CIPD Podcast - Megatrends

Date: 06/08/13 Duration 00:25:27

In this special edition podcast Annemie Ress, founder of PurpleBeach and former Global Head of People Innovation at eBay, Dan Heany, Head of OD and Development at Scope, and John Jackson, Group HR Director at Amdipharm discuss some of the questions posed by our Megatrends report.


Philippa Lamb: The scale and pace of the change we’re now seeing in the global economy is unprecedented but what does that mean for work and the way we carry it out? We know there’ll be opportunities and threats and if we’re to develop the capability to meet both we need to understand the trends now emerging in work, the workforce and our workplaces. 

Now we’re already talking about some of the megatrends shaping the labour market, things like de-industrialisation and the rise of knowledge based services, demographic upheaval, more young people taking part in education and the changes we’re seeing in employment relations and how we work but what else is to come? 

The Megatrends report from the CIPD raises four key questions about the future which the research team believe we need to start talking about right now. They're about job turnover, pay rises, trust and workload, and here to kick off the discussion is Annemie Ress, who’s founder of Purple Beach and former global head of people innovation at eBay; Dan Heany, head of organisational design and development at the disability charity Scope; and John Jackson, group HR director at Amdipharm. 

Annemie, let’s start with that question about job turnover. It slowed, we’ve seen voluntary resignations, retirements, falling for about a decade now, what’s going on there? 

Annemie Ress: So I have a perspective on it and I think if one looks at the macroeconomic trends consumer behaviour is unlikely to return to pre 2007 patterns and especially in the context of organisations different to other recessions, what we’ve seen is less a headcount reduction and much more labour hoarding. So organisations have realised the importance of holding on to talent during these tougher times as opposed to necessarily the mass headcount reductions that we’ve seen in the past, that's certainly a factor. I think in addition to that I think the whole job turnover conversation needs to shift slightly, particularly if one looks at the changing workforce and I think some of this is hinted at in the Megatrends report. So job turnover I would say is not in future going to be an indication of engagement of people in an organisation, and in particular because you'll see things such as stretched life patterns, the introduction of the ageless society and what that basically means is the days of just having one generation in the workplace will be over. Folks will have portfolio careers, work for multiple organisations and in consequence just focusing on job turnover as we’ve defined it in the past with these macroeconomic changes happening, the demographic impact that I've called out is for me, well the debate needs to shift. 

PL: Okay I mean what do you think Dan, obviously I think it’s fair to say this must have been exacerbated by current job insecurity but it does seem to be a trend? 

Dan Heany: I think it is but I think it’s variable. I think there are places where people are finding it hard to retain people and particularly skilled workers at the moment seem to be moving around and about just as they were before the current downturn hit. So given that variability I still think the long term trend is very much as you describe. You mentioned about engagement and engagement not being important or not as important but I think it probably is. 

AR: And I think I was probably not articulate. I think what I meant was that job turnover as an indicator of how engaged your employee population is, in future will not be, I think is not a helpful lens based on exactly the changes in demographics. 

John Jackson: I think it’s too blunt a tool and I think we need to look at segmentation. I think if you look at the low paid there is a high turnover amongst the low paid, particularly minimum wage, people are always going to move on for more money because it’s a significant factor for people in that market. I think where you've got your affluent middle classes in the middle pay, people in those roles and in those pay bands are much more stable and maybe for the moment, given what’s gone on in the last few years, it’s almost better the devil you know than jumping ship. 

PL: Well indeed as Dan said he's pointing up this idea that people that actually have the capacity move, highly skilled people are moving but are you finding that? I mean you’re a pharmaceutical company, presumably those are exactly the sort of people you've got? 

JJ: Highly skilled people and certainly people with rare skills in particular areas the turnover is very high and it’s driven by who is prepared to pay the most and a lot of people going self-employed in those markets or contracting.

PL: Even now? 

JJ: Yeah but with specific skillsets which they’re selling back to organisations. 

PL: So if we’re saying this is segmented where does that take us then in terms of how you recruit and retain? 

