Human Resources. Labour Market Report

Human Resources Labour Market Report 2012 Anthea Hollist Research and Projects Officer CfA business skills @ work 6 Graphite Square Vauxhall Walk London SE11 5EE Info@cfa.uk.com T: 0207 0919620 F: 0207 0917340 www.cfa.uk.com

Contents Page No. Foreword 2 Executive summary 3 1. Introduction 8 1.1 Scope of research 8 1.2 Standard Occupational Classification (SOC) Codes 8 1.3 Defining Human Resources 9 1.4 The importance of Human Resources 10 2. Profile of HR Practitioners 11 2.1 Size of the workforce 11 2.2 Status of the workforce 11 2.3 Gender of the workforce 12 2.4 Salary of the workforce 12 2.5 Qualification levels of the workforce 13 3. HR Trends and Drivers 14 3.1 Going strategic 14 3.2 The search for talent 14 3.3 Technology and social media 15 3.4 Diversity in the workforce 15 3.5 Budget constraints 15 3.6 Outsourcing 16 4. Market Supply 17 4.1 Human Resources qualifications 17 4.2 Human Resources national occupational standards 19 4.3 Human Resources apprenticeships 20 4.4 Training for Human Resources practitioners 21 5. Skill Needs 23 5.1 Recruiting Human Resources Practitioners 23 5.2 Gaps in the Human Resources function 25 6. Future Needs 29 6.1 Recruiting in the future 29 6.2 Future skill needs for HR professionals 29 6.3 Future behaviours in the HR function 30 7. The way forward 31 8. Bibliography 32 Page 1 of 32

Foreword This report examines labour market information (LMI) relating to Human Resources (HR) employment and the demand from employers for relevant skilled staff. This report presents a picture of HR across the UK. It looks at: the current picture of the HR workforce across the UK, including workforce characteristics, training and qualification levels the skills challenges and skills related issues facing employers the types of skill shortages and gaps which HR professionals face what lies ahead. The principle purpose of this report is to provide a robust analysis of what HR looks like across the UK. Page 2 of 32

Executive summary Good Human Resource Management is pivotal for increased productivity, innovation and performance across all sectors of the economy. Increasingly, the function of HR is moving away from transactional activities to more strategic ones. HR professionals are taking on the role of consultants and advisors, adding value to the business by offering insight to leaders. As business leaders place talent at the heart of their strategic agenda, the spotlight is falling on key HR related strategic issues such as demographic change, global workforce planning, corporate social responsibility, organisational transformation, change management, as well as many other HR related areas. The workforce The HR workforce makes up less than 1 per cent of total employment in the UK. Approximately 29,069 people working in human resources in the UK. This includes HR managers and directors, HR administrative occupations and HR and industrial relations officers. The majority of HR professionals are female and work full time. Where HR professionals work part time, they are more likely to be female than male. Despite the recession and spending cuts, the majority of HR professionals have had a pay rise in the last 12 months. The average pay for HR professionals is 44,033, although those working in the manufacturing and production are more likely to earn more than average, while those working in the third sector are more likely to earn les than average. HR professionals who hold CIPD membership are also more likely than CIPD non-member to earn more than average. There is no license to practice in HR. People can generally obtain access to the profession without any qualifications, although obtaining a CIPD qualification is generally seen as a route to the profession. Those who normally work at the support level in HR are usually qualified at certificate level of NVQ level 3 equivalent. At the professional level the qualification is set at post graduate (level 7). Skill Drivers The key trends and drivers of HR include: Going Strategic The shift to strategic HR is expected to increase the demands placed on HR professionals. As a result, the levels and qualifications held by HR professionals is expected to rise as they become more strategically focused. The search for talent As talent becomes embedded into the heart of organisations strategic plans, HR professionals have to spend a large amount of their time on talent management. As the search for talent becomes global, HR professionals have to develop workable global sourcing strategies. Technology and social media Changes in technology are expected to have a significant influence on the HR function. HR professionals are having to become more technologically savvy, as aspects of their Page 3 of 32

Executive summary job goes online. They will also need to seize the opportunities offered by social media to ensure that they are maximising their opportunities in the search for talent. Diversity in the workforce The workforce is becoming more diverse, both in terms of cultural mix and type of contracts people hold. This will place scrutiny on the quality and effectiveness of an organisations diversity and inclusion polices, and will require more specialised interactions with employees. Budgets As with most professions, the recession has led to reduced budgets and spending cuts. For HR this has meant a reduction in recruitment costs and a renewed focus on in house training and development. Outsourcing Many HR processes are being outsourced due to a lack of capabilities in the HR function, in terms of quantity of workers and talent within the organisation. As more of HR becomes outsourced there will be a great need for the HR function to develop the skills and processes needed to manage multiple outsourced providers at both the strategic governance and operational level. Market Supply While HR professionals do not have a large supply of qualifications to choose from, what is on offer seems to be sufficient to cater for those entering the field of HR, and those seeking continuing professional development. The supply of training for HR professionals is vast, with a large number of training courses for HR professionals on the web. The quality of training offered via the web will be mixed, and will range from large suppliers who cover a vast array of topics to smaller specialised suppliers. The development of two HR apprenticeships will help raise the quality of training offered to HR professionals. Current and Future needs The HR function faces a number of challenges in recruiting. These challenges mainly relate to a lack of skill, experience and/or qualifications held by applicants, as well as issues to do with salary. Where skills gaps appear in the HR function this is to do with, organisation development, resourcing and talent development as well as employee engagement. The HR function also lacks proficiency with the following behaviours - curious, skilled influence and courage to challenge. In the future the HR function will need to be curious, have courage to challenge and be driven to deliver. HR professionals will need to develop business, leadership, consulting and technology skills, as well as a global mindset. Page 4 of 32

Executive summary The future of HR In the future HR professionals will need to be trained to think more strategically which will require them to develop a new mindset. However in order for HR professionals to become more strategic this will require them to be freed from the more administrative aspects of their job and undertake more strategic ones. Page 5 of 32

