SEBrexit18 - HR's Brexit Questions

I’m at Symposium’s Brexit and HR conference today. This is nearly really good timing as we’re approaching the crunch point in October when we have to agree the way forward with the EU, and the UK cabinet are meeting at Chequers tomorrow to agree our pitch for that.

However, I think the day after the Chequers meeting would have been even better (obviously everyone had hoped there would have been a bit more clarity by now). As it is, we’ve got lots of questions, and quite a bit of criticism, but few answers.


Tim Thomas, Director of Employment and Skills Policy at EEF, took us through various questions including:

• What does this mean for worker mobility, UK to EU and EU to UK
• What may be the impact on workforce planning and skills
• How can we continue to attract EU workers
• What is your wider business planning around Brexit
• What are the legal implications for teak outside the EU.

And there’s also the additional, and for me, more important, question about developing the UK workforce to make up for falling numbers of EU workers but dealing with this will be long-term and difficult as we’re already close to reaching full employment. (Of course that doesn’t reflect the 40% of jobs some people think are going to be lost due to AI etc.)


Mark Stewart General Manager and HR Director at Airbus added to his company’s public criticism.

The clock is ticking and we still have no further clarity about what is going to happen so how do you run a business, especially a long-term one? Airbus in particular have integrated supply chains with 10,000 parts being shipped across EU, often crossing the channel two or three times. And they also have UK nationals in the EU and vice versa, as well as 80,000 people movements between EU and UK.

For him, Brexit provides a shocking and damning inditement of where we find ourselves as a country and of how not to do business. Customers are looking and laughing at us, and wondering what we are doing.

Key questions for him include what does Brexit mean for:

• UK access and influence to the regulatory regime operation by the European Aviation Safety Agency
• Continued access to the EU single market and any proposed new customs arrangement
• Continued UK access to and influence in the collaborative R&D / Space programmes being run and funded by the EU
• Access to skilled labour and continued free movement of labour
• An agreed phase of transition.

Airbus is trying to engage their staff but this is difficult as there is nothing positive to say. However the next phase of their Brexit engagement plan is beginning tomorrow including a survey of employees who are being directly affected.

This is all true and Airbus' criticism is quite understandable. I don't think Boris Johnson's 'F*** Brexit' remark was an appropriate response to Airbus' comments. However, I do think business needs to understand Brexit is about the UK's people expressing what they want, rather than creating an easy environment for business.

Trust in business is still at quite a low point and so therefore is the belief that doing things for business will benefit the population. If Airbus had avoided paying bribes - sorry, that should say making unaccounted for payments - of £100 million Euros to sell Eurowings fighters, things may have been a bit different.

Actually, that's unfair. I don't mean to single out Airbus, and I appreciate them coming and speaking to us today. The point is a broader one. If many major firms had avoided all the major scandals they've been involved in, then people, including cabinet ministers, might have been more interested in listening to their case. 

So at least part of the answer for how business needs to respond to Brexit, as well as how business becomes more trusted in what it needs regarding Brexit, and how it progresses post Brexit, all boil down to the same thing - for businesses to become more responsive to people (including through the type of engagement planning Airbus is doing) and the societies they operate within.

Actually, that point sort of applies to the EU too.

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#SEBREXIT18 HR and Brexit, or really, Brexit. And a little nod to HR

I'll be attending Symposium's HR and Brexit summit on Thursday (5th July 2018) next week. They've put together a great list of speakers, and if you're able to, you should come.

There are lots of big issues for us to consider so I don't expect the event will be overly political. 

I also don't intend to make my more posting political either, but part of the reason I set up my blog 11 years ago was that I felt I'd colluded (in a very small way) with the broader dysfunctional behaviours in financial services that took us into the 2007 crash, and I wanted to be more open about my beliefs.