DH: Well I think first of all what you were just saying there is it’s quite important because these people you’re describing tend to be the people who have the most knowledge within the organisation, not just the technical expertise but how it’s applied, how it can be utilised from organisation to organisation. I think there's a big risk in losing those people. So in terms of how do you hold on to them I think it’s very difficult because I think part of the attraction is that they want to go and strike out for themselves, that particular group, and I think to a certain extent managers as well also would like to see if they can stretch and challenge themselves a little bit more. So it’s probably a case of giving people more ability to control what they’re doing within the place that they’re working so that they can feel perhaps a little bit free. I think some organisations are actually allowing people time to go and do their own projects, things that they’re particularly interested in and that might be a way that we would retain this kind of person but the problem is we want their skills and we want them to be working full pelt and it’s difficult to arrange that kind of thing for them. 

PL: I mean it’s interesting from what you're saying, if I'm understanding you correctly, you’re not saying the job turnover has slowed down, you’re saying completely the reverse at higher ends of the employment echelons but the middle is where we’re seeing people staying put? 

DH: I think that’s right. We experience the same thing with the lower paid workers as well in that there is a churn of those and that's very often for domestic reasons, so we employ a lot of care workers, we employ a lot of shop managers and those kind of folks and the way that they work and the way that their lives are organised very often means that they have to, child care commitments or whatever. 

JJ: Particularly part timers.

DH: Yeah. 

PL: So from an HR perspective there's wins and losses here aren’t there because obviously longer term relationships with your employees, well there's management wins there aren’t there? All sorts of things that are positive, better ROIs on training, all that sort of thing but you've got a much more complex exercise ahead on managing your really key, your very high paid, people? 

AR: And for me the key question is, is HR equipped to do that? Because I think what is not keeping pace with the types of comments and training that you guys are talking about is that the traditional HR tools and ways in which we would have approached these questions, I think, potentially falls short of meeting the kind of challenges that we will need to be meeting in future. 

JJ: I’d just maybe put a slightly different angle on that. I'm not sure it’s HR that's not equipped to cope with it I think it’s line managers and people managers who aren’t necessarily able to cope with it. 

PL: Because they’re not trained to adapt to the shift? 

JJ: Yes and that then presents a role for HR to support them and educate them and to give them a greater insight into the individuals who possess corporate knowledge which you don’t want to lose but also have skillsets that are scarce in the marketplace. 

AR: If I can give an example and that's really interesting, so I'm either building on or disagreeing, I'm not sure. Let me give you an example. So I think with this changing workforce, looking for more autonomy as an example, what we’re seeing is an increased sense of not being interested in something like career development any more but really looking for the ability to develop mastery and even become greater at what they do. 

JJ: Absolutely. 

AR: So my point being that if an HR professional then coaches a line manager on how to do career development we’ll be missing the mark and not retaining folks. What we need to be thinking about as HR professionals is how do we reframe career development as helping our top talent feel that they develop mastery as they're in an organisation. I think that's one example of how I think HR needs to stretch itself. 

PL: Well that brings us quite nicely actually to our next big question which is about pay and pay rises; have we seen the end of pay rises? We’ve seen real wages now back at the levels, well 2000, 2002, depending on how you like to calculate it; is that about the pain of economic downturn being spread across the workforce? Is there more to it than that? Dan? 

DH: I wonder if we’re kind of resetting, we kind of went beyond where we could be competitively, productively and so on and I think things are just kind of settling back to a level. Pay rises aren’t dead, people are still getting pay rises, I think the median last year was 2.5% in some sectors and it’s not keeping pace with inflation. But I think once the economy turns, becomes more competitive, once we start to get back in that positive growth type agenda I think organisations are going to want to use pay still as a lever for encouraging, motivating, retaining people. So I don't think the pay rise will be dead but I do think it will be less based around looking at annual increments, for example, and more based around what’s happening with the business at this particular moment in time and what can we afford and what’s appropriate in terms of keeping us in the game. 

PL: And the individual outcomes. 

DH: And the individual outcomes yeah. 

PL: Do we agree? 

