16 June 2017 - Kate's Blog
What do the general election results mean for HR and Recruitment?
On the day the election results were announced, Peter Chase, chief executive of the CIPD, summarised exactly how many were feeling - uncertain and confused about the future.
He said: “The General Election was called to provide the next government with a strong mandate to take us through Brexit but this morning we face yet more uncertainty. In order for the economy to remain resilient it’s vital that we have a working government that brings the UK the stability it needs at this crucial time. Brexit negotiations are high on the agenda and how these now move forwards will be a critical area of discussion.”
Brexit and Immigration
The Conservatives promised to reduce immigration and double the immigration skills charge for all businesses employing migrant workers to £2,000 a year by the end of the parliament, using the revenue generated to invest in higher level skills training for workers in the UK.
They were also committed to bearing down on immigration from outside the EU across all visa routes, with foreign students expected to leave the country at the end of their courses unless they meet new "higher" requirements allowing them to stay.
In what is already a difficult time to recruit due to low unemployment, , HR professionals expect the competition for well-qualified talent to increase even more as a result of the UK’s decision to leave the EU and the clamp down on immigration, and predict further difficulty recruiting senior and skilled employees over the next three years.
As Mark Easton, BBC home editor, explained: "With a Conservative government, the UK must prepare to become a low-migration economy. The party's restated commitment to reduce net-migration to the tens of thousands is ambitious and radical. Health, construction, social care, hospitality, agriculture and the creative industries are among the areas that will have to adapt to a squeeze on the supply of foreign labour.
“The Tories' plans to increase the levy on firms employing overseas citizens is designed to change the economics of using migrant workers and encourage business to train and recruit British workers. However, many business and service sectors are already lobbying for transitional visa arrangements to give them the time to adjust to lower migration levels."
The conservatives were however looking to make the immigration system work for those sectors of the economy that are suffering shortages in skills by recommending the setting aside of significant numbers of visas for workers in strategically important sectors such as digital technology, without adding to net migration as a whole.
Zero hours contracts
As part of its manifesto, the Conservatives promised to provide more protection for workers’ rights on zero hours contracts although no announcements have been made on this issue as yet. To promote positive employer brands, businesses can follow the example of McDonalds which offered 115,000 workers the option to move to fixed hour employment in April.
The Conservatives also pledged to raise the National Living Wage to 60% of the median wage by 2020 but again, nothing can now be certain. It was also expected that the current pay gap reporting would be expanded. At present, employers have until April 2018 to release this information although take up has been slow so far. It is worth noting that transparency in culture, equality and pay gap reporting will have a positive impact on your employer brand, regardless of the legal requirements to publish data on these issues. As part of the Conservative Manifesto, listed companies were also going to have to publish the ratio of executive pay to the broader UK workforce pay and there was due to be a legislation to make executive pay packages subject to strict annual votes by shareholders
Existing workers’ rights were expected to be incorporated into UK law when the UK leaves the EU. Additional pledges made by the Conservatives during the election campaign included the promise to significantly expand the rights of all workers, including those that work for themselves as well as help for businesses to improve their flexible working options - although this promise is now in doubt.
The Conservative manifesto explains how they were looking to maintain the triple lock pension guarantee until 2020, then replace it with a double lock - meaning pensions will rise in line with earnings or inflation, whichever is highest. A commitment to raise the tax-free personal allowance to £12,500 by 2020 is likely to stay.
There were set to be tougher punishments for those caught mismanaging pension schemes. New criminal offences were to be considered for company directors who "deliberately or recklessly put at risk" a pension scheme's ability to meet its obligations along with changes to the law to ensure listed companies nominate a director from the workforce and create a formal employee advisory council or assign specific responsibility for employee representation to a designated non-executive director. Again it is unsure whether these will still go ahead.
So what can we be sure of?
Not much would be the quick answer. Whether any of these new laws will come into effect in this Parliament is now uncertain. David Davis has admitted parts of the Conservative Party's manifesto will have to be ditched after the Tories failed to win a majority at the General Election.
What should HR professionals and recruiters be doing?
So for now, it’s business as usual. What we do know is that employment remains strong and candidates still hold the power. Therefore, whatever the longer-term consequences of the election, HR professionals must focus on creating a streamlined hiring process, harnessing the benefits of technology and recruitment agencies to address urgent skills gap issues.
Peter Cheese, chief executive of the CIPD, summarises it well: “There is of course a much wider agenda that we need the new government to deliver on as was clear through the public debates. A key focus must be on addressing workplace issues through a much more human lens. By focusing on improving transparency in business, protecting and raising awareness of rights for workers and boosting investment in skills, we can hope to ensure that work can be a force for good, regardless of how, when and where people work. We look forward to working with the new government once it has been officially formed, to address these issues and ensure the UK is in a strong position to be a high-skills, high-value economy.”
How do you think that the election results will impact your recruitment strategy? We’d love to hear your comments. Connect with us on twitter @oxrecruiting or email me at email@example.com