The CIPD undertook a survey of HR practices in Ireland and received over 500 responses from the HR profession. This research provides key insight into the current context that HR in Ireland is operating in today and how the profession is responding to workplace challenges and labour market changes.
The 2018 survey found that skills shortage remain persistent in organisations and greater emphasis is being placed on improving and maintaining levels of employee engagement as well as the creation of strong internal development opportunities for existing employees. With a growing pressure on HR to demonstrate how it is adding value, the survey found that the top three factors constraining HR’s contribution to the business relates to line managers’ lack of time, lack of development and support and ineffective devolution of HR.
This research provides key insights into the current context of HR in Ireland and how the profession is responding to labour market challenges and workplace changes. The survey reveals that most organisations have experienced skills shortage (81%) in the last 12 months. This is consistent with the 2017 CIPD survey results and it signifies that, as the Irish economy continues to improve, there are more job opportunities, more skills shortages leading to more incentives for job mobility. In view of this, HR is placing significant emphasis on the retention, development and engagement of existing employees as well as using a variety of methods to source new talent.
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Top organisation priorities over the next two years
The top priorities which organisations are addressing in the coming two years are talent management (58%), leadership development (51%), managing performance (46%) and increasing flexibility/agility (46%). Interestingly, there was little variation in priorities based on organisational size, revealing some convergence of the issues in today’s marketplace.
These priorities have strategic importance, demonstrating the need for HR to deliver to drive organisational success and sustainability. Looking at the external drivers for change over the next two years, the labour market and availability of key skills emerged as the number one external driver of change, well ahead of Brexit and the changing 24/7 economy.
Top HR priorities over the next two years
In line with the skill shortage issues, HR’s strategic priority in the next two years is employee engagement (54%). Following this closely is recruitment and resourcing (42%) which increased in order of priority compared to the 2017 CIPD survey results. In view of persistent skills shortage, resourcing grew in priority, and reflects the organisation’s priority of talent management and concerns over increasing employee turnover.
Strategic contribution of HR
Over two-thirds (71%) of those surveyed worked in organisations that have HR represented at the most senior levels.
The survey also asked about HR’s performance and respondents clearly believed in the ability of HR to add value to the organisation (94%) and 91% agreed that HR meets the expectations of the senior leadership team. However 34% of respondents indicated that HR does not make sufficient use of metric based evaluations, suggesting that HR analytics competency and/or technology/resource infrastructure is insufficient to allow for greater use of metric based evaluations.
The 2017 CIPD HR practices survey identified that HR was lagging in terms of technology use and analytics. A further concern in this year’s survey was that a quarter felt that HR outcomes are not sufficiently evaluated by management.
Sourcing and working arrangements
From a resourcing perspective, organisations are adopting a wide range of working arrangement and resourcing strategies to help deal with the skills shortages, reporting increases in temporary contracts (71%), casual working/as and when required (63%), and agency workers (60%).
A high number of organisations offered opportunities for part-time working (81%), flexible working (74%) and remote working (60%). Four in five companies reported an increase in the take-up rate for each of these. However when we look at how actively companies engaged in these, the survey found that in practice, organisations were more likely to provide a limited approach to flexible customised schedules (47%) and to where work gets done (54%). As engagement and retention is increasingly put under the spotlight, how organisations, and particularly line managers, deal with requests will be of increasing importance.
Line management constraining HR?
In terms of the factors constraining HR from making a strategic contribution, line managers’ lack of time for people management, lack of development and support, along with ineffective devolution of HR activities to line managers, were the top three constraints on HR’s contribution to the business.
This is of concern, and compared to the 2017 CIPD survey, line managers are now more prominent than any other factor. It is clear that many line managers require additional development and support in order for organisations to deliver on their people management agenda. The requirement that line managers invest time in managing their team, and have role clarity and support from HR, need significantly greater attention. The results also revealed that organisations saw a clear link between improving employee retention and improving line manager’s people skills.
The critical contribution of line managers is further demonstrated by the high proportion of companies (96%) that reported strongly encouraging an open door policy with line managers, as they are seen as the first point of contact. This highlights the importance of ensuring line managers are trained and competent in communication and people management.
Taking action on retention
In the light of the significant challenges posed by skills and resourcing difficulties, there was much stronger emphasis on employee retention. This survey found that 40% of organisations experienced an increase in voluntary turnover over the past year, and for another 46% it had not changed in the last 12 months.
The top reasons attributed to employees leaving were better career opportunities and better rewards elsewhere, though nearly a third mentioned issues such as feeling undervalued, work life balance conflict and ineffective management /leadership.
In terms of actions to improve retention, the top focus was on learning and development, induction and work-life balance, highlighting some mismatches. A well-articulated retention strategy that builds the organisation’s brand, culture, and values, understands employees’ needs and aspirations and develops the role of line managers will help improve employee retention.
Growing the talent pipeline
Organisations are using different ways to tackle skills shortages and to grow talent pipeline. Skills shortages were most prominent in operations/frontline, IT and leadership roles. Two-thirds of organisations were focusing on increasing development opportunities for employees, 57% were engaging in succession planning and 48% were investing in employer branding to grow talent pipeline.
Learning and development
While all organisations continue to invest in their people, 50% reported spending between 3% and 9% of their annual payroll costs on learning and development. This represents a significant investment in skills development to help address the skills shortages in the economy.
As part of this a wide range of learning and development activities were being undertaken, with strong emphasis on leadership / management development, followed by coaching and mentoring, reflecting the leadership skills shortage being experienced. As a result of advances in technology, live on-line learning has grown in popularity as a method of delivery, while blended learning was widely used. Both of these were more commonly used in the private sector.
A majority of companies indicated that they were active/very active in providing career development opportunities for employees (58%). However an issue raised by over one quarter of respondents was a lack of senior management commitment to learning and development. While 82% agreed that individual learning objectives are discussed with staff, only 54% agreed that managers engage with informal feedback on learning. These are significant issues and demonstrate that a learning culture is not strongly embedded in many organisations in Ireland.
The gender pay gap - are we real about diversity and inclusion?
The survey captured responses on measuring the gender pay gap (GPG) and currently only 20% of organisations in Ireland calculate their GPG. However there was support to help measure and address the GPG gap including regular monitoring (30%), internal pay transparency (21%) and development of a tool to calculate the GPG (15%). The slow response time in the UK to the legal requirement to calculate and report on gender pay shows the resistance this faces.
The finding that line managers are seen as the overarching constraint to HR’s contribution to the business is significant in the 2018 survey. It shows that the critical role of line managers in bringing HR policies to life is valued but not effectively delivered, and organisations need to embed their people management role as part of the overall business strategy not just the HR strategy. Senior leadership has to provide adequate support to line management to ensure they have time and skills to carry out their people management activities effectively.
Overall, the 2018 results shows a consistent pattern with the 2017 results which signifies that the labour market challenges of skills shortage, talent mobility and engagement are intensifying as the Irish economy continues to expand.
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