Megatrends: and how to manage them?

At the end of 2014, the CIPD published the final report in its six-study Megatrends research series. The programme offers unique insights for HR and organisations looking to adapt and perform in the 21st-century globalised economy.

Team of happy office workers
HR has a crucial role in equipping organisations for the future. The CIPD’s Megatrends series therefore set out to explore and set the scene for dialogue, debate and action, considering the issues which business leaders are likely to need to address.Here we present an overview of each study, drawing out just some of the strands for the global context and mobility, opening discussion and debate around the questions that Mark Beatson, CIPD chief economist, set out at the first Megatrends study launch. They include:
  • How do we manage in a world where real-terms pay rises just don’t happen any more?
  • How do we create agile and adaptable organisations when people are staying in their jobs for longer?
  • How do we maintain the engagement and effort of a workforce that feels it is working harder, and more intensely, than ever?
  • How do we rebuild the trust of workers in business and public-sector organisations that has been so rocked by a seemingly unending series of scandals?
All crucial questions for a critical time.

Paper 1: Megatrends – the trends shaping life and work

Deindustrialisation, the changing face of the workforce and demographic change, our relationships with national structures and institutions, levels of academic attainment, and technology are all challenging established orders, with working across boundaries – geographical or organisational – now an established long-term trend.These megatrends are at work now, and they provide the starting point for the professional body for HR and people development’s ambitious research project as it seeks to meet what the CIPD describes as the “urgent and critical need” of supporting businesses to deliver the organisational agility needed to respond to these changes through discussion and debate.

Paper 2: Has job turnover slowed down?

Taking the ‘bread-and-butter’ metric of staff turnover as a way into the wider issues, the CIPD sought to test the assumption that rapid technological change, more diverse working patterns, and less union involvement have meant that employee attrition rates have increased in response to wider social changes.“Working lives have been expected to involve more frequent changes of employer, industry, occupation, possibly even employment status (with changes between working as an employee and as a freelance or contractor, for example),” explained CIPD chief executive Peter Cheese in the study’s foreword.However, the evidence actually suggests a degree of stability in the UK jobs market. While self-employment has increased in the last 30 years, four-fifths of UK workers remain permanent employees. The average time people spend with an employer also remained relatively stable between the mid-1970s and the mid-2000s, with evidence suggesting that UK job turnover has actually been falling over the past decade.One theme within this, therefore, is how employers are adapting in the context of a five-generation, more-diverse workforce, and the movement of talent and the talent pipeline.

Paper 3: Are organisations losing the trust of their employees?

A better-educated society with access to wider information sources trusts business leaders, public bodies and elected officials less after a slew of high-profile management, government and leadership scandals. Yet a lack of trust in management is potentially damaging economic performance, concluded this third study.Although trust among the UK workforce recovered slightly in 2011/12 from the CIPD’s mid-financial-crisis 2009 benchmark, the CIPD’s most recent data showed that just 37 per cent of employees trust their organisation's senior leadership.Mark Beatson commented, "Trust is an economic issue. If employees do not trust their leaders, this damages business performance. They are much less likely to be engaged in their work; indeed, they are more likely to be looking for another job and are unlikely to recommend their employer to anyone else.“The public are interested in how companies treat their employees. So, if a company loses the trust of its workforce, it can lose its public reputation.“Sustainable economic recovery will only be possible if employers can improve the productivity of the workforce, equipping them with the right skills and bringing out the best in them. Employers can't afford a lack of trust to hold them back."From a global mobility perspective, gaining and retaining trust is a fundamental issue for engagement and business success, given its inherent risks to business performance, reputation and employee relations. How are culture, practices, pay and rewards responding in this context?

Paper 4: Have we seen the end of the pay rise?

Opening with the fact that UK workers have just endured the most sustained and severe decline in wages since 1945, this study advocated more effective management communication to manage employee expectations and discussions of the benefits of a wider reward package, such as pensions or investment in learning and development.It also suggested that pay alone is not the answer to employee satisfaction: investment in learning and development could see a better return on investment on productivity than pay alone.“Even when an organisation has gone to all the cost and bother of increasing salaries, this is not reflected in a positive net satisfaction score among those who have enjoyed a pay rise,” notes CIPD performance and reward adviser Charles Cotton in the study.

Paper 5: Are we working harder than ever?

This study analysed the perceptions and realities of working life today. Even though the proportion of UK workers who say their job requires them to work very hard is second only to that of Ukraine among European countries, there is little evidence to suggest that this is the case in reality when measured by deadline and workload pressure.However, the study goes on to describe the factors that are, perhaps, making work feel harder and more intensive. Greater customer demands, coupled with organisational change, higher workloads and cost focus, plus enhanced technology, are combining to make work a more pressured and intense experience, even though what constitutes ‘hard work’ is difficult to quantify.In this context, how people are managed is critical in ensuring employee wellbeing and business performance, as are workplace cultures and styles. While the study says that it is difficult to envisage these pressures lessening in the coming years, the trick to managing them well is to do so in a way that optimises their benefits, such as through a focus on the holistic aspects of job design and work organisation and employee involvement.

Paper 6: Are UK organisations getting better at managing their people?

Following on from the previous paper’s insight into holistic management approaches, the CIPD’s extensive literature review and its own research found little evidence of better management practices since the benchmark set in Michael Porter and Christian Ketels’ 2003 report for the government into competitiveness and the role of management.Picking up further on the themes identified in previous Megatrends reports, the study highlights the turnkey role of managers. It suggests that productivity levels could improve if managers spent more time with their direct reports, increasing the quality of coaching and career development advice they provide.One in five employees said they have never had a formal meeting with their manager. The study also found that management processes are not always applied consistently or fairly, suggesting that this is one reason why there is a lack of trust in senior leadership.

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