List of Tables Table 1: HR in the SOC2010...9 Table 2: Size of the workforce (Apr June 2011)... 11 Table 3: Status of the workforce (Apr June 2011)... 11 Table 4: Status of the workforce (Apr June 2011)... 12 Table 5: Annual salary and pay changes... 12 Table 6: HR Management Qualifications in England, Northern Ireland and Wales... 17 Table 7: HRs National Occupational Standards (2011)... 19 Table 8: Job centre plus vacancies January 2012 by SOC2000... 23 Table 9: Ease/difficulty of recruiting for different HR roles (%)... 24 Table 10: CIPD HR profession map - behaviors... 26 Page 6 of 32

List of Figures Figure 1: Recruited roles... 23 Figure 2: Channels of HR recruitment... 24 Figure 3: Skills and capability gaps in achieving HR agenda... 26 Figure 4: HR function behaviors (%)... 27 Figure 5: Addressing skills gaps within the HR function... 28 Figure 6: Recruitment in HR in the future... 29 Figure 7: Future behaviors... 30 Page 7 of 32

1. Introduction 1.1 Scope of research The aim of this report is to provide an up-to-date analysis of the Human Resources (HR) workforce in the UK. It draws on national secondary data sources to ensure that an accurate picture of the workforce is reported on. The key sources used in this report include (but are not limited to): HR Outlook reports published by the Chartered Institute of Personnel and Development (Spring 2011 and Autumn 2010) The Office of National Statistics (ONS) datasets Government reports In addition to these key sources, more specific data was used. Sources, including website references, are given in footnotes and the bibliography provides a full list (with the exception of websites). 1.2 Standard Occupational Classification (SOC) Codes As of 2010 The Office for National Statistics (ONS) revised and updated the Standard Occupational Classification 2000 (SOC200) codes, with the Standard Occupational Classification 2010 (SOC2010) codes. The revision focused upon particular areas of classification where changes in the organisation of work or in the type of work performed had been most apparent. These include jobs related to management, information and communications technologies, health, social care, education, culture, media, sport and leisure. The revised classifications did not affect the HR occupational area. However there are a number of issues with the SOC codes which affect the extent to which we can rely on these classifications to make claims on the size of the HR workforce. The issues are outlined below. 1.2.1 HR, Industrial Relations and Administration A major problem with estimating the size of the HR workforce is the continued coupling of industrial relations with HR. In the past the term industrial relations referred to the relationship and interactions between employers and employees. From this perspective, industrial relations covered all aspects of the employment relationship, including HR management, employee relations, and union management. However, in recent times, the definition of industrial relations has been narrowed, now referring specifically to the study and practice of collective bargaining, trade unionism and labour management. While HR on the other hand, deals with non-union employment relationships and personnel practices and policies. 1 Despite this distinction, official statistics still combine the two categories, making estimating those who engage in HR activities difficult. Furthermore, HR appears in three separate unit groups in the new standards occupational classification codes (SOC2010), which further emphasis the difficulty with estimating the size of the workforce. The table below shows the unit groups in which HR appear. 1 Introduction to Industrial relations, 2007, http://industrialrelations.naukrihub.com/introduction.html Page 8 of 32

1. Introduction Table 1: HR in the SOC2010 Unit Group Group Title Description 1135 3562 HR managers and directors HR and Industrial relations officer HR managers and directors plan, organise and direct the personnel, training and industrial relations policies of organisations, advise on resource allocation and utilisation problems, measure the effectiveness of an organisation s systems, methods and procedures and advise on, plan and implement procedures to improve utilisation of labour, equipment and materials. HR and industrial relations officers conduct research and advise on recruitment, training, staff appraisal and industrial relations policies and assist specialist managers with negotiations on behalf of a commercial enterprise, trade union or other organisation. Job holders in this unit group provide administrative support for the HR operations within organisations. HR administrative 4138 occupations Source: ONS (2010) Standard Occupational Classifications 2010: volume 1 structure and descriptions of unit groups. Office for National Statistics While there is a clear rationale for the distinction between HR managers and HR administrative occupations, the combination of HR and industrials relations occupations fails to fully grasp the distinct nature of these two different roles. 1.3 Defining Human Resources HR management aims to improve the productive contribution of individuals while simultaneously attempting to attain other societal and individual employee objectives (Schwind Das & Wagner, 2007 2 ). An HR specialist is someone who devotes more than 50% of their time at work to employee relations 3. HR professionals manage a suite of functions within an organisation which include, but are not limited to: maintaining awareness of and compliance with national, local and organisational policy organisational design and development (including business transformation and change management) industrial and employee relations workforce analysis and workforce personnel data management recruitment, selection, and resourcing employee record-keeping (including performance, conduct and behaviour management) employee learning and development employee retention and loyalty. The implementation of these functions may be directly managed by an HR department or resourced by an internal or external partner. HR as a concept is not sector-specific and, as such, is not represented by a Sector Skills Council (SSC). Its myriad functions are utilised by all business organisations, globally, both formally and informally. Due to its pan-sector nature, the area of HR is represented by the CFA, the standard setting organisation (SSO) responsible for non-sector-specific areas. 2 Das, H., & Schwind, H., & Wager, D. (2007). Canadian HRs Management: A Strategic Approach. Toronto, ON: McGraw-Hill Ryerson. 3 CIPD (2008). Understanding and attracting strategic HR talent. A focus on the business partner role. Page 9 of 32

