Brexit Extension Is No Relief for UK Employers

Brexit Extension Is No Relief for UK Employers

Business leaders in the UK may have breathed a sigh of relief last month when the country’s deadline for leaving the EU, originally scheduled for March 29, was pushed back until October 31. The extension is good news insofar as it gives the UK government more time to finalize an agreeable Brexit plan and avoid crashing out of the union, with potentially devastating economic consequences. Likewise, it gives British organizations more time to shore up their own Brexit plans, if they had not done so already. For these organizations, however, and particularly for their HR functions, the extended Brexit deadline is a decidedly mixed blessing, and it would be a mistake to treat it as a reprieve.

One of the most disruptive effects Brexit has had on the UK for nearly three years now has been to introduce major uncertainty into the business environment. Not knowing whether, or when, or how Brexit would finally happen has made it difficult for organizations to make long-term plans that depend on the outcome of this process. It would be one thing if the UK and the EU had decided that Brexit would definitely take place at the end of October, under a finalized deal and with a specified transition plan. The extension agreed upon in April did none of that; instead, it gave the UK government another six months to try and accomplish what it has been unable to do thus far and rally majority support in Parliament around either the deal Prime Minister Theresa May made with her European counterparts last year, or some alternative arrangement that the EU would also accept.

In other words, the uncertain environment that has prevailed since 2016 remains in place: Organizations still don’t know when Brexit will happen and whether it will be orderly or chaotic. As Steve Hawkes, deputy political editor at the Sun, remarked when the extension was announced, another six months of unpredictability “is possibly the worst outcome for business.”

If the UK ratifies the Brexit deal before October, the UK may leave the EU at the start of the following month. If the country fails to hold elections to the European Parliament at the end of this month, it will crash out with no deal on June 1. If Parliament still can’t pass a deal by the new deadline, the country faces the prospect of a no-deal Brexit in November or an additional extension, assuming the EU is willing to grant one. The delay has even amplified uncertainty around whether it will ultimately happen at all, though the government remains committed to achieving Brexit — and organizations must continue preparing for it.

To that end, businesses in the UK cannot afford to slow down their contingency planning for the various Brexit scenarios that may come in the next six months. This is especially true for HR, as Brexit’s impact on workforce planning, retention, and employee engagement are some of its most significant consequences for organizations. While the overall picture of the future remains cloudy, there are a few things of which HR leaders can be sure, at least in terms of what risks they need to plan against. Here are some things UK businesses should be thinking about as they move ahead with their post-Brexit talent strategies:

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We’re Already Living in the Future of Talent Analytics

We’re Already Living in the Future of Talent Analytics

Recently at the Harvard Business Review, management professor Thomas H. Davenport asserted that HR “is right up there with the most analytical functions in business—and even a bit ahead of a quantitatively-oriented function like finance.” Davenport backs this claim with findings from a global survey of senior managers, directors, and VPs at large companies by Oracle, on which he collaborated. The survey found that many HR leaders are well-versed in using data and predictive analytics to make talent management decisions:

  • 51% of HR respondents said that they could perform predictive or prescriptive analytics, whereas only 37% of Finance respondents could undertake these more advanced forms of analytics.
  • 89% agreed or agreed strongly that “My HR function is highly skilled at using data to determine future workforce plans currently (e.g. talent needed),” and only 1% disagreed.
  • 94% agreed that “We are able to predict the likelihood of turnover in critical roles with a high degree of confidence currently.”
  • 94% also agreed that, “We have accurate, real-time insight into our employees’ career development goals currently.”
  • When asked “Which of the following analytics are you using?” “artificial intelligence” received the highest response, with 31%. When asked for further detail on how respondents were using AI, the most common responses were “identifying at-risk talent through attrition modeling,” “predicting high-performing recruits,” and “sourcing best-fit candidates with resume analysis.”
  • These findings suggest that the analytics transformation in HR is farther along than you might have thought, with the caveat that the survey respondents were from companies with $100 million in revenue or more, and are thus more likely to have the capacity to deploy new techniques and technologies that may be out of reach for smaller organizations. It should come as no surprise that more and more companies are adopting AI and analytics into their HR functions; what’s new in this survey data is that HR functions are becoming increasingly confident in the maturity and capability of their analytics programs.