JJ: Yes I do I think I’d add to that, I think with the shift of the workforce to smaller organisations I think that has a much bigger impact in large organisations. There's a tendency for bureaucracy to have an annual pay review process, smaller organisations you’re more agile and you’re looking at start-ups, franchising, those types of businesses where there's a lot of growth and those organisations cannot afford an annual pay review automatically. They’ve got to look at what their business is actually delivering and what it’s achieving and I think there’ll be much more individual reviews of pay rather than an annual pay review. 

PL: So the whole system we think is going to become more sophisticated in that respect, much more management intensive in terms of the way that you make the rewards. 

AR: I think it has to. 

PL: But then there is that question we were talking about earlier that your most skilled, your most knowledge-laden employees are not really very motivated by pay at all, that's not what it’s about for them beyond a certain level so pay doesn’t work in that way necessarily does it? 

AR: Well I think pay becomes an issue with your very highly skilled employees if they don’t feel their intrinsic motivational needs are met in an organisation. So to be very practical again if they feel their mastery isn’t being developed, if those needs in particular aren’t met and particularly if we look at the Generation Y folks that's where you start seeing this type of behaviour increasingly be, or these trends being, very important. If those needs aren’t met at that stage folks start then looking at, well, let me go through the things that extrinsically can motivate me and it’s at that point that I think money becomes a challenge and could be the reason why people then leave organisations. Although it’s not necessarily the primary driver if their intrinsic motivational needs aren’t met it is the thing that pushes them over. 

PL: It’s straws and camels’ backs isn’t it? Yeah I mean Dan how do you manage this at Scope? 

DH: Well we’ve just had a new pay and rewards policy that we’ve introduced and we’ve taken people off spinal points and regular increments and put them on to bandings and all sorts of things around that. We’re now moving towards performance related pay effectively but again in the third sector it’s very difficult because you never know from year to year whether you’re going to increase your income enough to be able to support, we’ve got 3,500 employees, so to give a generic pay rise across the board is quite expensive no matter what size the pay rise. I think you have to really believe that people work for more than just pay but that it is an important indicator for them in two ways. One, it’s an indicator of how the organisation is treating them and intends to treat them but two, I think some people measure their worth by comparing themselves against others on things like pay. 

PL: So for mid and senior levels it’s peer pressure isn’t it, people measuring themselves against the people around them in their own organisations and elsewhere but we are taking rather a middle class view of this aren’t we in saying that it’s all about job satisfaction and autonomy, for the vast proportion of the workforce. Those people who are now looking at their wages being back to where they were in 2000 and wondering whether we’re going to go down the same road as the US where they’ve seen this going on for many years that you just get slower growth and earnings not rising over time. For them this is much more significant isn’t it. Where are we with them? 

JJ: There is a drive though to force pay up to some extent through the annual increase in the minimum wage. As soon as you start to increase that, that then pushes the next level up or you end up eroding differentials. 

PL: I mean the eroding differentials question is an interesting one isn’t it because we have had so much discussion about the disparity in pay and the multiples we’ve seen at the top and bottom of organisations. Are we going to see those reduce or will they become more extreme, as indeed they are in the States? 

DH: Well it depends on how sensible management is I think. 

PL: Discuss? 

DH: Yes well I think if it goes on accelerating, the difference goes on accelerating at the rate it is, there'll be an even bigger disconnect between the leadership of organisations and the people who work for them and you'll be back to the kind of factory of the 19th century. 

PL: But without the job security that used to go with that? 

DH: Yes the health and safety might be a bit better. 

PL: Absolutely, well let’s hope so. This brings us very neatly to the third big question: are organisations losing the trust of their workers? This must play into it mustn't it? I mean obviously we’ve seen management scandals in the public and private sectors, banking, financial services, NHS, we’re all familiar with all of that but these trends we’ve been talking about play into it too don’t they? Pay disparity, fairness, ways of working, where are we with all of that? 

DH: We seem to be slipping away from the kind of working relationship that was starting to develop I think from the 70s, 80s onwards where people were starting to be more appreciated for what they brought to organisations. Now I think we seem to be going backwards again in terms of it’s all about the organisation and we focus less on what that means for our relationship with the people who are making the organisation what it is. So you’re kind of going back to that drone versus owner thing again and I think whilst businesses are there for a purpose and to return money to the investors and those kind of things, I think we’re starting to lose sight of that top end of how important it is to maintain a relationship with the people who are actually delivering what you’re asking them to deliver. 

