A third of human capital risk incidents not reported

Out of 47 incidents involving employee ethics only 20 were mentioned in FTSE 100 firms’ annual reports

Up to 30% of risk incidents are not being addressed in FTSE 100 annual company reports, according to research from the Valuing Your Talent partnership.

The Valuing Your Talent partnership, which brings together the CIMA, CIPD and CMI, found that many organisations aren’t including vital workforce-related information – including health and safety incidents, data breaches, skills challenges and employee turnover – in their annual reports. This could be creating a risk to users of these reports, such as investors, who base their decisions on the information contained in annual reports.

Illustrating your company’s true value used the media to assess whether FTSE 100 firms are providing a thorough and honest overview of the risks they encounter or are merely fulfilling the minimum reporting requirements. A media search was undertaken using online news outlets (including the BBC, the Financial Times and The Economist) which were then compared with annual company reports to see how the business handled the incident.

Out of 47 incidents involving employee ethics only 20 were reported, 10 were partially reported, and 17 were not commented on at all in annual company reports. Out of 21 employee health and safety concerns seven were not reported on.

However, Valuing Your Talent found that on the whole human capital reporting is on the rise in the FTSE 100. The number of sentences written about human capital subjects in annual reports rose by 18% between 2013 and 2015, despite the amount of incidents that were not discussed.

The research says although there has been an overall increase in reporting “it is debatable whether investors and other stakeholders will be able to make informed decisions based on what are generally positive reports on a variety of human capital issues”.

Peter Cheese, chief executive of the CIPD, called for increased clarity around risk incidents. “With many more questions being raised about corporate cultures, diversity, engagement and wellbeing, as well as the changing nature of the workforce and how these impact productivity and risk, we need greater transparency and consistency of human capital reporting,” he said. “We need more common definitions of key people and organisational metrics, and for businesses to better articulate how they are using these measures to provide consistent insight for all stakeholders.”

Ann Francke, chief executive of the Chartered Management Institute, warned that by not reporting on incidents companies could be creating a “huge blind spot”.

“The number one driver of productivity and business growth is the quality of management and leadership, because that’s critical to how far organisations get the best from their people,” she said. “But if managers don’t have sight of good people measures they have a huge blind spot about performance and can’t make the best decisions about their business.”

Stress worse at home than at work for a fifth

Just 46% of employees say they feel able to discuss stress at home with their managers

One in five (19%) employees are more stressed at home than at work, according to MetLife’s Building Resilience In The Workplace report.

The research found that 67% of workers feel domestic issues – including childcare, looking after elderly parents, and financial pressures – are having an impact on their work performance. A fifth (21%) of women said their home life is more stressful than work, compared with 15% of men. Just 46% of employees feel able to discuss home stress with their managers, however.

Tom Gaynor, employee benefits director of MetLife UK, said employers can help by equipping staff with the tools to cope with stressful home situations.

“Managers have a crucial role to play in helping employees manage their own stress and we know from ourEmployee Benefit Trends study that a supportive manager is a significant driver of employee engagement,” he said. “Creating a supportive leadership culture helps managers tune in to employees’ emotional ups and downs.”

While staff report stressful home lives, working from home appears to be on the rise according to separate research from the TUC, suggesting a need to assist employees to work remotely in an effective rather than stressful way.

The TUC’s research found that the number of UK employees who say they usually work from home has increased by a fifth (19%) over the past 10 years.

Men accounted for the majority of homeworkers, with 912,000 regularly working from home in 2015 compared with 609,000 women. However, the biggest growth in regular home working was among female employees, with 35% (157,000) more working from home in 2015 than in 2005.

Despite the potential issues highlighted by MetLife’s survey, TUC general secretary Frances O’Grady said more employers should consider offering home working.

“Modern home working is good for the economy as it helps businesses hold on to talented staff and boosts productivity,” she explained. “And it allows those with caring responsibilities or a disability greater access to the jobs market.

“While home working may not work in all professions I would urge employers to look at the value it can bring to their business and their workforce.”

No help for employees caring for cancer patients

Half of managers say their company has no formal policy for employees caring for someone with cancer

Nearly a third (32%) of employees with a family member diagnosed with cancer did not feel supported by their employer when the diagnosis was made, according to a whitepaper from AXA PPP healthcare.

