Leinster House
Chartered Institute of Personnel and Development (CIPD)
Wednesday, October 1st at 11am-12 noon
- CIPD Ireland Honorary Chairman Mr Seán O’Driscoll
- CIPD Ireland Director Mr Michael McDonnell
- CIPD Research and Policy Adviser Mr Gerald Flynn
Topics
- Intro to CIPD MMcD
- Employment Agencies Bill MMcD
- Social Partnership GF
- Managing Talent SO’D
- Performance SO’D
- Pensions SO’D
Opening Statement
Chairman and members of the Committee
I would like to thank you for the kind invitation to join with you in considering some of the major strategic issues in people management and human resource development in Ireland today.
This is our first opportunity to meet with your committee and I hope that we may be of some benefit in briefly outlining a few of the significant challenges facing those in the workplace.
I am joined by the CIPD Ireland chairman, Seán O’Driscoll, a former HR director at the ESB, and by employment specialist Gerald Flynn who is the research and policy adviser to the Institute in Ireland.
The Chartered Institute of Personnel and Development now has over 6,500 members in the Republic, which is a near doubling of membership since 2000. This reflects the growing recognition of management competencies in the area of people as the drivers of innovation and productivity and of key services in both the private and public sectors.
The Institute has seven regional committees throughout the state and we also work closely with our CIPD colleagues in Northern Ireland. We are part of the wider CIPD which has 125,000 members mainly based in Britain. CIPD Ireland is affiliated to the World Federation of Personnel Management Associations and the European Association of Personnel Management.
70th Anniversary
The Institute’s presence in Ireland goes back to 1937 and last year it was our pleasure to mark our 70th anniversary with a presentation of the inaugural Charles E Jacob medal to the then Taoiseach, Bertie Ahern to signify his skills and dedication towards beneficial employment relations since the mid-1980s.
Mr Jacob, a joint managing director of J&R Jacob biscuits firm in Dublin, was one of the original founders of our Institute in 1913. He was a far-sighted employer, from the Quaker tradition, who saw the need for improved working conditions, health services, sporting activities and education for his employees at the time.
Nearly 100 years later we still face many challenges in the employment sphere and a current one is the modernisation of our regulations governing agency employees. In 2001 we made a submission to the Department on this issue and welcome the commitments in the new national social partnership agreement to advance this legislation in the coming weeks.
We have been concerned at the growth of employment agencies where some are operated by people with few professional qualifications in HR or people management practice. Unfortunately a few agencies, some based overseas, have treated migrant workers as if they were running a 19th century ‘hiring fair’. That is why we welcome the proposed monitoring and advisory committee proposed in the Employment Agency Regulation Bill to oversee employment agencies. Up to now the only main requirement was financial solvency rather than operational competency and good standards in recruitment practices.
I referred briefly to the new draft agreement on national pay terms which we welcome as providing some sense of continuity and stability in a period of financial upheaval and rapidly rising unemployment, mainly arising from redundancies and company closures. So far this year the number of job losses has increased by over 40% with 24,000 losing their jobs since last Christmas.
This brings me to the key area of managing and developing talent in the state. Our investment, across the board, in workplace training is still disappointing and lags behind practice in other developed EU countries. We feel that more emphasis needs to be placed on in-company training and skills development. Instead we are more likely to see a rush towards training when people lose their jobs as a remedial measure rather than a planned enhancement.
Training spend
The CIPD 2007-08 study of Training in Ireland with University of Limerick, which will be published next month, shows that average expenditure on learning, training and development in Irish organisations amounts to 3.13% of payroll costs. The percentage invested in training appears high but it does not, as I said, compare favourably with our EU competitors. Countries such as Germany and France spend significantly more and average EU expenditure on training is 4.15% of payroll. Our survey also points up a worrying trend that spending in Ireland is disproportionate across sectors of the economy.
Our ongoing review of the more vulnerable parts of the economy, mainly smaller indigenous industry, lower-skill assembly and processing employments, suggests to us that up to 27,000 workers are at serious risk not just of losing their jobs but of never getting another one when the employment market improves. No employee in Ireland, in their late 30s or mid-40s, should have to face the prospect of being dubbed a ‘no-hoper’ when they have the potential to contribute over 25 years towards our growth and development.
It is up to senior management to take the strategic decisions to enhance training and development with the support of the state agencies. This is where we see a role for a reformed FÁS to work more closely with people still in jobs rather than waiting for them to be referred on from a social welfare office. Trades unions also have a role in being honest advisers to their members and advising them to avail of training as the best means of securing their futures rather than trying to delay inevitable change or preserve inefficient practices.
Two final issues I should like to address briefly are performance and pensions. Performance management and enhancement is an accepted key practice in successful commercial operations but we have been slow to adapt it in the public service and in smaller organisations. It is not about ‘churing’ or firing one-tenth of your employees each year, as is sometimes presented. It is about helping people do a better job and recognising it when they do so, often with a bonus or additional reward. It is also about helping people overcome hurdles which restrict their contribution whether through a lack of resources, training and quality line management.
Pension planning
Finally, on the issue of pensions, we need a radical overhaul in public policy to manage the pensions crisis which we are doomed to face if significant decisions are not taken soon – by which I mean in the next two years. We feel that your committee may wish to consider workplace and remuneration proposals to enhance some of the initiatives suggested last year by the Minister for Social and Family Affairs, the late Seamus Brennan. This would involve a blending of PRSI increases with a personal savings plan, akin to the successful SSAI scheme, which would ensure that both employers and employees, with the support of the State, would provide an increasing level of savings with which to purchase pension annuities.
Had we adopted such a scheme ten years ago, in tandem with the Exchequer allocation of 1% of GNP towards the public pension reserve, we would not face as big a challenge as we do today, But there is no point in stating that 'I wouldn’t start from here' when we must involve all stakeholders – employers, employees and the State – in defusing the so-called ‘pensions time-bomb’.
I want to thank you chairman and the committee members for listening to me outline these key topics. Along with my two colleagues, Seán O’Driscoll and Gerald Flynn, we would be happy to probe these aspects in greater detail if the members require it.