PL: Yeah I mean this is the key point isn’t it because we can happily discuss failure of regulation and the part it’s played in this loss of trust, you know; banking, we’re going to see hopefully more qualifications, we’ve had the Banking Commission, all that sort of stuff which hopes to rebuild that loss of trust but what you’re talking about is a much more subtle business isn’t it? So how do we make that happen on the ground? 

AR: Yeah and I think that's a good segue into what I wanted to talk about. Whilst I totally agree with you that one is seeing this widening gap what you’re also seeing is some interesting trends. If we look at technology, right and the role that technology can play in having the employee base mobilise itself, there is an interesting term that's developing in practice as well that's called ‘the personalisation of trust’. Now what that relates to is, let’s use Trip Advisor as an example. If we want to find a hotel or an activity, you go on to Trip Advisor and you indicate, give it a rating and so that is an example of the personalisation of trust. What we are now increasingly seeing, particularly in the tech world, is where employees and prospective employees, look at Glass Door as an example of a piece of technology like this, actually rate employer practices. So the Future Foundation predicts that in a couple of years when prospective employees think about going to join organisations this personalisation of trust would have played a foundational role because you will be able to look at the trust rating given to an organisation and that is, I think, an interesting way in which the broader employee base can actually have a huge impact on the very, very difficult discussion and question of trust. 

PL: And of course all forms of social media have already played into that, haven’t they, people sharing their experiences and ideas about their own employers. 

DH: I think it gives people a voice but whether it changes management behaviour. 

JJ: I think management behaviour needs to change in the way that it uses technology to support what they do. In years gone by it would have been about visibility in walking the shop floor or doing whatever you do. Those things should still happen but it has to be blended with other things and I think technology can be a very effective enabler. 

PL: What sort of things are you talking about because I suppose we’re all familiar with the boss’s blog and all that and there is quite a lot of scepticism around all this stuff, the slight artificial nature of it compared to walking the floor. 

JJ: There is but society is moving in that direction much more and I think it needs to be, you need to stick at it and embrace it. 

PL: But we’re talking about channels of communication aren’t we? Isn’t it really all about authenticity because we can all put messages out there? 

AR: I want to build on the last comment which is, I totally agree with the technology point, I think how you overcome the scepticism is by turning it into a 360 conversation versus a one way connect. 

JJ: Absolutely. 

AR: Yeah here’s the boss’s blog versus okay tell me what you think and engage back with me and then authentically responding and engaging. 

PL: The last question I’d like to talk about is, it is a nice one this because I think we can all talk from first-hand experience, is are we working harder than ever? We’ve got about a third of the workforce now reporting that their job requires them to work very hard and that trend has been on the rise for ten years. Is it true? John what do you think? 

JJ: It is true. The pace of work has increased and a lot of that is technology driven and society has become very instant. If people get a text message there's an expectation to answer it straightaway and I think that is being perpetuated in the workplace. 

PL: Absolutely research supports that too, so they say it’s the tech pushing up the pace it’s not about budgets or job cuts, which is interesting isn’t it? 

AR: I think two things, one, just a reflection. So a couple of weeks ago I worked with a group in California on the old nut work/life balance and we had Gen Y in the room and then everybody else is not Gen Y and so we had exactly this conversation. At one stage the Gen Y folks went, “Actually we feel quite offended by you insisting that technology’s a problem, technology for us is an enabler. It’s a way of staying in touch and we have a very different perspective on it.” So that's my first point. And then the second one is I think part and parcel, we shoot ourselves in the foot by having this conversation around pace etc. What we need to be helping our employees to do is to shift their focus away from trying to manage work and life and actually focus on how you manage your personal capacity. So how do you recover during the day and think about capacity and energy and how you manage that during the day physically, emotionally. So again it’s a very, very different mind-set. 

PL: So are we all agreed then that this intenser way of working will persist once the economy recovers, that's where we’re going now? 

DH: I think it will but I think the problem is that it’s about effort and input rather than focusing on what we’re producing. We’ve got a lot of focus on doing a lot of things but when you actually measure the outcomes we’re one of the lowest levels of productivity in Europe. 

