the Government imposed a skills levy, that came into force last year, when larger firms were required to pay an Apprenticeship Levy.
Yet this week the CBI criticised the levy, saying that the strategy aimed at improving the skills base was not working and that the levy had alienated businesses. CBI managing director argued: “We need a skills approach that lasts for 50 years, not five,”.
Whatever the pros and cons of various Government initiatives, any attempt to improve the UK skills base is likely to take a number of years before people are sufficiently well-trained and experienced to either join the workforce or progress up the career ladder.

Can AI fill the skills gap?

Any number of “experts” have predicted the demise of various jobs as technological advances make their skills redundant. McKinsey, for example, calculated in November last year that as many as 700 million people worldwide could be displaced from their jobs by 2030 due to technology.
However, it argues that there will be no shortage of demand for workers, only that the types of jobs available will change and people will find they need to retrain, adapt and become more skilled.
Hubspot recently speculated in a blog that the top 10 jobs at highest risk of being displaced by AI were telemarketers, bookkeeping clerks, compensation and benefits managers, couriers, proof readers, receptionists, computer support specialists, market research analysts, advertising salespeople and retail sales staff. Read the full blog here for the reasons why.
Those least at risk, according to the blog, are those who have people or creative skills and the top 10 of these were HR managers, sales managers, marketing managers, PR managers, event planners, writers, software developers, editors, graphic designers and CEOs.
The ability for AI to act as a substitute for basic skill level jobs in such areas as manufacturing production lines or for delivery services is plainly obvious, but as for the rest it will depend on the sophistication, safety and reliability of the technology.
For example, with driverless cars, there have been a number of collisions reported although it is early days yet, and robots will have to be a good deal more sophisticated and “human” before we use them to provide care for elderly relatives.
As for CEOs, they are safe for now at least but could even their days eventually be numbered?

Business Development & Marketing Finance General

Older employees – a valuable resource to retain and retrain?

older employees reverse mentoringSkills shortages in the UK have been an issue for some years and to an extent the gaps have been filled by workers from the EU and other countries.
However, continued uncertainty about the eventual status of EU citizens as the Brexit negotiations stumble onwards is prompting many of them to consider whether they have a future here and making others think twice about coming here.
The skills shortage is not simply a problem that can be solved by recruiting from overseas, though. A combination of near-full employment, an ageing population and rapid technological change is compounding the difficulties businesses face in finding people with the right skills.
Already, according to Open University research carried out in July 2017, the shortages are costing UK businesses more than £2 billion a year in higher salaries, recruitment and temporary staffing costs.
The new Government Apprenticeship levy from those companies with an annual pay bill above £3 million only came into force in April this year. Those businesses below the threshold for the levy were also promised financial help towards training apprentices, 100% for 16-18 year-olds and 90% for those aged 19-plus.
The new scheme aims to produce three million new apprentices by 2020. Even if this figure was met, it would still be some years before these newly-qualified young people build up the experience needed to fulfil many roles in the workforce.
More than half of those businesses asked in the OU survey said they were employing people with a lower level of skills than they had been recruiting for and were paying for training to build up those new employees’ skills.
But addressing the skills shortage requires more innovative thinking.
How many businesses have older, long-standing workers who may not be up to date on the latest developments in their fields and are assumed by their employers to be coasting gently into retirement?
As retirement ages are pushed further and further back no business can afford to ignore the potential there may be in these older employees.
Recently, the BBC introduced a scheme called reverse mentoring in which young employees in their 20s were asked to help older colleagues, in this particular case to understand the likes and dislikes of millennials.
However, the idea of reverse mentoring has been spreading into other sectors. It has been used to help bring older employees up to speed with new IT developments and to modernise out-dated working practices.
The corporate mind-set has regarded the over 55s as old and not to be considered for investment or further career progression.  But such people could be seen as a resource already being paid for, experienced and committed and worth the investment of time and energy in helping to update their skills to be able to contribute even more productively to the business.

Banks, Lenders & Investors Finance General Turnaround

How long will it take to achieve a properly skilled UK workforce?

Skilled Workers K2 Partners Business Blog

The UK’s skills shortages in key sectors like engineering, construction and technology are well known and becoming more pressing in the context of imminent Brexit with its likely impact on the ability to recruit skilled workers both from within and outside the EU.
This weekend it was announced that technology investor Sherry Coutu is launching a new app to link schoolchildren with local employers — in an effort to tackle the skills crisis that is holding growing companies back.
Around 15,000 fast-growing businesses and 500 students are believed to have already signed up to the free service, named Workfinder, which will help schoolchildren to find work experience and to apply for apprenticeships.
Sherry Coutu is the co-founder of the Scale-Up Institute, chair of the Financial Strategy Advisory Group for the University of Cambridge and Founders4Schools, and is a non-executive director for the London Stock Exchange Group and Zoopla.
To be fair, the UK Government has also produced initiatives, firstly setting a target of achieving three million new apprenticeships by 2020, to be paid for by a levy on businesses with a payroll of more than £3 million starting from April 2017.
On Monday, the Prime Minister also launched a consultation, in the form of a Green Paper, marking a proposed new industrial strategy of Government intervention to provide regionally-targeted support for innovation and skills development through high-quality practical skills training relevant to local business needs. Businesses will be consulted on the proposals and the deadline for responses is April 17.