In addition, Brexit is an issue that it's hard not to be at least partly political about - eg economic forecasts depend upon what assumptions you choose to make about the future, which will themselves depend upon your politics. I'm also not sure I'll be able to post from a conference on Brexit without being fairly clear about my beliefs around the topic.

But if you're not interested in, or are perhaps vehemently opposed to, these views, and you just want strategic HR stuff from me, please just move on to my next post. (And I know about 48% of people in the UK and probably a higher proportion of people elsewhere will disagree with these suggestions.)

I voted leave. And I still support that decision. As I tweeted at the time, the EU is dysfunctional, self serving and overly bureaucratic, and we'll be best off outside it.

This dysfunction and self serving is shown was shown best in the Greek financial crisis where the EU cracked down on the Greek people rather than supporting them. That is, it was more concerned about itself rather than the population it is supposed to be serving.

However the issue came to the fore as far as the UK is concerned when David Cameron tried to negotiate some tailored approaches which better suited the UK. Once again the EU showed it was more concerned about itself than our population.

One of these areas was immigration. I don't think that this was the issue that led to Brexit but it's clearly a particularly significant challenge for the UK given the small size of the British isles (particularly the sunny bits where most people want to live) and the fact that so many people speak English, and know they can come and live in the UK. That's got nothing to do with any individual who has or wants to come and live here but just recognises the strain which a huge rate of population growth has put on housing, transportation, health and many other areas. An effective and representative government would have recognised these factors and should have wanted to do something about them. Instead, the EU basically said no.

I voted leave mainly on an organisation design perspective - if the EU was a client I'd tell them their top level structure wasn't effective or sustainable and needed to be sorted out. The UK government isn't perfect either and once we've sorted out Brexit I'd like to see us taking action about our head of state (moving from being a monarchy to something closer to a republic) and the house of lords as well. But at least these issues are within our own control to change.

I also think it's important to take action on issues rather than to let them fester because they're too difficult to be dealt with. For example, if someone is living in a bad marriage, and they have tried to improve it, and it's still dysfunctional, I believe that in most cases, they should get out, rather than stay in it for the sake of the kids. This may not be the ideal time to exit the EU, but there never will be an ideal time. If we can't tackle the issue now we never will and we'll be tied to an ineffective supernational government for ever.

We needed to bite the bullet and have the issue resolved now.

So I'm really proud that the UK made the decision it did. I'm absolutely not comparing the EU to the conflictual relationships in the world wars, but I do think our unwillingness to put up with the EU resembled in some ways our being unprepared to ignore tyranny in WW2. Sometimes you need to confront a problem, regardless of the consequence, because it's the right thing to do.  (This is linked, once again, in a very minor way, to the reason that I started blogging, and why I'm posting this now.)

The withdrawal process since the referendum clearly hasn't gone that well, but at least a significant part of that has been down to the EU being the EU, more interested in protecting itself than supporting a member country and its population that has already paid nearly £200 billion net to the EU over the last 45 years. We deserve better, but the EU was never going to deliver it. The difficulties we've experienced in the negotiations are the same ones which lie behind us leaving.

And whatever difficulties we face in leaving the EU, these will be balanced longer-term by having a government that works for us, rather than for itself.

This has got nothing to do with our attitudes to Europe. We're in Europe, want to be in Europe, and will always be in Europe. We want as close a connection with other European countries as we can have. We just don't want to be governed by the dysfunctional bureaucratic machinery other countries seem prepared to accept.

That leaves the issue of the single market and customs union. I think we should be leaving these too. We don't want to be in the EU but we don't want to be shadowing the EU in something which is like the EU but not quite as good. That means we need to be able to do our own thing, including to strike our own trade deals, which means we need to be out of the whole enterprise.

My hope therefore is that the UK cabinet's meeting at Chequers on Friday continues to push for a relatively hard Brexit, and to retain the option of a no deal if the EU doesn't want to negotiate appropriately, which should include reviewing what monies we owe in our separation agreement. Importantly, all of this needs to be dealt with now, rather than left over to the transition period.