1. Introduction HR functions are often delivered in close partnership with other divisions of the same organisation or impact upon projects, programmes and functions elsewhere in the organisation. As such, presenting a conclusive definition of the term HR is fraught with difficulty. 1.4 The importance of Human Resources HR Management can be considered to be one of the critical occupational roles in all sectors and all businesses in the UK. HR management is the legal liaison between an organisation and its employees. HR is no longer seen as merely an organisational support function, but as a standalone function which adds value through its contribution to strategic decision-making 4. Indeed, HR as a function has undergone significant change in recent years with many HR professionals taking on the role of business partners and, in turn, engaging in activities such as enabling organisational growth, top level talent management and integrated workforce planning, in conjunction with senior business leaders 5. Without a strong HR management structure, an organisation will fail to capitalise on its potential, resulting in lost growth opportunities, a lack of competitiveness, lower productivity and, potentially, organisational failure. The success or failure of a company s ability to grow can often be ascribed to its HR department. In addition to strategic organisational development, HR departments are responsible for hiring individuals with the skills and knowledge to invigorate the company. To be successful, the workforce must be highly skilled, flexible, committed and innovative. The HR department is responsible for staff retention, employee development and the development of strong partnerships between the organisation and labour unions. It is also integral in ensuring that employees adhere to internal and external policies. The growing recognition of the importance of this occupational job role has lead to an increase in the demand for related skills. The broadening of the HR skills set is largely a reflection of the rate and extent of structural changes occurring across all sectors. Changing economic conditions have led to a diversification of the role and responsibilities of HR staff and, as a result, wider skills and high skill levels are becoming increasingly necessary. In the current economic climate, HR professionals are being required to perform to a higher standard to ensure that resources are managed as efficiently as possible, that staff are retained and released where appropriate, and that policies are adhered to. It is therefore important that current and future HR professionals are equipped with the right skills to remain competitive in the international workplace. In order for this to happen, it is important to identify what skills HR professionals have now, what skills are lacking, and what skills are required to be developed for the future. Only by gaining a full picture of this occupational group can plans be made to achieve this vision. 4 Ulrich & Beatty (2001) From partners to players: extending the HR playing field. HR Management. Winter. Vol. 40, No. 4. 5 CIPD (2008). Understanding and attracting strategic HR talent: A focus on the business partner role Page 10 of 32

2. Profile of HR Practitioners 2.1 Size of the workforce The HR occupation makes up less than 1 per cent of employment in the UK. Across the three HR related categories: HR and industrial relations accounts for 0.44 per cent of total employment in the UK HR managers and directors accounts for 0.39 per cent of total employment in the UK HR administrative occupations accounts for (0.11 per cent) of total employment in the UK. Table 2: Size of the workforce (Apr June 2011) (000s) % of total employment Total employment 29,069 100% HR managers and directors 114 0.39% HR and industrial relations officers 129 0.44% HR administrative occupations 32 0.11% Total 275 0.94% Source: ONS (2010) EMP16: All in employment by status, occupation and sex, Office for National Statistics 2.2 Status of the workforce In 2011, there were more full-time HR workers than part-time workers. In all HR categories full-time employees make up a large share of the occupation than part-time employees, indicating that the workforce is dominated by full time workers. A breakdown across occupational groups indicates that: 82.4 per cent of HR managers worked full time, while 9.6 per cent worked parttime 79.0 per cent of HR and industrial relations officers worked full-time, with only 12.4 per cent worked part-time 71.8 per cent of HR administrative staff worked full-time. HR workers are more likely to be working for an organisation as an employee rather than in self employment. Only a small minority of HR workers are self employed (0.25 per cent). Table 3: Status of the workforce (Apr June 2011) Total in Self- employed Employees (000s) employment (000s) Full time Part time Total Total employment 29,069 18,301 6,680 3,951 HR managers and 114 94 11 * directors 0.39% 82.4% 9.6% - HRs and industrial 129 102 16 10 relations officers 0.44% 79.0% 12.4% 0.25% HRs administrative 32 23 * * occupations 0.11% 71.8% - - Total 275 219 27 10 0.94% 79.6% 9.8% 0.25% *sample size to small for estimates Total in employment may include those in self employed category Source: ONS (2010) EMP16: All in employment by status, occupation and sex, Office for National Statistics Page 11 of 32

2. Profile of HR Practitioners 2.3 Gender of the workforce There are more female HR professionals (170,000) than male (80,000) HR professionals in employment. 97.7 per cent of male HR professionals are employed as full-time employees compared to 74 per cent of female HR professionals who work full-time. Those employed in administrative roles were less likely to work full-time compared to other HR roles. Table 4: Status of the workforce (Apr June 2011) Male Female Full time Total Full time Part time Total HR managers and directors 43 44 51 10 61 97.7% - 83.6% 16.3% - HRs and industrial relations officers 35 36 67 15 82 97.7% 81.7% 18.2% - HRs administrative occupations - - 20-27 - - 74.0% - - *sample size to small for estimates There was no data on part time employment for males due to the sample size being too small Source: ONS (2010) EMP16: All in employment by status, occupation and sex, Office for National Statistics 2.4 Salary of the workforce The table below shows that despite the recession and spending cuts, the majority of HR professionals have had a pay rise in the last 12 months (53 per cent). Two in five (40 per cent) have experienced a pay freeze, while only 3 per cent received a pay cut. Across sectors, HR professionals working within the manufacturing and production sector were significantly more likely than public sector, private sector and voluntary sector employees to receive a pay rise. HR professionals in the public sector were more likely than those working in the private sector, the voluntary sector and the manufacturing and production sector to have a pay freeze. While those in the private sector were the most likely to have had a pay cut. On average, HR professionals earn 44,033 per year. HR professionals in manufacturing and productions are likely to earn more than average ( 51,259) compared to those in the voluntary sector who earned less than average ( 36,280). Chartered Institute of Personnel and Development (CIPD) members will earn more than average compared to non CIPD members. Table 5: Annual salary and pay changes Salary (mean score) Pay rise Pay freeze Pay cut All HR professionals 44,033 53% 40% 3% Manufacturing and production 51,259 65% 29% 3% Private sector service 50,297 55% 37% 4% Public sector 37,157 47% 48% 2% Voluntary, community and not for profit 36,280 52% 41% 2% CIPD member 45,811 - - - CIPD non-member 37,833 - - - Source: CIPD (2010) HR Outlook Autumn 2010, page 27 Page 12 of 32

2. Profile of HR Practitioners 2.5 Qualification levels of the workforce 6 HR professionals are not required to be licensed in order to practice. People can obtain access to the profession without any qualifications, although obtaining a CIPD qualification is generally seen as a route to the profession. Those who normally work at the support level in HR are usually qualified at certificate level of NVQ level 3 equivalent. At the professional level the qualification is set at post graduate (level 7). The 2007 labour force survey suggests that of those employed in HR related roles: approximately 45 per cent have a degree or equivalent as their highest qualification 12 per cent have a post graduate qualification or higher 20 per cent have up to NVQ level3 (or equivalent) 20 per cent have up to NVQ level 2 (or equivalent). 6 CIPD (2009a) Panel on fair access to the professions: submission to the cabinet office, page 5 Page 13 of 32

