Work is changing rapidly and with this comes new challenges for HR and payroll leaders. In this 'In conversation with', The People Space editorial director Siân Harrington discusses the latest research with John Whelan, director of Corporate Research Forum, and Rick Norgate, head of product marketing at SD Worx, and asks if HR and payroll professionals are ready
TRANSCRIPT: In conversation with...
Siân Harrington, editorial director, The People Space: Today I'm in conversation with John Whelan, director at Corporate Research Forum, and Rick Norgate, head of product marketing at SD Worx. And we're going to be talking about the future of work and changing working practices.
Siân Harrington: So we're talking about the future of work and it's very difficult to predict this future. But one thing I think we can say is that the demographic trend is a very big issue and this is the issue of the ageing population. And one of the problems with that I think is that employers haven't got a handle on it yet. So, John, can you give us a bit of information about this, the ageing demographic, and also what do you think employers need to do? What does HR need to do in terms of getting ready to navigate it?
John Whelan: Yeah, and I think you're right, there's been a lot of talk about millennials and that's important, but the biggest single thing that's happening in the demographic profile is the ageing of the population. People are working later. The size of the older working population is growing. Retirement ages are starting to grow again, having fallen in the Eighties and Nineties. And I think employers have to get used to having that whole spectrum of workers in the workforce, from maybe 16 to 70, and thinking about how we get generations to work well together. When we listen to what CEOs are interested in, again, the emphasis tends to be on finding new talent and talent attraction as opposed to maybe working with the talent that we've got, developing the talent and reskilling for the future challenges.
Siân Harrington: And, as well as that at the moment, we've also got the issue of a slowdown in productivity and in economies generally. In fact I understand that some economists are saying we may never see the growth that we've seen in the last couple of centuries again. Do you think that's going to hasten the adoption of technology in businesses or do you think that this robot revolution, the rise of the robots, is actually overstated?
John Whelan: I think the investment in technology is a factor in productivity. We should see productivity rises if we invest in technology and probably you haven't seen enough investment yet, particularly in Western Europe and in the UK. So I think that will continue. The productivity puzzle is more complicated than that. We've seen this kind of stagnation in Western Europe and lots of people are grappling with that. I think that is a combination of investment in new product development and technology and in people – and people in leadership in extracting productivity, if you like, from the organisation.
Siân Harrington: Do you think HR is ready for this new technology?
John Whelan: It's a big ask, I think. We’ve all got to upskill ourselves in what's out there, how we can use it, how you can combine different technologies – from the big systems to the small flexible tools that are now available for talent management, talent acquisition and so on. So I think it is an ask for HR people, but we've been running some events with people lately and I'm delighted by the way HR people are embracing that challenge and have showed up in numbers to discuss it at our events.
Siân Harrington: Certainly we are seeing some new technologies coming into the working environment. And sometimes that can be quite challenging. But one of the ways I think it has been very interesting is in the rise of self employment because technologies are either allowing our platform-based economies – a platform based business – or just the fact that people can work more at home because they've got the technology with them. I wonder what you think that means for employers, Rick?
Rick Norgate: That's a good question. I think technology is making it easier to work different hours remotely. If you take our business itself, a high portion of our people are home based, or they travel around and Skype using the cloud. So that's obviously good on one side. And more and more people are wanting flexibility in the workplace. So, the office tools are there to do that. Now the technology's there, really of interest, though, is what HR and payroll functions can do to support that flexibility further.
Siân Harrington: And do you think they're doing enough at the moment?
Rick Norgate: I think it varies. From an HR point of view, if you look at pure HR, there was a lot of work going in to try and make it flexible for their employees. So a few flexible working, on different shifts, shift swaps. I think given the technology to back that up, there's been an interesting piece when you come to payroll. So if you look at the younger generation coming into the workplace, they want the flexibility around their payroll and they want to get paid more frequently. Maybe monthly is not enough. They want it daily or weekly. Most payroll functions aren't set up to do that. So we did some research on that. But actually the good thing is payroll professionals do realise that isn't the way they need to go. I think nearly 70% of the people we asked recognise that flexibility within payroll is going to be key in the coming years.
Siân Harrington: That's interesting. And what about in HR? Because one of the implications of this automation is in job roles, and tasks being taken away. There's a need to look at roles differently and then redesign them.