I also hope HR focuses on the opportunities of Brexit. -The fairly limitless supply of cheap and well qualified labour from the rest of Europe and elsewhere has, I think, meant that firms here haven't invested in their people or their people supply chains in the way they should have. We've now got no choice, we do need to invest, rapidly, smartly and creatively. Or we won't have all the people we need. That's going to be hugely challenging but it will still basically be a good thing to happen to us.

I look forward to more, and I hope you'll follow my blog posts and tweets, next Thursday. I'll be writing them as apolitically as I can manage!

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Economist Events #FutureWorks2016 - The Productivity Puzzle

Today is the Economist's new annual conference, Future Works, replacing their previous Talent Summit and continuing the theme around digital and other disruptive change started in last year's talent management event.

The morning has focused on digital technology and its role in boosting productivity (although we have also heard about other factors eg migration - not just the upskilling of digital migrants - too).

The productivity puzzle was outlined by Sandra Polaski, formerly at the ILO.

UK productivity has stagnated post the global financial crisis.  Even the US has slowed down.  And let's not start on the EU!

Capital inputs have been significantly reduced.  Labour composition (quality, skills etc) has remained low.  Labour inputs (number of hours) has increased hugely.  The suggestion seems to be that we're avoiding investments in infrastructure and R&D and just using more cheap labour instead. 

Multifactor productivity - the residual - has also declined.  Is this that technological innovation is not actually as profound as the basic invention of the computer.  Or that technological innovations aren't diffusing out of leading organisations into the others, perhaps because the leading companies are controling use of these systems and platforms, putting up barriers to entry for other firms.

We've seen an increasing divergence in productivity and wages.  Sandra suggested that workers do understand this and that it reduces their motivation to work.  The ILO suggests that whereas we often believe that increases in productivity allow organisations to pay more, the link is the other way - increases in reward trigger motivation and hence allow productivity to rise.

This is why Britain still needs a pay rise.

We also discussed a number of issues relating to this.

Eg are we measuring productivity properly?  Are the measures developed for the steel age still relevant for the information economy?  Eg can we even count the numbers of hours people are working any more?

Ajaz Ahmed, CEO of AKQA (Glassdoor's third best employer) suggested that since productivity and efficiency don't matter to people today, the things we need to measure need to focus much more on things like beauty, serendipty etc - things which really do matter to people.   He suggested the key tool used by AKQA is a cultural barometer.

#ATD2016 Looming Productivity Crisis

One of the most provoking sessions at ATD ICE was the Conference Board's presentation on their research into productivity.  As shown in the above chart, productivity around the world in terms of outputs has decreased substantially since the GFC.  That applies particularly to the Euro area (Brexit anyone?).

But the Conference Board then split this into labour productivity and numbers of workers / worker hours, and labour productivity down again into increases in contribution of capital, contribution of human capital and the increase in overall efficiency of production, or total factor productivity ie everything that helps people contribute more effectively.

It's TFP which provides the greatest opportunity to improve overall outputs and means that there's a range of factors which could support this, including better leadership and line management, innovation and the use of technology. 

Ie it is not that workers per se are losing productivity momentum, but that there's a lack of tools, methods and skills that would make them more productive.  Or that management and skills are adapting too slowly to the requirement of new technology, innovation and business model.

There seems to be a particularly issue around this in the UK in the use of digital:

The Conference Board suggesting improving this will need to include: 

• Realising that innovation isn’t free - investment in intangible assets require alignment of business objectives, organisational capabilities and long-term strategy
• Understand that the workforce matters most - not working harder, but working smarter; continued skill improvement is critical; employee engagement is positively correlated to productivity
• Systematic management practices lead productivity - clear target setting, performance tracking, and rewards will be needed for high performance support productivity growth.

I'd add on collaboration - it's about creating organisations which actually act as organisations rather than just groups of individuals going about their own jobs relatively independently, or often in fact getting in each others' way.