Love for the loved ones: how to support employees when cancer affects their family, found that half (49%) of managers said their company does not have a formal policy for employees with a family member diagnosed with cancer.

However, a quarter (28%) said they exercise their discretion and offer flexible working to employees with a close family member or dependent suffering from cancer.

Chris Horlick, distribution director at AXA PPP healthcare, said that when a cancer diagnosis is received it is not just the person with the illness who is affected.

“When someone is diagnosed with cancer focus rightly turns to that person’s health and wellbeing,” he said. “But it’s also important to remember the impact the diagnosis can have on the sufferer’s family. In addition to the emotional impact family members may find themselves facing a host of pressures and responsibilities. Improvement in treatment is enabling many people affected by cancer to live longer with the disease held in check or even cured. While this is welcome, it means that the impact of having cancer in the family will continue to be felt for months and even years to come.

“There’s much that employers can do to support employees who find themselves in this situation. And, by doing this well, they’ll not only help employees through a difficult time, they’ll also help to maintain morale and productivity and retain valued employees,” he added.

The white paper recommends employers should:

  • Review and revise company policies and procedures to include carers.
  • Build awareness of cancer, the impact of living with the disease and caring for those who have it.
  • Consider introducing flexible working arrangements for carers.
  • Clearly communicate available workplace support- for example, confidential counselling, cancer nurse helplines and private healthcare cover.
  • Ensure that workloads are fairly managed across affected teams.

The gender pay gap: Firms are looking in the wrong place

The gender pay gap is down largely to women making up a very small percentage of executive positions

Companies are looking for a solution to the gender pay gap in the wrong place, according to research by Korn Ferry Hay Group.

When comparing pay between genders overall the study found that men are paid vastly more (17.6%) than women, which is in line with other research on the subject. However, when comparing jobs at the same level the gap shrank to 6.6%, and within the same company it fell to 2.2% (both favouring men).

The overall gender pay gap is down largely to the fact that women make up a very small percentage of CEO and executive positions, the research confirmed. For example, women only occupy 4% of CEO positions and 25% of executive/senior-level and manager positions at S&P 500 companies, while they account for 45% of the lower-paid labour force at these organisations.

Seniority was not the only contributing factor found. Another was the small number of women in the highest-paying industries (for example oil and gas, technology and life sciences). Even in lower-paying sectors where women dominate, such as hospitality and tourism, men still held the vast majority of management and executive roles – the highest paid jobs within any industry.

Ben Frost, a global reward expert at Hay Group, suggested that firms should approach the pay gap differently. “The biggest driver of the pay gap is a lack of women in high-paying industries, senior functions and in leadership positions,” he said. “If we want to close the pay gap and make a difference it is the road to the top jobs that needs to be the focus.”

Peggy Hazard, managing principal at Korn Ferry Hay Group and co-author of the study, said that employers should take action on potential bias in their business.

“Organisations need to scrutinise the unconscious male bias in the ways they hire, develop, promote and reward employees, and define successful career paths to ensure they optimise female talent,” she said. “Only when we have more women in higher paying jobs will we see the gender pay gap begin to close – not only by further equaling pay at similar job levels, but ensuring females reach the most senior roles at the top of global organisations.”

Serious misconduct which could be linked to disability

Risby v London Borough of Waltham Forest [2015]

In this case, the Employment Appeals Tribunal (EAT) has held that there only needs to be a loose causal link between an employee’s conduct and their disability for a “discrimination arising from disability” claim to be made.

The employee was dismissed for misconduct after he lost his temper when he learned his employer had decided to move a course to a venue inaccessible to him as a wheelchair user.

The employee’s tendency to be short-tempered was unrelated to his disability of paraplegia. However, the EAT reasoned that the situation only arose because the employee was disabled and it was therefore incorrect for the tribunal to find that the misconduct was unrelated to the employee’s disability.

In this case Mr Risby was employed by London Borough of Waltham Forest (LBWF) for 23 years until he was dismissed for gross misconduct.

In 2013 LBWF organised workshops for their managers, this was originally due to take place at an offsite private venue. This venue had wheelchair access and so was accessible to Mr Risby. In June 2013 LBWF cancelled the private venue for cost-saving reasons and the venue for the workshop was changed to the basement of one of LBWF’s buildings.