For a properly skilled UK workforce businesses need to get involved

Upskilling to a properly skilled UK workforce will not happen overnight and it needs real, practical, positive contributions from businesses, as well as Government. This highlights a major reason for the lack of skills, businesses expecting to recruit fully trained employees, although they may have a point.
Take this example from London, where a survey from the London Chamber of Commerce and Industry (LCCI) revealed that more than a third of London businesses cited the cost, an estimated £15,000 to £24,000 per year, as a disincentive to taking on apprentices, nor had the HR capacity to handle them.
There is also plenty of anecdotal local evidence of the difficulties young people have each year in finding work experience placements.
As automation eliminates more and more blue collar jobs, increasing the need for more highly-skilled workers, we would argue that sitting back and waiting for “someone else” to do something is no longer good enough.
While it is undeniable that businesses cannot grow if they cannot find the skilled people they need, consultations take time the UK doesn’t have.  Businesses can speed things up by being pro-active in encouraging and enthusing young people via work experience and by offering good-quality training now.
And Government needs to play its part by providing appropriate incentives and support as well as understanding that their imposition of a minimum wage promotes automation. We voted for them.

Finance General Turnaround

Is there a UK shortage of heating and building maintenance engineers?

advert for skilled labourTrying to book a good heating engineer when the domestic heating system goes wrong is a challenge and invariably involves a lengthy wait for an appointment.
The majority of such services at local level are supplied by independent SME traders, who invariably seem to be mature workers. Even Pimlico Plumbers are self-employed.
This would suggest that fewer people are coming into the industry and may indicate that there is a skills shortage. On the other hand, it might be that younger, qualified engineers are looking for direct employment with larger companies.

A closer look at the situation

Heating system breakdowns invariably happen in the depths of winter, often when the system is first switched on when the weather turns colder. In a climate like UK effective and prompt heating and maintenance services are essential.
How many domestic users remember to have the heating checked and the boiler serviced ahead of the onset of cold weather?   Even if they did think ahead there are still likely to be peaks and troughs in the demand for heating engineers since breakdown will be more common when a system is in intensive use.
The age factor may give us better clues as to whether there is a skills shortage in this sector.
Certainly, the Construction Industry has for several years been warning of shortages for all types of skilled and qualified engineers, and this has been used to account for the numbers of qualified engineering workers being recruited from Eastern Europe.
But there is more evidence available to support this claim.  The Building Engineering Services Association (BESA) commissioned research into the industry’s labour market, which was carried out by a Dr Mike Hammond, Director of Education and Research at Hammonds Enterprises Ltd. His findings were published in a BESA report ‘Future manpower and skills availability’ for its conference in late 2015 on the issue of skills shortages.
Dr Hammond’s findings predicted “massive” under supply in every sector apart from plumbing up to 2018, particularly in the heating and ventilation professions. He also suggested that many new entrants into the sector during and in the aftermath of the 2008 financial crisis had missed out on formal training.
However, we would argue that the problem has been building for much longer than that and in part originates in Government emphasis on and efforts to increase university graduate numbers, which had the effect of devaluing the more practical skills and qualifications.
The combination of factors has led to a “generation gap” of suitably qualified and experienced people. While the Chancellor’s Autumn Statement of 2015 announced a levy on large companies to pay for its new three million new Trailblazer apprenticeships, the levy is not due to even start being collected until April 2017.
Even if suitable apprenticeships were immediately available from then, factor in the time it will take to recruit suitable candidates as well as the length of training and it is likely to be several years before there is any noticeable narrowing of the skills generation gap.

Business Development & Marketing Finance General

Skills shortages? Companies should stop whingeing and do something about it

Yet again shortly after the recent budget employers were complaining about a shortage of skilled workers.
The Confederation of British Industry called it a skills emergency and reported that more than 50% of the firms they had recently surveyed feared they would not be able to find the skilled people they needed to grow.
Given that there is no careers advice or service now in most schools, students are expected to arrange their own work experience and in any case it will take time for the effects of any improvements in education to feed through into the workplace, it makes no sense for businesses to call for Government action and wait around for results.
We know of pupils who have found it near-impossible to persuade local companies to provide work experience places, even for a week or two. Equally, businesses regularly use the excuse of being too busy to engage with students by coming into school to give talks, help with relevant projects or allow taster visits to their sites.
Without exposure to the workplace, how are young people supposed to understand the conventions of the workplace and is it really fair for businesses to then complain about new recruits being clueless?
Equally, providing proper apprenticeships as well as training and development for new and existing staff could well prove a faster route to getting the skills businesses need as well as the reward of a more loyal workforce that has benefited from such initiatives.
Like the failure to invest in R&D, many companies have sought to improve their short term profitability at the expense of their future viability.
Owners and directors should stop whingeing, take responsibility and do something about the skills shortage.