3. HR Trends and Drivers This section explores the key drivers expected to have a significant bearing on the HR function. 3.1 Going strategic The HR function has recently undergone some significant changes. Traditionally, HR has been an administrative function focused on the transactional elements of employee relations. However, as business leaders put talent at the heart of their strategic plans, there has been a move to increase the value of HR. This move has centred on the desire for the HR function to be more strategic and business focused, as well as other key HR strategic issues, such as demographic change, global workforce planning, corporate social responsibility, organisational transformation, change management, new models of working, developing a learning culture, work-life balance, and cultural renewal. 7 However, evidence suggests that the shift to strategic HR is being held back by the HR function spending too much time on administrative activities and insufficient time on transformational ones. The risk is that if HR continues to focus on these administrative activities, the more strategic advisory roles will be taken on by external specialists. A 2009 i4cp report 8 found that in 78 per cent of higher market performers the head of HR reports directly to the CEO, compared to 68 per cent of lower market performers. Higher market performers were also more likely to have HR structured with a combination of centres of excellence, shared services and HR functions 9. Therefore, if businesses in the UK want to increase their productivity they will need to unburden HR staff from administrative tasks to allow them to become more strategic. This shift to strategic HR is expected to increase the demands placed on HR professionals. As a result, the levels of qualifications held by HR professionals are expected to rise as they become more strategically focused. 10 3.2 The search for talent Attracting and retaining talented individuals is an important priority for businesses in the UK. 97 per cent of CEOs around the globe believe that having the right talent is the most critical factor for business growth. However, competition for those considered to be suitable for employment will only increase as firms within emerging economies continue to grow, and foreign entrants potentially accelerate their emerging market strategies to compensate for sluggish domestic markets 11. HR professionals will therefore spend much of their time on recruiting talented individuals into the business, and finding ways to retain them. Globalisation has however, increased the search for talent to an international marketplace and therefore HR professionals will need to develop workable global talent souring strategies. Delays in filling key roles will have a major impact on businesses and so HR professionals must ensure that succession plans are put in place. 7 Fast Future (2011) Transformational thinking for a new era in business, page 36 8 Should the Head of HRs Report to the CEO? http://www.i4cp.com/productivity-blog/2009/09/08/should-the-head-of-human-resources-reportto-the-ceo [ access 28 February 2012] 9 Fast Future (2011) Transformational thinking for a new era in business, page 36 10 Fast Future (2011) Transformational thinking for a new era in business, page 36 11 ibid, page 38 Page 14 of 32

3. HR Trends and Drivers 3.3 Technology and social media Changes in technology are expected to have a significant influence on the HR function. Predictive analytical approaches are expected to play an increasingly important role within organisations, and will play a crucial role in assessing an organisations current and future health. At present workforce data is scattered among multiple systems in an organisation and can be acquired in varied formats making it difficult to get a clear picture of the workforce in an organisation. The use of IT systems is expected to help alleviate this issue. HR professionals will therefore need to become more technologically savvy as ICT becomes further embedded within their function 12. Social media is also expected to have a significant impact on the HR function, particularly in the recruitment process. There is a growing recognition that social media based approaches cost very little, provide another form of reference checks and create opportunities to access the global talent pool. Yet, despite the gradual adoption of social media, concerns remain over HR s capacity to experiment and adopt innovative ways of working. In the future HR professionals must seize the opportunities offered by social media to ensure that they are maximising their opportunity for recruitment. 13 3.4 Diversity in the workforce Diversity, inclusion and discrimination become more critical as organisations globalise and seek to access a more mobile, informed, and selective international talent pool. An increasingly diverse workforce will place scrutiny on the quality and effectiveness of an organisations diversity and inclusion policies 14. While shifts are expected to occur in contractual diversity, where employees will work in more decentralised, specialised organisations, and employer-employee relationships will become less standardised and more individuals 15. HR professionals will therefore need to focus a great deal of their time on understanding the issues of diversity and ensuring that polices and procedures have been put in place to deal with this diverse workforce. 3.5 Budget constrains In this time of economic uncertainty where budgets are being cut, many organisations are buffering the costs of recruitment by maximising personal development through flexible self-service training and education, and lateral job opportunities within an organisation. HR professionals will play an increasingly important role in facilitating the worker to grow, and will therefore become more like trainers. However the increase in training and qualification levels across the workforce will mean that HR professionals will have to take more individualised approaches to motivating and training staff. They will therefore need to become more flexible in their approaches 16. 12 Fast Future (2011) Transformational thinking for a new era in business, page 40 13 Fast Future (2011) Transformational thinking for a new era in business, 48 14 Fast Future (2011) Transformational thinking for a new era in business, page 46 15 Fast Future (2011) Transformational thinking for a new era in business, page 53 16 Fast Future (2011) Transformational thinking for a new era in business, page 50 Page 15 of 32

3. HR Trends and Drivers 3.6 Outsourcing Many HR processes are being outsourced due to a lack of capabilities in the HR function, in terms of quantity of workers and talent within the organisation. A survey by CIPD showed that the main driver for outsourcing HR activities were access to skills and knowledge, quality and cost reduction 17. As such, there is a great need for the HR function to develop the skills and processes needed to manage multiple outsourced providers at both the strategic governance and operational level. Furthermore, the benefit of outsourcing is that it may allow HR professionals a greater opportunity to focus on the strategic elements of their job rather than the administrative tasks that they are often consumed with. 17 CIPD (2009b) HR outsourcing and the HR function, page 9 Page 16 of 32

