We have a new Conservative Government which must now move from the euphoria of an unforecast election victory to the hard work of actually governing.
Part of the Government’s agenda will be to overhaul areas of working life, e.g. pay, benefits, welfare, taxation, and employee relations in ways that may herald a significant shift in philosophy around the employee/employer relationship, the like of which has not been seen in the last 20 years.
Firstly, to put this in context we need to cast our minds back to the political landscape of the Blair years. To many at the time, the Labour Government was both pro- Europe and pro-union. The result of this, it can be argued, was a raft of policies and legislation intended to protect and/or increase worker rights and improve the working conditions of working people on the one hand and to appease the legislators of the European Parliament on the other.
As a consequence, this period saw the introduction of the Working Time Regulations, parental leave rights, the start of flexible working, a reduced qualifying period for unfair dismissal, a strengthening of the discrimination legislation and a minimum wage, to name but a few. The mood and philosophy of the Government seemed very much about inclusiveness, collectivism, partnership and to an extent, employee rights – a philosophy that permeated the workplace.
In contrast, and as a result of changes to employment law already made during the Coalition Government’s tenure, (e.g. increasing the qualifying period for unfair dismissal back to two years), the new Government has signalled its intention to remove what it sees as unfair and unnecessary burdens on employers in the form of excessive employment red tape.
Such changes have already been significant for both employers and employees and whilst this shift may have satisfied the majority of employers (76% in one survey), it is unlikely to have pleased employees or trade unions. Now under a majority Conservative administration any vestiges of collectivism will be carefully reviewed and what it sees as undue power and influence in the hands of Trade Unions is likely to be challenged and subjected to further restrictions via the legislative process. For example, we know that the Government has the union balloting process in its sights and has signalled its determination to reduce the likelihood of strikes by insisting that at least 50% of union members must turn out to any vote for strike action- currently there is no minimum threshold, allowing industrial action to be triggered by small numbers of active members.
Some argue that the Government is only reflecting structural changes in the world of work and wider society as a whole; a society which is increasingly driven by technology and social media with an emphasis on working flexibly, including the use of flexible employment contracts and increasing self-employment. Trade union membership is also in decline. Others would argue that the Government’s policies and philosophy are a reflection of their views on the employer/employee relationship and the right of business owners to manage unencumbered by employment legislation and employee rights.
What then are the implications for HR?
I am sure that the majority of HR professionals would say that it is pretty much business as usual. This view may persist until the full effect of Government policy changes filters through to the work place.
We know that the Government is committed to keeping a flexible labour market and reducing costs and red tape for employers. We are therefore unlikely to see for the foreseeable future any significant increases to the minimum wage or abolition of zero hour employment contracts or any legislation that reinforces job tenure. The pressure on employment costs and pay is also likely to remain intense.
These conditions of employment are more prevalent in some sectors than others, e.g. retail, healthcare and hospitality and are often characterised by low pay, poor benefits and a lack of career opportunity. If you are a HR professional in one of these sectors your job may just have got harder and you will need to use all your creativity, skill and determination to increase employee engagement, attract talent and maintain morale and motivation.
Clearly there are also challenges in the high-growth professional sectors and if you are fortunate to be working in one of these sectors your challenges are likely to centre instead, on career and talent management and recruitment and retention.
These changes to Government policy should not necessarily be looked at as good or bad. That is not the point. Change is often a force for good and just as we have demonstrated that we are adept at developing HR strategy from business strategy, so too must we rise to the challenge of a new business environment and adapt our HR practices and processes accordingly.