Mr Risby was upset and angry with this decision as the basement had no wheelchair access. He shouted at a junior colleague, brought her to tears and used offensive language towards her.

Mr Risby was summarily dismissed following a disciplinary hearing as LBWF considered that he had used offensive and racist language twice and had behaved unreasonably towards his colleagues.

Mr Risby brought a claim for unfair dismissal and discrimination arising from disability. The tribunal found that his short temper was not related to disability and they dismissed his claim.

Mr Risby appealed, the EAT allowed the appeal and they noted that Mr Risby’s conduct arose in consequence of his disability.

The EAT reasoned that if Mr Risby had not been disabled by paraplegia he would not have been angered by LBWF’s decision to change the venue to one he could not access. The fact that Mr Risby’s personality trait of shortness of temper, which did not arise from his disability, was also a cause of his conduct, did not mean that the other cause, which was related to his disability, should be disregarded.

Comment

» This case has loosened the causal link between the disability and the ‘something arising in consequence of the disability’.

» Employers should be mindful of this situation when involved in a disciplinary with a disabled employee. In this case it was the employer’s failure to accommodate the employee’s needs as a disabled person, which would not have arisen if he were not disabled, that caused him to lose his temper.

» This decision should not be taken as a suggestion that it is incorrect to sanction an employee in Mr Risby’s situation but instead to consider all sanctions available.

This article was written by Ward Hadaway on behalf of ESP HR, the provider of HR Legal Service.

The content of this article does not constitute legal advice and it should not be relied upon. Specific legal advice may be required to address your specific circumstance.

Workers unlikely to see a pay rise for a decade

Many workers are unlikely to see a significant rise in the real value of their pay until the end of this decade

The latest quarterly CIPD Labour Market Outlook survey of more than 1,000 employers found that those expecting to make a pay award between March 2016 and March 2017 plan to award a median pay increase of 1.7%. This is the second quarter in a row when the CIPD’s survey has anticipated a figure below the government’s official inflation target of 2%.

Expectations are higher among SMEs (2%) than larger organisations (1%), which the CIPD suggests could be the result of large employers feeling the effects of additional labour costs more strongly than smaller firms.

Mark Beatson, CIPD chief economist, said that the findings show employers remain confident about short-term job prospects. “For now there’s no sign of the economy running out of jobs, or out of people to fill those jobs,” he said. “However, the UK is now in its eighth year of productivity ‘go-slow’, which continues to limit the scope for employers to pay more. Recruitment and retention problems have so far proved manageable without across-the-board pay rises. This survey provides no indication of that situation changing any time soon.”

He warned that on top of this employers have to manage the consequences of government-imposed increases to the cost of employing people. “The National Living Wage and roll-out of pension auto-enrolment were introduced to improve the living standards of low-paid employees, but this can only happen without significant job losses if the productivity of low-paid employees also increases,” he said. “Simply making low-paid labour more expensive is not the answer and the government shouldn’t be surprised if some employers choose easier options, such as reducing hours, chipping away at other benefits or making a less generous pay award the next time pay is reviewed.”

As such, Beatson predicts that inflation-busting rises will continue for the foreseeable future. “Without productivity improvements organisations will be forced to keep pay budgets under ever tighter control, which is why we believe the current jobs-rich, pay-poor environment is likely to continue as these increased costs to business take effect,” he explained.

Don’t send your talent back to idiots

Make sure everything you put into your talent is enhanced by line managers, not destroyed

There are some organisations that very effectively identify talent. They take their high potentials through excellent development activities, and then return them to line managers to build on the investment. But even these best-in-class talent management programmes could have a fatal flaw. That flaw is the forgotten elephant in the room.

That elephant appeared to me in Zurich in 2005 when I was global head of talent and leadership at UBS. In November 2004 we ran the first ever group-wide talent programme for an elite audience: the top 10% of the top 10%, the true stars. No expense was spared, and it lacked no senior leader presence to inspire this critical group and align them to the new entrepreneurial strategy of the bank. They were to be champions of the new world. It won awards and was part of a Harvard case study. But three months later three of our ‘uber high potentials’ told us they were thinking of leaving.