4. Market Supply 4.1 Human Resources qualifications According to the Register of Regulated qualifications, which contains detailed of regulated qualifications in England, Wales and Northern Ireland, there are 21 HR management qualifications delivered by 7 Awarding Bodies. These are made up: 7 qualifications at level 3 2 qualifications at level 4 4 qualifications at level 5 6 qualifications at level 6 2 qualifications at level 8. More than half (66 per cent) of all HR qualifications in England, Wales and Northern Ireland are higher level (4-8). Table 6: Human Resource Management Qualifications in England, Northern Ireland and Wales Qualification Number Awarding Body Qualification Title Level Type 500/2765/7 ABE Level 3 Certificate in HR Management 3 VRQ 500/9614/X ABE Level 4 Diploma in HR Management 4 QCF 500/2767/0 ABE Level 5 Diploma in HR Management 5 Higher Level 500/9925/5 ABE Level 5 Diploma in HR Management (Higher) 5 QCF 500/2766/9 ABE Level 6 Advanced Diploma in HR Management 6 Higher Level 500/9926/7 ABE Level 6 Diploma in HR Management (Graduate) 6 QCF 600/0370/4 ABE Level 6 Extended Diploma in HR Management 6 QCF 600/1935/9 ABE Level 7 Diploma in International HR Management 7 QCF 600/1948/7 ABE Level 7 Extended Diploma in International HR Management 7 QCF 600/3404/X ATHE Level 6 Certificate In HR Management 6 QCF 501/1016/0 CIPD Level 3 Award in HRs Essentials 3 QCF 501/0759/8 CIPD Level 3 Certificate in HRs Practice 3 QCF 501/0763/X CIPD Level 3 Diploma in HRs Practice 3 QCF 501/1542/X Institute of Level 3 Certificate in HRs Management for Hospitality and Hospitality Tourism 3 QCF 500/6229/3 IOCM Level 5 Diploma in HR Development 5 Higher Level 500/6230/X IOCM Level 6 Advanced Diploma in HR Development 6 Higher Level 500/8372/7 LCM Level 3 Diploma in HR Development & Marketing 3 VRQ 500/8374/0 LCM Level 4 Higher Diploma in HR Development & Marketing 4 Higher Level 500/8449/5 LCM Level 5 Professional Diploma in HR Development & Marketing 5 Higher Level 500/8471/9 LCM Level 6 Graduate Diploma in HR Development & Marketing 6 Higher Level 500/8686/8 VTCT Level 3 Award in HR Management for the Hair and Beauty Sector 3 QCF Source: The Register of Regulated Qualifications: http://register.ofqual.gov.uk/qualification In Scotland the provisions for HR professionals are limited. SQA the national accreditation and awarding body offers two qualifications for HR professionals in Scotland. These are a: 1. HNC qualification in HR Management at SCQF level 7 & 8 2. HND qualification in HR Management at SCQF 7 & 8. Page 17 of 32

4. Market Supply The HNC/D in HR Management will prepare candidates for employment in HR management and develop their knowledge and understanding of the roles, responsibilities and processes involved in this area. The qualification includes the following areas: Introduction to HR Management, Employment Law, Introduction to Continuing Professional Development, An Introduction to Finance, Recruitment, Selection & Induction, Interviewing and IT in Business 18. These qualifications are equivalent to QCF level 4 and 5, further emphasizing the fact that the supply of HR qualifications is higher level. Traditionally, the HR profession has been very open, requiring no specific qualifications to enter at the junior level. While the profession is not licence to practice, most employers expect CIPD professional membership and qualifications. CIPD thus provide a number of qualifications for members and non-members alike. The take up of these qualifications is likely to exceed the take up of the qualifications listed on the Register of Regulated Qualifications due to the fact that undertaking CIPD qualifications provides professional recognition. CIPD qualifications are delivered across the UK with over 13,000 students joining their programmes each year. CIPD offer qualifications at Advanced, Intermediate and Foundation Levels 19. At Advanced level, CIPD offers: Advanced Diploma in HR Management Advanced Diploma HR Development Advanced Certificate in HR Advanced Awards in HR. CIPD Advanced level qualifications are at level 7 (level 11 and 9 for Scotland and Ireland respectively). They are equivalent to a postgraduate level qualification. At Intermediate level, CIPD offers: Intermediate Diploma HR Management Intermediate Diploma HR Development Intermediate Certificate in HR Management Intermediate Certificate in HR Development. The CIPD qualifications at Intermediate level offer learners a platform to further develop their HR, L&D or other specialist knowledge. At Foundation level, CIPD offers: Foundation Certificate HR Practice Foundation Certificate in L&D Practice. Foundation level qualifications allow learners to acquire a wide range of relevant practical skills in HR and development. 18 SQA - http://www.sqa.org.uk/sqa/25953.html 19 WWW.cipd.co.uk/qualifications Page 18 of 32

4. Market Supply While HR professionals do not have a large supply of qualifications to choose from, what is on offer seems to be sufficient to cater for those entering the field of HR, and those seeking continuing professional development. 4.2 HRs Standards In 2011, CFA reviewed the 2008 suite of HR National Occupational Standards (NOS) to ensure that the NOS were still fit for purpose and reflected the industry needs. The table below presents the latest suite of NOS for HR professionals. Table 7: HRs National Occupational Standards (2011) URN Title Overview CFAHR1 CFAHR2 CFAHR3 CFAHR4 CFAHR5 CFAHR6 CFAHR7 CFAHR8 CFAHR9 Develop an HR strategy Implement and evaluate an HR strategy Deliver organisation design and structure Manage succession planning Develop organisational talent Develop HR policies Plan and deliver recruitment Manage and facilitate people release Facilitate the delivery of This standard is about developing and agreeing an HR strategy. It includes evaluating existing strategies against organisational needs and ensuring that the HR strategy is integral to the overall strategy of the organisation and takes account of external and internal influences and trends. It is for HR professionals who are involved in the development of HR strategy. This standard is about implementing and evaluating an HR strategy. It includes planning, obtaining resources for and gaining the commitment of others to implementation and evaluating the strategy against agreed success measures and criteria. It is for HR professionals who are involved in the implementation and evaluation of HR strategy. This standard is about making sure that the organisation is appropriately designed and structured to deliver its objectives, in line with the organisational strategy and operating plan. It includes identification of functions required within the structure, the design of jobs and implementation of systems for job evaluation and levelling. It is for HR professionals who are involved in the delivery of organisation design and structure. This standard is about managing succession planning for an organisation, in order to identify and manage people opportunities and risks within the organisation. It includes developing and agreeing a succession planning process and methodology that is integrated with other HR processes and implementing and evaluating the process and methodology. It is for HR professionals who are involved in the management of succession planning. This standard is about developing the talent within an organisation such that people at all levels of the organisation possess and develop the skills and knowledge that they need. It includes developing and communicating a talent development plan and developing and implementing talent development programmes, ensuring fair access to opportunities. It is for HR professionals who are involved in the development of organisational talent. This standard is about developing and evaluating HR policies for an organisation. It includes designing fit-for-purpose policies which are consistent with organisational strategy and with legal and ethical requirements, agreeing policies with stakeholders and evaluating policies against agreed success criteria. It is for HR professionals who are involved in the development of HR policies. This standard is about planning and implementing recruitment such that the organisation can identify and attract people with the capability to create competitive advantage and meet the requirements of the organisational strategy. It includes developing short and long-term recruitment plans, conducting talent identification exercises and implementing selection and induction processes. It is for HR professionals who are involved in planning and developing recruitment. This standard is about managing and facilitating people release e.g. retirement, redundancy, resignation, ill health, performance or conductrelated dismissal, transfers. It includes developing and agreeing release processes, implementing these in line with the values of the organisation and current employment law and providing both individuals and managers with appropriate support. It is for HR professionals who are involved in managing and facilitating people release. This standard is about planning and implementing performance management systems. It includes identifying best practice, designing performance Page 19 of 32