    In terms of where companies are deploying talent analytics, Oracle’s findings track with what we have seen elsewhere: The lowest-hanging fruit is in predicting turnover, while there’s also a lot of promise in AI-powered recruiting, predicting performance, and career pathing. The focus on attrition makes sense, as employees who quit often time that decision to leave around predictable life and career events and drop lots of hints about their plans beforehand.

    If you can use data to detect these warning signs and head off unwanted departures, that can save your organization considerable amounts of money. IBM CEO Ginni Rometty made headlines earlier this month when she told attendees at CNBC’s @Work Talent + HR Summit that IBM’s AI technology was able to predict which workers were planning to quit with 95 percent accuracy:

    IBM HR has a patent for its “predictive attrition program” which was developed with Watson to predict employee flight risk and prescribe actions for managers to engage employees. Rometty would not explain “the secret sauce” that allowed the AI to work so effectively in identifying workers about to jump (officially, IBM said the predictions are now in the 95 percent accuracy “range”). Rometty would only say that its success comes through analyzing many data points.

    “It took time to convince company management it was accurate,” Rometty said, but the AI has so far saved IBM nearly $300 million in retention costs, she claimed.

    But predicting turnover with enough accuracy to add value may not require IBM-level AI capabilities. A new study from Peakon finds that employees begin showing clear signs of wanting to quit a full nine months before they pull the trigger on their resignation. A big-data study drawn from over 32 million employee survey responses in 125 countries, the Peakon report points to several key indicators of attrition that show up months in advance: declining engagement and loyalty, as well as dissatisfaction based on unchallenging work, an inability to discuss pay, an unsupportive manager, and the lack of a clear path to advancement in the organization.

    In a recent interview with David McCann at CFO, data scientist Jon Christiansen notes that it’s much easier to predict who will stay than who will leave, but highlights a few indicators that consistently point toward a greater likelihood that an employee will quit, such as whether the employee feels that their performance is evaluated fairly or that they have control over their workday. Other signs include an employee avoiding conflict, siloing themselves, focusing excessively on rewards over the common goal of the organization, and facing either too much or too little pressure at work.

    The advantage for a company like IBM, which continues to invest heavily in AI, is that it can delegate the detection of these patterns to an algorithm. Predicting quits was the first area the tech giant’s HR function focused on when deploying AI, IBM’s chief human resources officer Diane Gherson explained to Jena McGregor at the Washington Post:

    IBM had already been using algorithms and testing hypotheses about who would leave and why. Simple factors, such as the length of an employee’s commute, were helpful but only so telling. “You can’t possibly come up with every case,” Gherson said. “The value you get from AI is it doesn’t rely on hypotheses being developed in advance; it actually finds the patterns.”

    For instance, the system spotted one software engineer who hadn’t been promoted at the same rate as three female peers who all came from the same top university computer science program. The women had all been at IBM for four years but worked in different parts of the sprawling company. While her manager didn’t know she was comparing herself to these women, the engineer was all too aware her former classmates had been promoted and she hadn’t, Gherson said. After the risk was flagged, she was given more mentoring and stretch assignments, and she remains at IBM.

    IBM is also using its Watson AI for other talent-related purposes, such as learning and development or career pathing, Carrie Altieri, IBM’s vice president of communications for people and culture, noted in a recent interview with Riia O’Donnell at HR Dive:

    AI has been a driving force of innovation for IBM’s HR team. Cognitive talent alerts mine for patterns; it searches for employees who’ve been in a job longer than usual (which could signal flight risk) and can determine whether they need more training to move up. …

    AI also can personalize learning and development for each job role and lead the way in making learning a central aspect of a company’s culture. Altieri said that more than 45,000 learners are visiting IBM’s learning platform every day and 98% of employees access it each quarter. While the company requires 40 hours of learning per year, staff average around 50 hours, regardless of tenure. Learning is a huge part of the culture at IBM, she explained, and the new system gives managers the tools to have more intentional discussions with staff.

    And like other tech companies experimenting with these technologies, IBM is not only deploying its AI capabilities internally, but also selling them as a service to other organizations. Last November, the company announced the launch of IBM Talent & Transformation, a new business venture offering AI skills training in addition to services that “harness the power of AI personalization to guide employees in developing skills and pursuing opportunities to grow within the company.”