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Little Satisfaction from Zero Hours

Zero hour contracts are back in the news today (the picture above - not my best look! - is from my interview about them on BBC News).  The reporting started earlier in New Zealand where the contracts have been abolished, and the continued, but for rather different reasons, here in the UK where the number of employees working on them has increased 15% over the last year.

The Office for National Statistics suggests this number is now 800,000 people, or 2.5% of the working population.  However their suggestion is growth may not have been so high as these figures suggest because the contracts are now better known and the response may just be a result of people tuning into the term.

That's partly supported by Glassdoor's findings that 20% of unemployed people don't understand what the contracts are about (research completed before the ONS figures).  However Glassdoor also found that 25% of unemployed people have been offered a ZH contract and that about half have taken the offer.  That suggests a substantially higher number of people will be on ZH contracts and that the result of not understanding the term is that the ONS is understating not overstating the growth figures.

That matters because as I've posted previously, most of the people who have taken on ZH contracts feel they have had to do so because they needed the money or for other requirements.  A much smaller proportion of people value the flexibility they provide.  This contrasts with CIPD findings but Glassdoor has got real vs just survey data on its side ie if you look through Glassdoor comments on ZH contracts it's quite clear that people with them are no where near as satisfied with their employment as those on traditional full or part time contracts are.

These examples were published in the Daily Mail today:

• "Never worked longer than a 4 hour shift because they didn't want to have to give me a break."

• "The 0 hour contract is bad because you can end up not getting work for days, or even weeks."

• A part-time shop worker described the contracts as a "nightmare", saying staff wanted four-hour contracts to be doubled.

If you think these comments are biased just check the Twitter stream for a search on zero hour contracts (ignore the tweets from New Zealand).

We can debate the pros and cons of ZHCs but the bigger issue for employers at least is the way they're perceived so negatively, whether this is fair or not.  Whilst this is the case they're unlikely to play a role in improving employment flexibility and instead are more likely to be contributing to a continuation of the UK's low-commitment, low-productivity economy.

For more on this debate, here are some of my comments in the Guardian:

“The most common reason that unemployed people turn down zero-hours contracts is the need for a guaranteed level of income to make this a viable alternative to receiving unemployment benefit. These contracts favour the employers over the employees. 

With 38% of these contracts held by 16- to 24-year-olds, it means there is now a significant proportion of the young workforce without guaranteed incomes.

This pay-as-you-go employment causes issues and judging by the comments on Glassdoor, this is not a preferred choice of employment in the long term.”

And there's more on the research in these blog posts too:

• UK HR / Glassdoor / Zero Hour Contracts

• BBC Breakfast: Zero Hour Contracts (a previous BBC interview talking about the research)

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Picture credit: @Mid247

Best country in Europe to get a job

And if you are thinking of quitting your job, this research from Glassdoor reviews some of the economic factors which are important in providing good job prospects.  And the video is my interview talking about the research on BBC World (in Europe).

Basically, the research supports Glassdoor's entry into the Netherlands, France, Belgium, Germany, Austria and Switzerland as well as the UK and Ireland with more national url sites so if you're in Switzerland you can go to de.glassdoor.ch or fr.glassdoor.ch, depending on the language you want to use.  But their experience is that even within Europe there are vast differences between countries with high growth and employment (Germany, Austria, Switzerland) and those with double digit unemployment and slow economic growth (Greece, Spain and Portugal).

Their review of the various factors relating to and the quantity and quality of employment, centred around unemployment, temporary work and involuntary part-time work suggests that Estonia, Norway, the UK and Austria are the best countries to apply for a new job.

The main finding is that regulated markets do seem to suffer more temporary and part-time work as well as unemployment and an ongoing employment gap (between levels of employment before the global financial crisis and today).  I'd also suggests that Spain's growth today is almost certainly linked to the recent easing of their previously right regulations.