4. Market Supply CFAHR10 CFAHR11 CFAHR12 CFAHR13 CFAHR14 CFAHR15 performance management Manage reward and recognition strategies Plan and implement employee relations strategy Deliver employment relations negotiations Plan and implement employee engagement solutions Plan the structure and design of the HR function Manage health and wellbeing management systems that are integrated with other HR processes, implementing performance management interventions and providing appropriate support to both managers and individuals. It is for HR professionals who are involved in the delivery of performance management. This standard is about planning, implementing and evaluating reward and recognition strategies. It includes developing affordable reward systems that take account of internal and external factors, implementing reward systems, ensuring their fair application across the organisation and evaluating reward systems, making recommendations for change. It is for HR professionals who are involved in the management of reward and recognition strategies. This standard is about managing employee relations to ensure that the relationship between an organisation and its staff is managed appropriately and in line with employment law. It includes ensuring that policies, practices and procedures are comprehensive and well understood both within the HR function and the wider organisation, resolving employee relations issues and negotiating with employee representatives. It is for HR professionals who are involved in planning and implementing employee relations strategy. This standard is about delivering employment relations negotiations. It includes identification of the organisation s objectives and strategy for negotiations, facilitating negotiations in line with procedures and protocols, providing appropriate support to managers during negotiations, ensuring implementation of agreements and evaluating the process to inform continuous improvement. It is for HR professionals who are involved in delivering employment relations negotiations. This standard is about managing employee engagement to ensure that the employment experience is positive. It includes establishing the drivers of employee engagement within an organisation, planning employee engagement initiatives, ensuring that managers engage with the approach and implementing employee engagement processes, supporting managers as appropriate. It is for HR professionals who are involved in planning and implementing employee engagement solutions. This standard is about making sure that the HR function is appropriately designed and structured to deliver its objectives. It includes defining the services to be delivered by the HR function, agreeing service levels and key performance indicators, assigning responsibilities to meet stakeholder needs and establishing systems to evaluate performance and inform continuous improvement. It is for HR professionals who are involved in planning the structure and design of the HR function. This standard is about ensuring that appropriate strategies are in place to manage the health and wellbeing of staff. It includes designing and communicating health and wellbeing strategies, gaining commitment from senior decision-makers, providing support to both individuals and managers and evaluating health and wellbeing strategies to inform continuous improvement. It is for HR professionals who are involved in the management of health and wellbeing. 4.3 HR Apprenticeships The CFA, in partnership with CIPD, are developing two apprenticeships in HR: level 3 HR Management apprenticeship level 5 HR Management apprenticeship. The two apprenticeships will be made to comply with the Specification of Apprenticeship Standards for England (SASE) with the possibility of being rolled out to the other nations (Northern Ireland, Scotland and Wales). The SASE sets out the minimum requirements which must be included in any recognised English apprenticeship framework. Compliance with the SASE is a statutory requirement of the Apprenticeships, Skills, Children and Learning (ASCL) Act for all learners and Page 20 of 32

4. Market Supply training providers. The SASE was published by the Department for Business Innovation and Skills, Department for Education and the National Apprenticeship Service on 20 January 2011. The key SASE requirements include: 1. the delivery of a competence (NVQ qualification) and knowledge based qualification (technical qualification) 2. transferable skills English and Maths and ICT 3. employee Rights and Responsibilities (ERR) 4. personal, learning and thinking skills (PLTS) 5. a minimum Guided Learning Hours (GLH). The new compliant frameworks also have information about purpose, entry conditions, job roles, progression routes and equality and diversity. Learners who were registered onto the old blueprint frameworks need not undertake the PLTS element, transferable skills ICT and the minimum GLHs. The new HR apprenticeships will offer employers an innovative, cost-effective way of developing HR capability within their organisations. By combining on and off-the-job learning, those undertaking an apprenticeship will more quickly develop insights into their organisation s capability needs and therefore be more effective in applying their HR knowledge to support their organisation s goals. The Higher Apprenticeship will help employers to attract young, bright individuals who may be deterred from going to university due to the recent changes in tuition fees, but who want to develop a career in a business-related profession. The Apprenticeship will also support the development of higher level skills among existing HR staff, so enabling HR functions to concentrate more on transformational HR activities that support the needs of their business. 4.4 Training for HR practitioners 20 There are a number of training courses available for HR professionals. A web search for training courses for HR professionals in the UK yielded a result of over 28 million websites. Across the four nations the largest number of results came from England with over 53 million websites, Scotland and Wales with 2 million results and Northern Ireland with 1 million results. The quality of training offered via the web will be mixed, and will range from large suppliers who cover a vast array of topics, to smaller specialised suppliers. Whether these training courses meet the specific needs of organisations or individuals is unknown. Nevertheless, the supply of training courses for HR professional is plentiful. The CIPD are one of the main suppliers of training for HR professionals. Their directory lists over 130 short training courses, covering a wide variety of business functions and skills. The 130 short courses cover 10 different subject areas: Coaching courses Employment Law Courses Learning and development Management and People Organisational Development HR management 20 CIPD (2011) Short training courses, http://www.cipd.co.uk/training/shortcourses/bysubject.htm Page 21 of 32