Why? We had inspired them, aligned them to the new strategy, shown them how valued they were, and the massive potential they had to succeed! Then the elephant became visible. We had, after all that effort and cost, sent them back to ‘idiots’. We had sent them back to line managers with neither the skills nor desire to use their potential either for the good of the team or the organisation. Some even treated them as a threat. The old world had collided with the new.

The problem was not the fault of the line managers. They were only ‘idiots’ because we had not developed them to be able to develop talent effectively. We had assumed they were up to the job, but many weren’t.

Immediately a line manager engagement strategy was designed and rolled out, with the objective of ensuring every high potential had a line manger who could develop them effectively.

It clearly set out what line managers were expected to do to develop their high potential team members and how to do it quickly and simply given the other work they had. It showed them what the organisation could do to help them and what excellent development looks like.

Their HR business partner was given the same information using the same structure but with more detail. The HR business partners were developed to support their line managers in lunch and learn sessions and made aware of development resources and opportunities – not just in their own business area but across the whole organisation – from job shadowing in another division to mentoring.

In a further step to ensure success the delivery of the talent development objectives became part of the line managers’ own objectives (on which part of their bonus was reliant).

Line managers also had the opportunity to attend workshops to develop their coaching, general management skills, and understanding of the organisation’s big picture. This was all planned and initiated within eight weeks of that fateful morning when the elephant became visible.

This strategy’s effects were dramatic; the most powerful being that not only did it enhance the development of high potentials but also line managers. We were also able to ‘flip the switch’ so that their new development capability could be used on their whole team, not just high potentials. In the longer term this in itself created even more high potentials – we had unwittingly instigated a virtuous circle of development that was more powerful than we could have imagined.

The moral of the story is: make sure all the time, effort and resources you put into your talent is enhanced by their line managers, not destroyed. People join organisations and leave bosses, so don’t send your high potentials – or indeed anyone – back to ‘idiots’. Make sure every line manager has the motivation, skills, and holistic perspective to inspire and enable everyone to reach their full potential.

This article is published courtesy of HR magazine and was written by Chris Roebuck (pictured), visiting professor of transformational leadership at Cass Business School

Businesses neglect cyber security

Just three in 10 (29%) firms have written cyber security policies

Only 17% of UK firms have trained staff in cyber security over the past year, according to a report released by the government.

The Cyber Security Breaches Survey 2016 found that while it is common for businesses to regularly update software (88%) and malware protections (83%), and to have configured firewalls (85%), it is less common for them to restrict IT access to specific users (77%) or place security controls on company-owned devices (62%).

Just three in 10 (29%) have written cyber security policies, and just one in 10 (10%) have formal incident management processes. Relatively few companies (34%) have rules specifically around personal data encryption.

Breaches of cyber security systems were found to be prevalent, with a quarter (24%) of all businesses having detected one or more breaches in the last 12 months. This was substantially higher among medium firms (51%) and large firms (65%). Large firms were also more frequently targeted, with 25% of those that experienced breaches having suffered this at least once a month.

Steve Hill, director of external engagement at The Open University, said businesses need to recognise that investing in IT infrastructure and retraining staff must go hand in hand. “As the techniques used by hackers to breach networks and servers become more sophisticated companies need to do more than simply update their IT systems,” he said. “Instead they must ensure their employees have the knowledge and skills to maintain best practice and futureproof the company’s defences.”

A separate government report, the 2015/16 Cyber Governance Health Check, has revealed that 54% of board members only hear about cyber security twice a year or when there is a security incident.

Farida Gibbs, CEO and founder of IT recruitment firm Gibbs S3, said the research demonstrates that many decision makers within business are not recognising the serious nature of cyber security threats. “It needs to be discussed on a more regular basis; waiting until the damage has been done is an incredibly risky strategy,” she said. “Cyber security is often perceived as being less business-critical than implementing the latest digital innovations, but as seen by TalkTalk and Ashley Maddison, one severe breach can do incredible damage to a company’s reputation.”

In HR magazine’s recent research with DAC Beachcroft on the future of the function, cyber crime was ranked highly as a potential future challenge by HR directors; 30% of those surveyed said disrupted internet developments due to cyber crime could have a significant impact on their business.

Pensions whistleblowing reports up by 29%

Data from the Pensions Regulator shows there were 2,545 whistleblowing reports in 2015/16

The number of whistleblowing reports made to the Pensions Regulator has risen by almost a third (29%) in the past year, according to law firm Clyde & Co.