    More US Companies Encouraging Employees to Vote This Year

    More US Companies Encouraging Employees to Vote This Year

    Anyone in the US who has recently had a work meeting derailed by their coworkers talking politics knows that the elections coming up on November 6 are attracting far more attention and interest than midterm elections normally do. The political environment in the US remains highly charged and polarized, while these elections are seen as having particularly high stakes. Poll watchers are expecting voter turnout to be high, partly helped along by a growing number of employers giving their workers paid time off to vote on Election Day. Beyond that, Washington Post columnist Jena McGregor reports, they are actively encouraging their employees to go out and vote:

    At Cava, the Washington D.C.-based chain of Mediterranean fast-casual restaurants, its 1,600 workers will get two hours of paid time off to vote on Election Day this year if they request it in advance, a nationwide perk for its workers. For the first time, Tyson Foods, the meat company, has launched a company-wide voter registration initiative, with many of its plants participating in an effort to register employees and offer details about early voting, absentee ballots and voting locations. Levi Strauss & Co. has named volunteer “voting captains” in each of its offices and distribution centers to hold registration drives and educate workers; it’s also giving employees, including retail workers, paid time off to vote.

    Organizations that give their employees time off on Election Day, whether they make it a holiday or simply let staff take a few hours off to vote, do so for a variety of reasons. At some companies, this decision stems from a culture of social responsibility; at others, it may be part of an effort to improve their public image. Though few companies take public positions in favor of a particular candidate or party, still others may be hoping that their employees vote a certain way. It could also help boost employee engagement and perceptions of the organization; a recent study by O.C. Tanner found that US workers who get time off to vote have more positive things to say about their employers than those who don’t, HR Dive reported last week:

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    More US Employees Telecommuting than Taking Public Transit to Work

    More US Employees Telecommuting than Taking Public Transit to Work

    New estimates from the US Census bureau, published last week, show that 8 million workers in the US are now primarily working from home, making telecommuting the country’s second most common way of getting to work after driving, displacing public transportation for the first time, Governing magazine reported on Friday:

    Last year, an estimated 5.2 percent of workers in the American Community Survey reported that they usually telecommute, a figure that’s climbed in recent surveys. Meanwhile, the share of employees taking public transportation declined slightly to 5 percent and has remained mostly flat over the longer term.

    The number of Americans telecommuting at least occasionally is much larger than what’s depicted in the federal data. That’s because the Census survey asks respondents to report how they “usually” go to work, meaning those working from home only a day or two each week aren’t counted. A 2016 Gallup survey found that 43 percent of employees spent at least some time working remotely. …

    Those working from home at the highest rate — 11.7 percent — in the Census survey were classified as professional, scientific, management, administrative and waste management services workers. Other industries where telework is about as common include finance, insurance, real estate, agriculture and the information sector.

    Last year’s American Community Survey data also showed that the number of US employees working remotely was on the rise: An analysis of that data found that 2.6 percent were working entirely from home—more than the number who walk and bike to work combined. Other surveys last year and this year have also found more Americans working from home, particularly workers over the age of 55. Employers see this trend continuing for the foreseeable future, and many are changing their policies around flexibility and remote work in response to greater demand for these options from employees in critical talent segments. Most US companies, however, don’t have explicit remote work policies, a survey earlier this year indicated.

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    How to Use Diversity and Inclusion to Engage Hourly Employees

    How to Use Diversity and Inclusion to Engage Hourly Employees

    Hourly employees make up over 50 percent of the total US employee population and a critical segment of the workforce at many organizations. While employee engagement efforts typically focus primarily on salaried employees who are perceived as having more of a long-term commitment to the organization, hourly employee engagement and loyalty are growing concerns for HR leaders in today’s tight labor markets. According to recent Gartner research, hourly workers are more engaged in their jobs when they are satisfied with their employer’s diversity and inclusion efforts.

    In the past year, we’ve seen many large companies launch new initiatives to better engage and retain their hourly employees, whether through education benefits or opportunities to work with local nonprofit organizations. HR leaders have also seen improvement of hourly employee engagement when these employees have positive perceptions of their organization’s D&I activities, our research finds. In fact, when hourly employees are satisfied with D&I, they exhibit almost twice the discretionary effort and almost three times the intent to stay compared to those who are not satisfied. However, only about half of hourly employees are currently involved with D&I efforts and HR leaders are uncertain how to use D&I to engage this population.

