Companies who want to expand their business operations can benefit greatly by hiring in the United Kingdom. Building a presence in the UK can give your company access to one of the world’s leading economies, along with a wide pool of skilled workers with specialized knowledge that can help you grow your company.
However, there are several challenges international companies may face when building a presence in the British market. This is where having specific objectives, such as a strategic workforce plan, can help you.
Developing a strategic workforce planning framework can help you reduce skills gaps, improve your recruitment processes, and identify important areas where your company can improve with data-driven metrics. Aligning hiring practices with long-term goals can help you manage your staff.
Are you ready to invest in effective processes and strategies with your future workforce in mind? This guide will tell you what you need to know to build a successful strategic workforce plan in the UK.
What is Strategic Workforce Planning?
Strategic workforce planning enables organizations to identify important areas that can be improved and build a workforce that supports company growth. With an effective HR plan, human resources teams can examine what a company needs to do to achieve short and long-term goals.
Talent identification is a major aspect of strategic workforce planning, which includes understanding talent needs and hiring the right candidates in positions that will enable success for both the employee and employer.
Additionally, having a well-developed strategic framework can help an organization ensure they have adequate staffing levels to deliver quality work while maximizing profits. This is especially true for companies hiring in the UK, as the United Kingdom has a significant labour shortage for numerous reasons, including Brexit.
What Are the Main Components of Strategic Workforce Planning?
Companies who would like to implement a more strategic approach when hiring in the United Kingdom should have a good understanding of the key goals and components of an HR plan.
- New hires should be beneficial for your business and complement your company’s goals, values, and needs. Finding the right person to fill the position and elevate your future workforce is essential.
- When expanding your staff, your new hires should possess the necessary skills and expertise required to help your business grow and thrive. Finding qualified workers ensures the quality of work.
- New hires should also be put in positions that will allow them to succeed in the current workforce and deliver long-term results to the future workforce. This can also include considering internal mobility to optimize your workforce’s strengths.
- Hires should also be made at the right time to benefit your business, addressing current workforce gaps and other essential areas of need. This ensures that all new team members are able to contribute quality work shortly after the onboarding process.
Successful operational workforce planning requires that your key business priorities inform strategic decisions. Important HR initiatives should be tailored around your company’s budgetary limitations and projected needs or profitability.
Effective strategies need to be properly communicated to your team and other important stakeholders. HR plans should also be adaptable and able to pivot based on rapid market changes.
What Are the Advantages of Strategic Workforce Planning
Setting up a fully developed strategic workforce planning framework can benefit companies in various important ways, from addressing future demand to benefiting the overall organizational strategy and more.
In addition to helping your company eliminate skills gaps, effective HR planning can help you increase employee engagement.
Cost Reduction
By strategically building a workforce in the United Kingdom, companies can experience a reduction in hiring costs. Having a strategic framework in place can provide leadership with a detailed overview of the organization’s headcount and the standard productivity levels of each employee.
Knowing your company’s headcount and demographics will ensure your company has an optimal number of employees, as overstaffing can lead to budget issues while understaffing can result in reduced productivity.
Additionally, by understanding the long-term goals of the company, companies can develop more attractive recruitment strategies to minimize potential external recruitment-related expenses.
Compliance
Another major benefit to strategic HR planning is that it can keep your company compliant with local labour laws. Companies hiring in the United Kingdom will need to obey national employment laws, such as the federal minimum wage, payroll tax, leave entitlements, and more.
Failure to follow the rules and regulations can lead to strict financial penalties such as significant fines for every unauthorized worker, along with potential reputational damage.
This is where an EOR such as Borderless can help. An EOR, or employer of record, can help you develop more effective hiring strategies to ensure that companies remain compliant in all aspects.
Improved Agility
Another advantage of establishing strong workforce planning processes is improved agility.
Having a detailed plan of what’s needed for your company to succeed that aligns with business goals can allow companies to anticipate changes in the market. Leaders can establish key metric benchmarks that identify challenges before they negatively impact productivity.
Examples can include examining the number of expected upcoming employee retirements and developing a succession plan, responding to employees’ desire for remote working arrangements to improve retention, and more.
Having a more agile framework can also facilitate a more flexible workforce, such as hiring independent contractors for specific projects.
Challenges to a Strategic Workforce Planning Framework
Determining a strategic workforce framework that compliments your company’s goals is vital for sustainable growth. However, developing an HR plan that works for your business and existing workforce can be complicated.
Companies that do not implement an appropriate HR plan can experience higher turnover rates, decreased worker morale, and stunted economic growth.
It’s important to ensure your plans and initiatives are SMART.
This means that your framework should:
- Have a specific outcome in mind
- Be measurable or quantifiable for more accurate progress tracking
- Be realistically achievable
- Have an outcome that’s relevant to the goals or future needs of your company
- Be completed within a determined time-sensitive deadline
Quality of Data
One factor that may impact a company’s ability to develop a successful HR plan is the quality of information. The strategic framework relies on accurate and up-to-date information about your workforce and the current market conditions.
If a company does not maintain accurate records, it may end up relying on incomplete or inaccurate data to make strategic decisions.
Companies will also need to know the right metrics to track to help them monitor progress on important goals.
Organizations that store information on different platforms can also experience difficulties accessing all relevant information.
Economic Uncertainty
A strategic workforce plan can help companies navigate changes in the marketplace, but volatility in the United Kingdom’s economy can make it somewhat difficult to generate accurate predictions.
Factors can include various economic conditions, including recessions and other unforeseen events, such as the pandemic.
Companies hiring in the United Kingdom can benefit by preparing HR plans for different economic situations and being ready to alter course depending on the circumstances.