Data from the Pensions Regulator shows there were 1,968 whistleblowing reports made in 2014/15 compared with 2,545 in 2015/16. The number of reports in 2013/14 stood at 1,486.

Clyde & Co suggested that the increase could be a result of firms struggling with auto-enrolment, which even larger organisations have found complicated. Mark Howard, head of pensions at Clyde & Co, warned that the final stages of the auto-enrolment process are likely to be the most challenging.

“On top of this, the SMEs yet to face their enrolment deadlines are not going to have the support of HR departments to help them deal with the administrative headache of enrolling employees into a pension scheme,” he said.

“The regulator has put out a lot of guidance aimed at SMEs, but even so it is not surprising that we are seeing the number of whistleblowing and enforcement actions increase as the number of employers subject to auto-enrolment grows substantially,” he added.

Last month Swindon Town FC was fined more than £20,000 after it failed to comply with auto-enrolment regulations.

The football club was given an initial fixed penalty notice of £400. After failing to pay and then ignoring several warning notices it eventually reached a settlement to pay backdated pensions contributions. However, after the deal the club was late to pay what it owed, leading the fine to escalate to a total of more than £20,000.

Howard said this shows that the regulator has teeth. “Businesses cannot afford to take their eye off the ball or they could get hit with a fairly hefty escalating fine,” he warned.

We need nuanced solutions to business’ gender challenge

Solutions to gender inequality in business are simple in concept but tricky in implementation

I recently asked my four-year-old son what he wants to be when he grows up. His reply surprised me: ‘A daddy’. ‘And what job would you like to do?’ I enquired. ‘I could work half the week,’ he said, ‘and then look after my child the other half.’

Although he was holding a mirror to the life of his own parents I was terribly proud of my modern young man. We are seeing a shift in society where the desire for flexible working, time with family, and the other joys of life are no longer simply the preserves of women. However, it will take a drive from men who want to work more flexibly to change the way we as a society currently view part-time working: as low status, low paid and career-limiting.

HR magazine’s recent online article ‘Women “hugely outnumbered” on boards’ reflects the fact that we still have a long way to go, with fewer than half of companies having increased their female representation over the last few years. Despite the achievements that followed the Davies review, female representation remains stubbornly low, particularly in executive director roles. It was heartening to see the NHS announce that it will be striving for half of board directors to be women – however, one wonders if that is ambitious enough in a sector that employs more than 75% women.

I think some of the solutions are simple in concept, if tricky in implementation. And they need to be nuanced to address the executive gender challenge, which is very different to the non-executive director challenge.

The latter seems to be about the requirements boards set for non-executive roles and how they go about recruiting for them. A third of companies still report heavy reliance on the personal networks of current board members to source new ones, with only 2% openly advertising. Therefore we should not be surprised that this delivers more of the same. I have worked with organisations that have been more open-minded on the requirements of candidates and have taken an open approach to sourcing them – with very clear and definite results, both in diversity and improved governance.

The executive gender challenge needs a different solution. It remains the case that long hours and personal sacrifice are requirements at executive level whatever the sector. And that just doesn’t fit with having children, no matter how you try and square it. We need a concerted effort to value the impact senior leaders achieve as opposed to the hours they work, and to make it ok for both men and women at any level to work flexibly, without detriment. This makes business sense.

Talented people also have families and lives and are better at work for it. I am fortunate enough to work for an organisation that recognises this and both business and individual benefit as a result. Companies need to grasp this as a business issue. After all, McKinsey’s research demonstrates very clearly that diverse boards deliver better business outcomes; with gender diverse boards outperforming others by 15% and ethnically diverse boards outperforming by 35%. And the research found that in the UK gender diversity on the senior executive team corresponded to the highest performance uplift in the data set. Yet McKinsey also found women account for only 12% of executive team members in the UK. So what are we waiting for?

Business needs to seize the day and make the gender equality debate a thing of the past. As HR professionals we have a very significant role to play in making this happen. I look forward to the day my son fulfils his ambition to be a daddy, and I sincerely hope he has a fulfilling and rewarding career as well.

This article was published courtesy of HR magazine and was written by Mandy Coalter (pictured), director of people at United Learning