However, I also agree with the report's comments on side effects eg the potential to form a dual labour market with the rise of 'mini jobs' (part-time, temporary contracts).  Or in the UK where we don't have high rates of these, the prevalence of zero hour contracts (see my previous BBC interview on these), self employment and increasingly, completely unregulated roles in the sharing economy.

The key point for me, once again, is designing these types of roles for an organisation's employees and to suit their needs for flexibility, and not just business needs.  And that applies for individuals, businesses, countries and the whole of Europe too.

It's great to have a role which gets me thinking about macro level issues as well as just those operating within companies, and gets me thinking back to some of the economic development projects we did when I worked at one of the government's Training & Enterprise Councils 20+ years ago.

You may also be interested in these posts on a similar agenda.  Firstly, for Glassdoor:

• Zero hour contracts (interview on BBC Breakfast)

• The gender pay gap (interview on BBC Radio 4 Today programme) and Gender pay gap in bonuses (interview on BBC News Channel)

• Pay transparency - on Glassdoor and in your organisation too

• Why men won't ask for Shared Parental Leave (interview on Sky Breakfast)

And for / related to the UK's Commission for Employment and Skills:

• Employment, skills and energy

• Preventative skills planning

• Investors in People VI: Outperformance

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Pay Transparency in Talent Management

I posted towards the end of last month about my issues with today's pay differentials, included in the ATD's new Talent Management Handbook (in which I wrote the chapter about Reward).

However changing differentials isn't the only action that's needed, we also need to be more transparent about the differentials we have.

This is particularly relevant in the UK given recent reporting that the gender pay gap for women in full-time senior employment is now higher now than it was in 2005.

It'll be interesting to see whether the introduction of mandatory gender pay gap reporting in the UK next year will tackle this and even more importantly whether it will start to increase broader transparency at all.

Here is this section from the Handbook...

Increased Pay Transparency

Most organizations encourage people to keep their reward secret as people tend to judge the worth of other people by focusing on what they can see people doing rather than the real challenges in a job which tend to be more intangible, meaning that pay levels can be hard to justify.  However we are living and working in an world where people are easily able to share information with each other and more importantly, there is a greater expectation that things will be shared.  Given this increasing level of transparency, trying to maintain secrecy around reward or anything else is increasingly unsustainable.

Transparency is also increasing externally as well as internally, particularly with the growing popularity of sites like Glassdoor and increasing amounts of legislation  around external pay reporting.

However the main reason that pay transparency may be needed is that it is difficult to ask people to trust pay systems when they are opaque, particularly when trust is already low, and also when pay is going to be increasingly person rather than job based in future.

In any case, pay transparency tends not to be a major issue in countries where all or some of the salaries are made public.  Also we in the HR / Talent Management function already know and accept people’s salaries and there is no good reason to think we can handle this information but that other people cannot.

One of the businesses promoting pay transparency is Buffer which emphasizes how transparency breeds trust and leads to better teamwork.  Supporting its ‘open salaries’ approach the company has published how it calculates salaries, bonuses and equity payments and also provides the amounts all its staff receive.

Also see:

• Pay transparency - on Glassdoor and in your organisation too

• Gender pay gap in bonuses

• Glassdoor findings on the gender pay gap

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HR’s Corbyn Option

It’s been a couple of interesting weeks in UK politics since left winger Jeremy Corbyn was elected as leader of the opposition Labour party.

However the party as a whole still seems far from certain about what caused its failure in the election and whether moving to the left is the best way forward, for the party or the UK.  From my perspective, as someone who doesn't usually vote Labour, but am often attracted by some of their proposals, there are several issues to consider.  The charges that Labour wasn’t true to itself and therefore didn’t seem authentic, or that it simply became some form of Tory-lite imitation strike me as being overly simplistic labelling of a number of complex and integrated causes which together led to the results it did.  However there is undoubtedly some truth in them too.  I certainly didn’t feel compelled enough to vote for what I liked about what Labour were offering under Ed Miliband versus some of the things other parties were offering which I found more compelling still.

