Institute for Employment Studies outlines key HR challenges for 2017

HR's most pressing challenges for 2017 include getting to grips with a multi-generational workforce, taking a more prominent role in managing change and supporting innovation, according to the Institute for Employment Studies (IES).

The IES has published its annual collection of articles looking at priorities for HR in the current climate, including research on dealing with dementia, employee financial wellbeing, and what lies ahead for HR departments as they evolve away from the long-established Ulrich model of HR.

The editor of the collection, Penny Tamkin, director of employer research and consultancy at IES, said: "To paraphrase Ann Widdecombe, there is something of the night about these articles, and that seems apt given the unwelcome turn 2016 took for many people.

"If you see nothing good in the political earthquakes that transpired, then you will be facing 2017 with anxiety and uncertainty over what the future might hold.

"Alternatively, if you think that Brexit and Trump are the kicks up the backside that political elites needed, you can't ignore the fear, discord and instability that has come in their wakes."

The following opinions represent the IES researchers' conclusions.

Gig economy

"The Uberisation of work is not replacing 'real' work but supplementing it," claims Tamkin, describing claims we are moving towards mass self-employment as a trend that is "far from maturing".

She adds that we may even see this trend come full circle. "The signs are that the system bites back; where they push hardest at the boundaries of more traditional forms of work, they may well be increasingly bound by employment legislation which may offset some of the current relative advantage."

Age at work

The IES points to several studies around increased life expectancy and its impact on the workforce, suggesting four actions for HR on age:

  • Address employee financial wellbeing, given that around one-third of workers do not have more than three months' income in savings to fall back on. Helping employees to plan their finances, including pensions, can increase engagement.
  • Offer rewards packages that allow employees to pick and choose, and that suit their needs and characteristics regardless of age.
  • Extend working lives through flexible work as state pension age rises and people choose (or need) to work well past traditional retirement age.
  • Use attitude and engagement survey data across all generations - some organisations track data throughout an employee's journey from joining to retirement and address any gaps.

Financial wellbeing

"Research also suggests that an employee's wider financial situation is relevant to their behaviour and performance at work," says Catherine Rickard, senior research fellow at the IES.

The report highlights numerous studies that support this claim, including statistics from the Money Advice Service that 40% of working-age people do not have good control of their money and do not manage it well, and numbers from Barclays suggesting that 18% of employees lose sleep worrying about their finances.

Employers should first identify where employees might need financial guidance, and if possible consider providing communications on how their current rewards package can meet their financial goals.

"The evidence suggests that there are clear benefits for all in supporting employee financial wellbeing and making it an integral part of creating a healthy workplace," adds Rickard.

Beyond Ulrich?

There have been flaws in the deployment of the Ulrich model of HR, according to the IES, such as assuming managers would become more self-sufficient and ensuring policies get delivered.

While the model - which splits HR into a "three-legged" service incorporating centres of excellence, business partners and shared services - is still being deployed in many companies, there will be certain factors that lead organisations to adapt or avoid it in future, claims Peter Reilly, principal associate at IES.

These include the increased impact of technology on HR, such as robotic process automation and better data analytics; a greater focus on customer experience meaning there's more emphasis on effectiveness than reducing costs; and changes to the hours and locations in which people work.

"In the end, the future of the HR function all comes back to the capability of HR and its ability to learn, especially from other functions, on data, customer experience, branding and the like.

"Structures can change this way or that but it is the quality of the HR staff, their ability to innovate and help the business improve, that is critical," Reilly concludes.