PL: Yeah I mean that is the nub of it isn’t it. We have all this additional effort and time spent and we’re not seeing the productivity wins that we might expect to. The other thing that continues to fascinate me is given the scenario we’ve been painting where everyone is working harder and sweating over their BlackBerrys while they’re eating supper, engagement levels are still high despite all. We’re seeing engagement levels holding up really well, now you would not expect that would you and why is that? 

DH: The engagement between colleagues was pretty good in the First World War trenches. 

PL: Do you think that's what it is? 

DH: And I wonder, I don't know I've got no evidence for that but I think…

PL: That people are fire-fighting and they feel united? 

DH: …you form a community and people actually need to depend and work with each other in order to be able to do that. 

PL: But is that sustainable? We can't feel like that forever surely so will there come a point where people actually think, actually I'm past that phase now and the economy’s slightly recovering and I'm not feeling at all engaged because I've been working too hard for too long.

DH: Well I wonder if it’s the Gen Y again because they’ve got different aspirations, different perspectives on the workplace, different perspectives on what work is about. 

PL: And they haven’t been working so hard for so long. 

JJ: Some of them haven’t been working because there's a lot more students going through and coming out of university, taking time out before they go into jobs, a lot of people doing internships, whether they’re paid or unpaid, so I think there's that factor that's coming through.

PL: So will Dan’s idea then that this “in the trenches, we’re all working together” thing be enough to sustain us as we go forward? 

AR: I fully agree for now but I do again come back to my earlier point around stretched life patterns, ageless society, people with portfolio careers, different generations and one workplace, to your point earlier around the role managers need to play in being much more individual in how they therefore engage with people and I think engagement will be redefined with a much more individualised focus. Again we have to segment the approaches we take and potentially the levels of engagement that we will have with different segments in our business. 

JJ: There is another factor overlaying a lot of that as well which is about regulation which is creating work which was never there or should have been built into the processes. That is very stressful for a lot of people in work where they’re having to cope with a lot of additional regulations coming in. 

PL: Particularly in pharmaceuticals. 

JJ: In pharmaceuticals, finance and many others.

DH: Care. 

JJ: Care is a good one as well and I think those sort of things are having a big impact on how people can do their job because they’re being more constrained in actually the way they can work. There's less opportunity for innovation as a result of that. There's less opportunity to do things in a different way. 

PL: So they ramp up the pressure but they don’t ramp up the productivity? 

AR: I actually think sometimes we forget the basics so we forget to say how do we run great meetings, how do we prioritise effectively in the organisation? How do we do, you know, the basic things like that because we get so carried away with the complexity challenges that we have and in the meantime all we needed to do was actually just get our houses in order from a very, very basic operational and execution perspective and lots of the other bits and pieces will fall into place. 

JJ: I absolutely agree, absolutely agree. 

PL: The complex question is we will be revisiting them and I think we’ve come to the end of our time but the thought that comes to me is we’re all going to be spending a lot more time and money on analytics aren’t we if we’re going to deal with this? 

DH: I think if you’re going to get focused the answer is yes because you can't identify where to put your effort unless you’ve got some evidence to tell you whether you’re being effective or not.

PL: And all the questions we’ve talked about we’ve arrived at more and more segmented workforces haven’t we and different ways of managing. 

AR: Uh huh. 

PL: It’s just all becoming much more complex isn’t it. Optimistic or pessimistic? Is it going to be better in ten years than it is now? 

AR: Exciting. 

DH: I think there'll be more opportunity and it will be a better environment for people who want to grow and achieve things but for those who are quite happy just sitting doing the job that they’re getting paid to do I think it will probably be a little harder. 

JJ: Yes I agree with that. I think if you’re not self-motivated then there is a rocky road ahead for many people. 

PL: We’ll come back to this. Thank you very much indeed. 

If you would like to join the debate you can do that on the CIPD website. Otherwise #megatrends.

Thanks for listening.


Related content

Subscribe, download and more

You can stream each episode, download the podcasts to your computer or subscribe to the series free via iTunes.

Trouble listening to podcasts?

If you are having trouble listening to the podcasts, you can access them directly via Soundcloud.