    Our D&I research team has uncovered three ways HR leaders can leverage hourly employee engagement in D&I to make a positive impact on the organization:

    Integrate D&I in Current Processes

    HR leaders should integrate D&I efforts into pre-existing engagement initiatives, such as team meetings, to ensure that cultural values and behaviors are articulated and implemented consistently throughout the organization. This approach addresses a key challenge hourly employees face when connecting to D&I at their organizations: They do not feel included on their teams. By building hourly employee inclusion into existing processes, organizations can improve team performance without creating additional structures for HR to manage.

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    Global Talent Monitor: Discretionary Effort Continues to Fall in US as Employee Confidence Dips

    Global Talent Monitor: Discretionary Effort Continues to Fall in US as Employee Confidence Dips

    In the past three years, the number of US employees willing to go above and beyond their employers’ expectations at work has fallen by 10 percent, from 27 percent in the second quarter of 2015 to 17.8 percent in Q2 of 2018, the latest data from Gartner’s Global Talent Monitor shows. Globally, employees’ confidence in business conditions has fallen for the first time since Q1 of 2016.

    One possible driver of employees’ declining levels of discretionary effort is a lack of satisfaction with opportunities to grow and develop in their careers. Nearly 40 percent of employees in the US and globally ranked a lack of future career opportunities as their main source of dissatisfaction in a previous job, displacing compensation as the number-one driver of attrition both in the US and around the world. Over the past few years, we have seen development opportunity grow to be an increasingly critical element of the employee value proposition, both as a driver of attraction for new employees and, in its absence, as a reason for quitting.

    “With recent U.S. reports showing little growth year over year in real earnings, workers hope to achieve more satisfaction in their jobs through better titles and opportunities to advance and grow in their current careers,” Brian Kropp, group vice president of Gartner’s HR practice, said in a statement. “To prevent further reduction in workplace effort and to retain top talent, employers should pay closer attention to employee dissatisfaction about the lack of career opportunities, particularly if wage growth remains stagnant.”

    “Leading organizations are able to use their employment brand to illustrate why their career opportunities are better than their competitors,” he added. “A company’s EVP directly correlates to employee engagement levels, as workers are more likely to work harder and stay in their current positions if they are highly satisfied with their company’s EVP offerings. Gartner data shows that organizations with high levels of employee engagement report financial outcomes three times higher than firms with lower engagement levels.”

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    ReimagineHR: A Tale of Two Employee Monitoring Programs

    ReimagineHR: A Tale of Two Employee Monitoring Programs

    As employee monitoring technologies move out of the realm of experimentation and into the mainstream, concerns over their impact on employee privacy, data security, and trust have become even more pressing. In a breakout session at Gartner’s ReimagineHR event in London on Wednesday, Principal Executive Advisor Clare Moncrieff elucidated the difference between the kind of employee monitoring we trust and that which we don’t. She began by asking the attendees if they agreed with the following statements:

    1. “Recording the location, actions and communications of employees is a necessary and important part of business operations.”
    2. “Recording the location, actions and communications of commercial airline pilots is a necessary and important part of business operations.”

    Responses to the first statement were mixed, with about half the audience saying they agreed or strongly agreed and the other half saying they disagreed or felt neutral on the subject. On the other hand, every single attendee agreed with the second statement. What’s the difference?

    One reason why the recording of commercial airline pilots was uncontroversial is that it has been a standard practice in the industry for nearly 60 years. Flight recorders (commonly referred to “black boxes”) are understood to be a normal and necessary component of air safety procedures. Their value in diagnosing and correcting problems that can lead to catastrophic accidents is unquestioned, and everyone—passengers, crew, airline administrators, regulators, and the public—understands and appreciates why they are needed.

    Pilots don’t see these devices as intruding on their privacy, even though they record every conversation they have in the cockpit, because their benefits are clear and because airlines only use the information for a specific and clearly defined purpose. Data from the recorders is only accessed after an incident and is never shared or published. Black box data has never been used for purposes other than intended and there has never been a known breach of flight data security in six decades of using these recorders. Also, data from flight recorders is only one of many inputs into an inquiry, which also incorporates first-hand accounts from the flight crew.

    Flight data recorders meet all the key criteria of an effective employee monitoring system, according to our research at Gartner: The purpose and beneficiary of the technology is clear and consistent, access to the collected data is strictly controlled, and employees’ voices are taken into consideration when interpreting the data. When monitoring follows these guidelines, employees are much more likely to trust and accept it.

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