The hottest January in years for HR Directors
HR Directors returning to work in 2022 are facing a series of strategic workforce issues – in addition to the immediate tactical questions of hybrid working and vaccination status -which demand clear proactive actions.
Planning for growth
After two years of turbulence many companies are now planning for expansion. The Institute of Directors (IOD) report that ‘Directors’ confidence in the prospects for their own company remain steady with about 54% feeling optimistic about their company’s prospects for the next 12 months in December, compared with 15 percent feeling pessimistic’ – but will they have the capability to deliver these growth plans?
Workforce shortages
According to McKinsey 40% of employees say they are at least somewhat likely to leave their current jobs. Workforce shortages have become a real concern – migrants have returned to their home countries, many older people have retired early, childcare or health problems have led others to exit the labour market. Of additional concern, many entry level and younger workers are evaluating their lifestyle choices after becoming disillusioned with lockdown work life.
Changing balance of power
The balance of power between employers and employees has shifted: in the UK the proportion of employees who are union members has begun to creep higher after decades of decline. Workers are also finding new ways to fight for what they want: Organise, a UK based worker campaign platform, now has more than 1m members after growing rapidly through the pandemic.
Increasing pressure on pay
The fire will be further stoked with real pressure on employees’ take-home pay. Employees are facing cost of living increases with UK inflation rising to a decade high level of +5.1% in November, energy prices set to increase 50%, and national insurance increases further eroding nett pay from April.
Next steps for HRD’s
Facing this this perfect storm, how can HRD’s persuade their leadership teams to invest in their workforce, build capability and increase pay levels?
One area to be challenging the sales and marketing team is whether the company is taking all the pricing available.
Many sales teams get nervous when asked to raise prices or reduce discounts; when the wobbles set in, HRDs need to be asking if this is due to market conditions or the sales team’s limited commercial skillset?
‘At the moment of need, companies need to have the courage to invest in commercial capability to build strong strategic relationships, fully engage customers and then negotiate where necessary to increase revenues and maximise the value of the commercial relationship. And a team which is effectively coached, developed and rewarded are much more likely to stay longer’ says Alex Selwood, Co-Founder of ‘Expression for Growth’.
2022 is the year for HR Directors to earn their seat at the leadership table by adopting a commercial mindset and provide joined up proactive initiatives to deliver the growth plans. Being a true business partner means facing the heat and turning the temperature down.
Tony Bainbridge has been a senior HR leader for over 20 years and is a co-founder of ‘CEO Whispering’.
The next ‘Influence & Impact for HR Directors’ programme starts on February 24th 2022