John Whelan: Yeah. I think what the research is telling us is that technology may not eradicate whole jobs or whole roles but may automate tasks within roles. So that does lead HR back into the world of job design, which has almost become a lost skill. But we know we need to get back there with some serious redesign of jobs so that we can let the robots do the elements that they can do and the people do the bits that they do best.
Siân Harrington: And is the capability there or do you think HR needs to relearn these skills?
John Whelan: There may be a bit of relearning and some reskilling for the function. But you know, it's a core discipline of HR and we should be right in the middle of leading the debate about jobs and their design.
Siân Harrington: SD Worx has just produced some research and within that you talk about the personalised employee experience. Rick, can you tell us a bit more about what you mean by that?
Rick Norgate: It kind of goes back to what I mentioned a moment ago. So, I think if you look at people in their personal life, at home, everything can be very personal and on-demand these days, from what you watch through Netflix and Amazon – it's all recommended based on previous history – through to the kind of shopping habits and buying habits. When you come to work, it's then a very standard process. So one of the things that we've seen is that many businesses shift from the weekly payroll to a monthly payroll because it's easier for the business to manage the payroll once per month But that can put a huge, significant impact and strain on the employees who maybe need to get paid weekly or more frequently. So it's trying to figure out how can we make an experience for each employee that's manageable by the company and not too complicated, but that will actually worked for them in their circumstances.
And I think, John, you mentioned a moment ago about the multi generations in the workplace. That's always been there but what we really seeing is it’s just a bigger gap than ever before. You know, people are starting at the same age as they always have, they're just working much longer now. So there are more generations and it's a wider spectrum. And trying to cater for all of those different groups with their different requirements is a challenge. And that is definitely where HR payroll can, and will, step up to help those people.
Siân Harrington: So what do you think are the core challenges that HR leaders in particular are facing?
John Whelan: I think firstly dealing with the technological revolution that we're all seeing in the digitisation of businesses. Linked to that is how we build in agility to our organisations and hence through that productivity. And maybe thirdly, designing appropriate employee value propositions, which might need to be different for different environments, and how do they embrace quite a mixed workforce now, some of which are core workforce and some which are of the extended enterprise.
Siân Harrington: And what about payroll professionals, what sort of core challenges are they going to have to face?
Rick Norgate: I think payroll professionals, they'll see ongoing legislation, that is getting more and more complex all the time. You know, every year it gets harder for payroll professionals to manage. That's obviously going to be ongoing and always has been for decades. I guess one of the biggest challenges facing payroll is it is often thought of as a kind of a transactional function. It's actually much more than that. You know, payroll needs to have a strategic place at the table along with HR because ultimately paying people is one of the key things within your business.
You know, the research that we did showed that if you don't pay people correctly, over 40% of those people would consider leaving that business. That could be top talent walking out the door. Then on top of that one of the key trends that you see across all the generations now is the financial wellness. That is high on many CEO's agendas. Payroll can absolutely play a part in helping employees manage their financial wellness, come to work motivated, come to work in a good frame of mind. Whereas if they're worried about money they're not necessarily coming to work in the best frame of mind and payroll are a key player in helping employees and businesses with this.
Siân Harrington: And so those are the challenges but in terms of competencies, what do you think are the main competencies HR needs to build into its teams in order for them to thrive, not just survive but thrive, in this new workplace?
John Whelan: Well certainly mastering that technology, and we have seen now, and through our recent CRF events, we've seen people talking about more skills within the HR function itself. I think productivity, the productivity challenge and what does that mean for our business and how HR does influence productivity or work with the business to influence productivity – these are probably two of the major challenges.
Siân Harrington: And what about for payroll professionals? What sort of competencies will they need to do to design and deliver now?
Rick Norgate: Now I think the first one is all really based around the fact that payroll is quite traditional, very risk averse. We're going to have to get more flexible. With more generations in the workplace we've got to demonstrate more flexibility to meet those demands, and that obviously doesn't always go hand in hand with that kind of risk-averse nature. So developing that balance between the two will be really important. And I think a second point, as I mentioned before, is being much more strategic. So, rather than just thinking of the transactional accuracy of payroll, it is what else can we do with payroll to actually support the employees and give them a really kind of good experience at work?
Siân Harrington: Well, there are lots of challenges, but also lots of opportunity I think for HR, core HR, and also for payroll. So I just want to say thank you both very much for your time today.