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Looking Forward.. Belinda Johnson – Worklab Ltd September 2014.

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Presentation on theme: "Looking Forward.. Belinda Johnson – Worklab Ltd September 2014."— Presentation transcript:

1 Looking Forward.. Belinda Johnson – Worklab Ltd September 2014

2 Looking forward towards… 2..the potential impact of the UK’s (World’s) productivity issue

3 The UK’s productivity issue… 3 Shortfall in UK’s productivity compared to other G7 countries Source: ONS

4 The UK’s productivity issue… 4 To what extent is worker sentiment a major contributor to this productivity shortfall?

5 The UK’s productivity issue… 5  One in five employees (21%) in the UK earn below £7.50 an hour – two thirds of the UK median wage – putting them under the official OECD definition of low pay. SectorProportion of sector workforce on low pay Number Hotels & restaurants68%830,000 Retail & Wholesale41%1,501,000 Admin & support services36%523,000 Health & Social Work17%569,000 Education14%530,000 Manufacturing14%318,000 Source: Resolution Foundation

6 The UK’s productivity issue… 6 The minimum wage “was put in place as a safety net” but, in many instances, it has now become a standard… “Too many employers are seeing that as the level, in fact it's the national wage, not the national minimum wage.” Norman Pickavance, NED - HMRC and SFO & former HRD Morrisons According to the ONS, 3.1m people want or need to work more hours/earn more money

7 The UK’s productivity issue… 7 Source: Kelly Global Workforce Index: Career Development August 2014

8 The UK’s productivity issue… 8 Source: Kelly Global Workforce Index: Career Development August 2014

9 The UK’s productivity issue… 9 Level of engagementPercentage of UK workforce Engaged16% Disengaged60% Actively disengaged24% Source: Gallup

10 The UK’s productivity issue.. 10 Source: Kelly Global Workforce Index: Career Development August 2014

11 The UK’s productivity issue… 11  Workers:  Continually concerned about earnings/outgoings…  Disengaged and unhappy…  Continually looking for new opportunities…including new ways of working…  Many are working, but not serving.

12 Additional challenges.. 12  Less money available to fund public services  Harder for legacy commercial enterprises to make same levels of profits  New technologies enabling unprecedented levels of innovation – and competition.

13 The productivity crisis will bring ‘total resource’ into view 13

14 Of note amongst ‘total resource’.. 14 Source: ONS Labour Market Statistics series Officially, c. 42% of the UK workforce works outside the legacy concept of fixed, full-time employment…

15 The productivity crisis will drive outcomes-based working 15

16 …the shift to outcomes based working 16  Employers:  Challenged with sourcing (and being responsible for growing) newly emerging skills..  Looking for a return on their investment in people.  Will increasingly consider AI and automation alternatives.  Being impacted with significant costs associated with rising churn..

17 …the shift to outcomes-based working 17  Time taken for new/replacement workers to reach optimum productivity:  Time taken to reach optimum productivity, based on source: Size of organisationAverage time taken to reach optimum productivity Micro-organisations12 weeks SMEs24 weeks Large organisations28 weeks SourceAverage time taken to reach optimum productivity Same sector15 weeks Another sector32 weeks New graduates40 weeks Unemployed / Inactive52 weeks Source: Oxford Economics/Unum

18 …the shift to outcomes based working 18  Cost of replacement / new worker (£25k+ salary) in large organisation = >£30,000 Cost elementCost Lost wages whilst not running at full efficiency £13,128 ‘Lost capital income’ – output that would have been achieved if working at full efficiency £12,043 Logistical fees (incl. advertising, recruitment fees, etc.) £5,433 Source: Oxford Economics / Unum

19 …the shift to outcomes based working 19  When starting to evaluate ‘total resource’, hirers will realise that there are an increasing array of new sources of talent/resource available and new ways of ‘work’ being delivered….  Statement of Work assignments  On-line working / on-line services  The fragmented, networked enterprise  AI / Robotics…  …all work on the principle of guaranteed/known outcomes.

20 …the shift to outcomes-based working 20 Source: SIA European Contingent Buyer Survey 2013

21 …the shift to outcomes-based working 21 Matt Cooper, oDesk REC: The Client Paradox “Those who are successful are those who view it akin to starting their own business, where the necessity is to sell yourself, market yourself to prospects, manage your work efficiently and do what you say when you say you are going to do it.” “This is a new type of professional, a new workforce, to whom it is totally acceptable to work to outcomes and to be hired – or not – based on their reputation for delivery.”

22 …the shift to outcomes-based working 22 % workers interested in on-line working % workers with experience of on-line working Kelly Global Workforce Index 2013 “The shift reflects a change in mind set as much as in work practices….employees (are) more ready to accept an element of risk in their pay in return for improved output.” 41% of large buyers in 2013 said they were aware of on- line staffing, up from 32% in 2012 Source: SIA Contingent Buyer Survey 2013

23 The impact of outcomes based working.. 23 Why, if workers are increasingly going to be rewarded on outcome, should the recruitment industry continue to warrant the same reward for their simply turning up for work? Task-orientated working, outside sensitive areas, has eradicated the need for traditional forms of vetting/checking/worker validation. A broader shift to outcome-based working will bring with it a reform in what we check for…and what the industry can subsequently charge for.

24 Contacts 24 Belinda Johnson owner - worklab e: T: @worklabinsights m: 07771 534365

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