An era of change for HR professionals

Aine Connellan our consultant managing the role
What is happening in the UK’s HR market? The HR industry has undergone significant change in recent years, moving away from its previous image of being an administrative role to its current reputation as a key function in any high-performing organisation. With alternative workforces, disruptive digital business models and a focus on more meaningful work all taking hold, the HR profession is responding in turn, creating new opportunities for professionals across the UK. Here’s where the market is at currently: 

Brexit creates ongoing uncertainty In addition to the usual seasonal trends we see within HR – such as a downturn in the market during holiday periods – Brexit is creating significant amounts of uncertainty. 

Clients and candidates alike in the human resource development space are telling us that Brexit is contributing to changes in activity, particularly within manufacturing and other industries that operate on a large scale. These companies are on limited production and many are stocking up on materials to bulk-store in warehouses ahead of any Brexit decision. This caution and preparation is being felt throughout the country, with UK factory output accelerating in September as firms rushed to buy goods and materials to avoid border delays. SMEs and large organisations are holding their supplies in warehouses, with some – such as

Jaguar Land Rover – building brand new distribution centres in a bid to counteract Brexit pressures.

In addition, the permanent side of the HR market is being increasingly reserved as the Brexit outcome remains unclear. There is little movement from either candidates or clients, with caution encouraging workers to stay put in their jobs and employers to avoid adding too many new permanent roles. However, we expect that as soon as there is a clear outcome, activity will return to pre-Brexit levels and it will be full steam ahead in the fixed-term contract and permanent HR space. 

Companies are focusing on reward
Clients are no longer looking just at salaries, with their focus shifting towards bonuses, benefits, pensions and flexibility. While our 2019 Market Insight report shows that 72% of respondents received a pay increase at their most recent pay review, we know that pay rises have slowed across the board. Because of this – and indeed in a bid to not just attract top talent, but retain them - employers are being creative with benefits. Our respondents rate holiday leave, pension and bonus schemes and flexible working as among the most important benefits, and this is certainly being reflected by our clients. 

Salaries have stabilised this year, rebounding after a period of low rates. In order to make these packages more appealing to both existing employees and new candidates, organisations are investing much more into pension packages, annual leave and provisions around home working. Competition for top talent is fierce, and with candidates reluctant to move on from roles until a Brexit outcome is determined, HR professionals are finding it harder than ever to lure people away from their current jobs and into their business. Because of this, we’re seeing huge demand for reward professionals within HR.

We’re moving from Human Resource Managers to Human Resource Business Partners
Outside of small SME clients, we’re seeing a decline in demand for human resource management (HRM) professionals. Medium and large organisations are increasingly looking to recruit human resource business partners who can provide significant strategic and operational benefits to organisations. While HRMs and HRBPs perform similar roles of connecting the HR department to management, HRBPs are more commercially aware and tend to work more closely with organisational leaders to develop and direct HR agendas. Organisations want business partners who can contribute to strategic meetings, are commercially savvy and understand how HR activity can impact and contribute to the bottom line. This doesn’t mean traditional HRMs are out of work, however – instead, they’re staying put in their existing roles while HRBPs are moving into new roles.

Salaries remain high in LondonSenior HR posts continue to generate higher salaries in London compared to the rest of the country, but many HR shared services are moving to more regional locations. For example, HSBC has transitioned from its Canary Wharf base to Birmingham. This move from London to the regions is reflected in the wider UK business market as real estate costs in London have soared.

Across the board, salaries have remained stable in 2019 as the bigger focus has been on the reward and benefits package companies can offer. Company and personal performance bonuses, however, have been much more competitive.

Fixed term contracts and permanent roles will gain steam in the new yearWhere IR35 is applicable we will likely see an increase in fixed term contracts and permanent roles in the new year, and we can expect to see Brexit playing a part in how this pans out. Larger complex organisations such as financial services and utilities firms still have contractors in place, but conversations with Heads of Resourcing suggest they will move towards more permanent roles and fixed term contracts rather than extending day rates as IR35 takes hold. 

Interested in your next HR role? We can help
At Marks Sattin, we have a deep knowledge of the senior HR market and work with high calibre organisations and professionals across the UK. Take a look at our current HR jobs here or get in touch to see how we can help you. 

02/12/19
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Industry

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