Special Considerations for HR Plans in the United Kingdom
To set up an effective strategic workforce planning framework, companies will need to understand the state of the United Kingdom’s hiring market, along with the major employment laws that must be followed. There are several important things to know that might impact the recruiting process.
Labour Shortage
The labour shortage in the United Kingdom poses several significant challenges for employers, and any effective strategy must take the current market conditions into account.
Labour shortages can make it much more difficult for companies to hire and retain skilled workers in the UK. Companies may need to provide higher wages and more comprehensive benefits packages to remain competitive, which can significantly increase an organization’s cost per worker.
Additionally, not being able to fill important positions with the right candidates can lead to skills gaps and potential productivity losses.
The United Kingdom’s labour shortage is the result of a few contributing factors, such as the UK’s decision to withdraw from the European Union, a rise in early retirements, and the lingering economic impacts of the COVID-19 pandemic.
Currently, there are roughly one million job vacancies in the UK, and 11.5% of UK businesses have been impacted by the worker shortage, with industries like the food service sector being hit particularly hard.
Classifying Your Employees
Companies who want to develop more flexible strategic workforce planning frameworks may consider hiring either employees or temporary workers like contractors to grow. Organizations hiring in the UK will need to ensure that workers are properly classified to avoid noncompliance penalties.
An employee is a worker who is hired on a permanent basis and is entitled to certain benefits, such as a minimum wage, annual leave, and job protections. An independent contractor is hired for a specific project or for a determined period of time and is not entitled to statutory benefits.
Employers must handle payroll for employees, while contractors are responsible for their own taxes and social security contributions.
Companies should also be familiar with additional classification laws, such as the region’s IR35 legislation.
Flexible Working Bill
The UK’s new Flexible Working Bill is another factor that might impact your HR planning and hiring practices.
Employees in the United Kingdom are now entitled to request flexible working arrangements from day one of a new job, giving employees greater control over where and when they work. Workers can make two statutory requests in a one-year period and no longer have to explain how it will impact business operations.
Employers must respond to each request within two months, and employers can only reject requests for certain reasons, such as incurring additional costs, the inability to reorganize work among existing staff, and more.
UK Employment Laws
An effective strategic workforce planning framework should take the local labour laws into account. Companies who want to hire in the UK must abide by all the rules and regulations to remain compliant and avoid punishments like fines, back pay, or worse.
Employees in the United Kingdom typically have an eight-hour workday and a 40-hour workweek. Overtime pay is not mandated, but an employee’s average pay for the total hours worked cannot fall below the British minimum wage. Employees also must receive a national minimum wage depending on their age.
All workers must have a valid contract of employment, and the terms of the job must clearly be stated. Employers must also abide by the outlined standards in the Employment Rights Act 1996, which stipulates that workers cannot suffer any harm for taking reasonable actions for health and safety. The act also stipulates the requirements for termination.
Companies hiring UK workers will also need to understand the Data Protection Act 2018. The legislation is designed to protect workers’ sensitive personal information and stipulates how personal data can be used by businesses.
For example, all data must be used fairly, for a specific purpose, and limited to only the necessary information.
Benefits
In addition to British employment laws, your HR plan should also account for and provide all the benefits UK workers are entitled to.
Factoring in the costs of hiring in the UK can ensure you develop an optimal business strategy. Companies that fail to provide the necessary benefits may face legal action.
Statutory benefits in the United Kingdom include:
- Paid time off (PTO): Full-time or permanent workers are entitled to up to 28 days of paid vacation time per year. Part-time workers are entitled to at least 5.6 weeks’ paid holiday prorated for the amount of hours worked.
- Parental leave: New mothers can take up to 52 weeks total for maternity leave and must take at least two weeks off after birth. New fathers can take one or two weeks of paternity leave.
- Sick leave: Workers can take up to 28 weeks of sick leave. Employees must provide proof of illness for extended leaves.
- Pension: Companies hiring in the UK must provide a pension plan to employees over 22 years old. Generally, employers will contribute around 3% of each eligible employee’s paycheck, and the employee will contribute 5%
Companies who want to recruit UK workers will also have to handle payroll taxes.
How to Build a Successful Strategic Workforce Planning Process in the United Kingdom
Developing an effective strategic framework is vital for businesses operating in the UK. Companies with a well-defined plan can identify changing demographics or important skills gaps and use the UK’s highly skilled workforce to meet short and long-term business goals.
The first step is performing in-depth research into the labour market of the United Kingdom, including its demographics, technological shifts, labour supply and demand, workforce costs, and more. By having quality information, your company can make informed decisions when developing a strategy.
An effective HR plan should also take some of the key challenges of hiring in the UK into consideration.
For example, to address the labour shortage in the United Kingdom, companies should consider altering their recruitment strategies by offering additional compensation or benefits to prospective hires. To combat the aging workforce, organizations may choose to place a greater emphasis on training programs for younger employees.
Other practices that appeal to British workers can include offering more flexible working arrangements and finding the right channels for job postings to reach your desired audience.
Business Strategy 101: How Can Borderless Help?
Borderless is an employer of record that makes it simple for you to hire in the United Kingdom.
Your EOR acts as a local entity that allows you to legally recruit skilled workers and takes responsibility for all the complicated necessities of international employment, including enrolling workers in benefits programs, withholding taxes, administering payroll, and more. This can help keep you compliant at each step of the hiring process.
The EOR also offers extensive expertise in the country you want to hire in and can provide guidance about important policy changes, helping you to develop a more effective strategic workforce planning framework.
Borderless is an EOR that offers an extensive range of services that allow you to spend more time and focus on perfecting your business strategy and hiring the right candidates. We can help you compliantly hire skilled workers from over 170 countries around the world. Speak with us today to learn how we can help you grow.
Disclaimer: Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