4. Market Supply Psychology at work Recruitment and selection Reward Management Talent management The courses available focus on both the transactional nature of HR, as well as the strategic elements of HR. In the future there will continue to be a growing number of courses which focus on the strategic elements of HR. Page 22 of 32

5. Skill Needs 5.1 Recruiting HR Practitioners 5.1.1 Number of vacancies Vacancy data notified to Job Centre Plus in January 2012 is as follows. Table 8: Job centre plus vacancies January 2012 by SOC2000 England Wales Scotland 1135: Personnel, training and industrial relations managers 193 3 15 3562: Personnel and industrial relations officers 990 30 18 Source: Nomis (2012) Vacancies notified by occupation According to the table above the largest number of vacancies for HR practitioners was in England with 1,183 vacancies. Both Wales and Scotland had 33 vacancies for HR staff. Due to the classification of the data, it is impossible to say whether this figure truly reflects the number of HR vacancies, or whether it is biased toward industrial relations type roles. 5.1.2 Type of vacancies In autumn 2010 the majority of roles that were recruited for in the HR function were as follows: administrative support (53 per cent) generalists (25 per cent) specialists (19 per cent) HR leader (18 per cent) HR partner (16 per cent) graduate trainees (7 per cent). Figure 1: Recruited roles Source: CIPD (2010) HR Outlook Autumn 2010, page 12 Page 23 of 32

5. Skill Needs 5.1.3 Difficulty in recruiting for different HR roles The table below shows how easy or difficult it is to recruit for different HR roles. As the table shows, it is especially difficult to recruit HR specialists compared to administrative support staff who are relatively easy to recruit. Business support partners are also relatively difficult to recruit. Table 9: Ease/difficulty of recruiting for different HR roles (%) HR leader Generalist Specialist HR business partner Graduate Administrative support Very easy 14 10 9 11 24 21 Easy 33 38 31 33 24 41 Neither easy 26 25 32 35 19 nor difficult 19 Difficult 33 19 31 21 12 17 Very difficult 0 6 5 4 6 2 Don t know/can t 0 1 0 0 0 0 remember Base 21 147 118 73 37 249 Net score - +23 +4 +19 - +42 Source: CIPD (2010) HR Outlook Autumn 2010, page 13 5.1.4 Recruitment channels When recruiting HR staff the most preferred channel of recruitment was advertising on their corporate websites (46 per cent) and using a recruitment agency (46 per cent). Online methods also proved high, with 37 per cent using online advertising or online job boards at 35 per cent. Headhunters (1 per cent) and alumni (2 per cent) were the method least likely to be used. Figure 2: Channels of HR recruitment Source: CIPD (2010) HR Outlook Autumn 2010, page 12 Page 24 of 32

5. Skill Needs 5.1.5 Recruitment challenges The biggest challenges for organisations in the UK when trying to recruit talented individuals into HR roles are as follows 21 : competitive salaries/benefits being able to offer salaries which are competitive within the geography and HR function career development a lack for roles for candidates to progress to with the HR function budget constraints being able to pay high salaries culture fit having someone who fit with the organisational culture and can support it fully in their role finding talent - the biggest challenge has been attracting talented individuals remote geographical location of the organisation recession reducing recruitment budgets and influencing the priorities for skills relevant experience finding candidates with the right depth and breath of HR knowledge and experience and the correct level suitable skills getting the skills needed for the price they pay lack of practical knowledge about HR practices finding candidates who have knowledge of the industry and HR experience. Most recruitment challenges facing the industry are interrelated, in that they are all around individuals skills, experience and qualifications. Potential job applicants do not have suitable skills, enough or the right type of HR experience or lack appropriate qualifications to fill HR positions. In addition to skills, challenges also relate salary. Finding the right skills for the price the organisation can pay, offering competitive salaries so talented people stay with the organisation, or simply offering salary that fit within budget of the organisations all present challenges. Also important is finding people who fit in with the organisations culture. There are also a number of external challenges facing those recruiting HR roles; this included the recession and the location of the organisation 22. 5.2 Gaps in the HR function 5.2.1 Skill and capacity gaps in the HR function 11 per cent of HR professionals who have a responsibly for running a team said that skills/capacity gaps did not exist within their HR function. HR professionals working within larger organisations were significantly more likely to state that they had skills gaps than those working within small or medium sized organisations. Those working within the public sector and the voluntary sector were more likely to state that they had skill gaps than those working in the private sector and the manufacturing and production sector 23. 21 CIPD (2010) HR Outlook Autumn 2010, page 17 22 CIPD (2010) HR Outlook Autumn 2010, page 17 23 CIPD (2011) HR Outlook Sping 2011, page 18 Page 25 of 32

5. Skill Needs Where skills gaps occurred in their HR function, this was mostly likely to be in: organisation development (36 per cent) and resourcing and talent development (36 per cent) employee engagement (34 per cent) performance and reward (33 per cent) learning and talent development (29 per cent) organisation design (28 per cent). Figure 3: Skills and capability gaps in achieving HR agenda Source: CIPD (2011) HR Outlook Spring 2011, page 18 5.2.2 Behavioural gaps in the HR function The table below shows the eight behaviours that the CIPD HR professional map identifies as key to a successful HR function. Table 10: CIPD HR profession map - behaviors Behaviour Description Curious Decisive thinker Skilled influencer Driven to deliver Shows an active interest in the internal and external environment and in the continuous development and improvement of self and others at both organisation and individual levels. Is open-minded with a bias and willingness to learn and enquire Demonstrates the ability to analyse and understand data and information quickly. Is able to use information, insights and knowledge in a structured way using judgement wisely to identify options and make robust and defendable decisions. Demonstrates the ability to influence across a complex environment, to gain the necessary commitment, consensus and support from a wide range of diverse stakeholders in pursuit of organisation benefit. Demonstrates a consistent and strong bias to action, taking accountability for delivery of results both personally and/or with others. Actively plans, Page 26 of 32