My own reaction to Jeremy Corby is that he’s very clear about what he believes in and is selling his ideas, or more accurately, engaging people to think differently about them, very well.  His style and approach, allowing disagreement, promoting discussion, and connecting with the electorate, albeit partly determined by the nature of his election, fit current lifestyles and life views very well.  The mainstream media still doesn’t understand how far these things have changed and so attack Corbyn for poor leadership, encouraging even more people to line up on his side.

This isn’t to suggest that everything has been handled well, or that I necessarily expect the new old Labour party to win the next election, whether or not Corbyn even survives until then.  But I do think it has injected a breath of fresh air into the UK and I’d hope that even if Corbyn gets kicked out after his first speech as leader today, that he feels he’s already had a few small successes, in particular challenging the ‘theatrical’ nature of UK politics and helping people see that there are other options to austerity in the way we continue to develop the UK’s economy.

And I think HR can learn some lessons from all of this as well.  Firstly, I think we’ve been playing a new-Labour-like game for far too long - accepting existing business paradigms about managing organisations.  Yes, we need to work within a capitalist economy and help businesses deliver higher returns from their shareholders.  But no business will do this well if that’s their only goal.  Our support for capitalism needs to be complemented by a more social - if not socialist - way of operating.  For example we need to care for and show our care for our people, supporting those on zero hour contracts as well as those we deem to be our talent; we need to design our workplaces, processes and jobs around our people as well as to achieve business goals; and we need to involve all of our people in deciding what we are going to do.  Corbyn’s election and growth in the Labour party membership since he was elected give some indication of the energy which can be unleashed by treating people as people and not simply as workers used to do what a business decides it needs.

A second, potentially even bigger, lesson can be learned from the way Corbyn got elected too.  As all readers in the UK at least will know, Corbyn dispensed with new Labour’s attempt to suggest that we can create a more caring approach to people within the existing paradigms about businesses and our economy.  For him, we need to intervene more and not just rely on the market to always lead to optimised results; we need to enable everyone to succeed and not just accept that growing inequality is a fact of life; and if we enter another recession we need print money not just to save the banks but to protect people and build for the future.

It’s a choice faced by any small part of a bigger system where the part has a different belief system to the larger whole - to either accept and adopt the more general paradigm (like New Labour) - or - to be clear about how you think differently and why these different beliefs would be better (like Corbyn's new Old Labour).  And then to commit to promoting these different views.  I think HR’s been unsuccessful in impacting our organisations not because we’ve not been business-like enough, but because we’ve been too like the rest of the business.  (See last year’s post on Venus and Mars for more thinking on this.)

Thirdly, Corbyn also made an appeal to the whole organisation, inspiring people at the bottom rather than just influencing those at the top.  HR doesn’t have the advantage of Labour’s bizarre election rules but we can still do more of this ourselves - connecting with the employees in our organisations, and using these relationships to show how much we’re valued and needed - though of course this will only work once we’ve changed our perspectives and behaviours, and start focusing at least as much on enabling our people as we do in supporting managers to make people do what our businesses require.

If we start thinking more like this, then I think HR, just like Labour under Jeremy Corbyn, has a chance to be more successful - and by changing the way that organisations run will make our businesses more successful too.

It’s certainly not the prevailing paradigm for how HR needs to operate but I think it could work and I suggest that Corbyn’s success should give us more confidence to try it out.

Jez HR can!

For the sake of full disclosure, I’m not a Labour party member, didn’t vote Labour in the general election or in the Labour leadership ones.  However my political beliefs do often align with the left (see my largely ignored petition / pledge on change.org) and therefore sometimes with Labour’s too.  If there was an election tomorrow, I'd still not vote Labour but I'd be much more likely to vote for them under Corbyn than I was whilst they were led by Ed Miliband.

Oh, and I don't sing God Save the Queen.

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