5. Skill Needs Collaborative Courage to challenge Role model Personally credible prioritises and monitors performance, holding others accountable for delivery. Works effectively and inclusively with colleagues, clients, stakeholders, customers, teams and individuals both within and outside of the organisation. Shows courage and confidence to speak up, challenge others even when confronted with resistance or unfamiliar circumstances. Consistently leads by example. Acts with integrity, impartiality and independence, applying sound personal judgement in all interactions Builds a track record of reliable and valued delivery using relevant technical expertise and experience and does so with integrity and in an objective manner Source: CIPD (2011) HR Outlook Spring 2011, page 14 According to senior HR professionals, the top three behaviours that they feel their function performance well are: collaborative role model personally credible. The behaviours least likely to be shown in their functions were: curious skilled influencer courage to challenge. Figure 4: HR function behaviors (%) Source: CIPD (2011) HR Outlook Spring 2011, page 15 The HR function lacks proficiency with the following behaviours: curious, skilled influencers and courage to challenge. Page 27 of 32

5. Skill Needs 5.2.3 Addressing skill gaps In order to address the skills gaps in their HR functions, the majority of leaders used: on-the-job training (69 per cent) coaching (57 per cent) internal knowledge-sharing events (40 per cent) mentoring (36 per cent). Public sector workers were less likely than those within the private sector to use external courses as a means of reducing skills gaps, no doubt due to budget cuts and cost reductions. 24 Figure 5: Addressing skills gaps within the HR function Source: CIPD (2010) HR Outlook Autumn 2010, page 21 24 CIPD (2010) HR Outlook Autumn 2010, page 21 Page 28 of 32

6. Future Needs 6.1 Recruiting in the Future In the future, the pattern of HR will be to recruit more administrative support roles in the HR function, followed by HR business partners and then graduate trainees. This is interesting given that the HR function seem to be moving to more strategic activities and the transactional elements of HR are increasingly being outsourced. Figure 6: Recruitment in HR in the future Source: CIPD (2010) HR Outlook Autumn 2010, page 12 6.2 Future skill needs for HR professionals Most HR professionals are moving towards more strategic work. Those HR professionals who understand the language of business, who can speak in financial terms and who express the value of their work in relation to its impact on the bottom line are vital for the future success of the business. Thinking about the factors driving HR there are several core skills that must be developed 25 : business skills HR professionals must understand the dynamics of business and posses the financial acumen to asses and communicate the HR strategies impact on the bottom line. Project and process management skills also fall within this category leadership skills HR professionals must have the ability to create a vision and strategy and ensure the alignment of the organisation with the strategy. They will also need to become more efficient in managing and motivating teams consulting skills HR professionals will need to develop consulting skills which focus on the ability to market their work within the organisation. Technology skills as technology becomes embedded within the HR function, HR professionals will need to develop a proficiency in broad HR applications and their potential delivery systems. They must then be able to apply this knowledge to the business-planning process. global mindset as business become global, HR professionals will be required to understand the dynamics of the global marketplace. 25 Society for Human Resource Management (2002) The future of the HR profession. Page 29 of 32

6. Future Needs Business acumen and the ability to translate business strategy into effective HR strategy are the skills most needed by HR professionals in the future, as well as developing deep technological experience and having a global mindset. 6.3 Future behaviours in the HR function In CIPD s 2011 HR Outlook Report the most important behaviours for a success HR function will be: skilled influencer driven to deliver courage to challenges Figure 7: Future behaviors Source: CIPD (2011) HR Outlook Spring 2011, page 16 In the future the most important behaviours will be - skilled influencer, driven to deliver and courage to challenges. All of these behaviours are forward thinking, and are ones that the HR function should aim to display in order to be successful. Page 30 of 32

8. The Way Forward The world of HR is changing. In the future, the HR function will move away from transactional activities to more transformational activities. However, it is currently being held back by its continued focus on administrative activities. In the future, HR professionals will need to be trained to think more strategically. This will require a new mindset for them and will require them to focus on the strategic elements of HR such as demographic change, global workforce planning, corporate social responsibility, organisational transformation, change management, new models of working, developing a learning culture, work-life balance, and cultural renewal. They will need to pay close attention to global changes in the marketplace and prioritise attracting and retaining the best talent from an international pool of applicants. They will also need to advise managers on how to improve and inspire their workforce to increase productivity and reduce recruitment costs. In enabling the move to the HR function the structure of HR departments in some organisations has already begun to change, by restructuring themselves to service accounts or business units, requiring HR generalists who are knowledgeable in all functions of HR. These HR generalists then provide relevant solutions or interventions to appropriately address the specific needs of their respective accounts, or the various units in the organisation. This structure enables more HR professionals to move away from the transaction-based to more solutions-focused activities 26. Technology and outsourcing will also become more important. By using technology or outsourcing services, HR can reduce some of its more routine tasks and processes and create more time for focusing on strategic activities. 27. 26 Abella, V (2004) The HR function of the future, page 40 27 ibid Page 31 of 32

9. Bibliography Abella, V (2004) The HR function of the future. CIPD (2008). Understanding and attracting strategic HR talent. A focus on the business partner role. Charted Institute of Personnel development CIPD (2009a) Panel on fair access to the professions: submission to the cabinet office. Charted Institute of Personnel development CIPD (2009b) HR outsourcing and the HR function. Charted Institute of Personnel development CIPD (2010) HR Outlook Autumn 2010. Charted Institute of Personnel development CIPD (2011) HR Outlook Spring 2011. Charted Institute of Personnel development Das, H., & Schwind, H., & Wager, D. (2007). Canadian HRs Management: A Strategic Approach. Toronto, ON: McGraw-Hill Ryerson. Fast Future (2011) Transformational thinking for a new era in business, page 36 ONS (2010) EMP16: All in employment by status, occupation and sex, Office for National Statistics Society for Human Resource Management (2002) The future of the HR profession. Ulrich & Beatty (2001) From partners to players: extending the HR playing field. HR Management. Winter. Vol. 40, No. 4. Page 32 of 32