appoint procurement ebook winter 2016

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APPOINT

PEOPLE SKILLSWHY THE RELATIONSHIP WITH HR MATTERS

P R O C U R E M E N T

reedglobal.com/procurement

WINTER 2016

Welcome

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Procurement’s rise as a strategic partner has been aided by effective

relationships. Yet procurement and HR functions don’t always see eye to

eye. Both operate in challenging environments with budgetary pressures

and so mutual respect, understanding and collaboration are essential.

A healthier relationship will also help professionals gain visibility of their

supply chains, increasingly important since the Modern Slavery Act

came into law.

Whether with suppliers, internal stakeholders or within the function itself,

successful relationships form the lifeblood of effective procurement.

WELCOME

Winter 2016

Effective relationships are vital

Inside this issue

3 Need to know The top 10 causes of supply chain disruption.

6 Day in the life Joanne Tracey, senior procurement engineer at BAE Systems, who is working on the F-35 fighter jet

8 Balancing act Procurement qualifications – how to manage full-time work and diligent study

12 Power to the People Procurement’s working relationship with HR is often fraught, but when the pair join forces, organisations can discover new levels of e�ciency and service delivery

15 Top tips Procurement and HR can work together successfully for the benefit of the organisation. We o�er top tips on how this can be achieved.

Joanne Tracey, senior procurement engineer

is working on the F-35

REEDREEDGLOBAL.COM

PUBLISHERSRedactive Publishing Ltd17 Britton Street, London EC1M 5TP020 7880 6200www.redactive.co.uk

Editor: Anna Scott Art editor: Nicola Skowronek Senior picture editor: Claire Echavarry Account manager: Caroline McLoughlin

NEWS & VIEWS

FEATURES

CONTACT

PROFESSIONAL

Winter 2016 | reedglobal.com/procurement

INFOGRAPHIC

Best performing procurement companies

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p3Need to know

Change management: an organised approach to transforming procurement, via changes to people’s roles and behaviour, processes and technology

29%of supply chain processes are deficient

5%

$1.25m The amount (in US$) in financial benefits per procurement employee that is generated by top performing procurement organisations

7.5 timesmore procurement cost and investment is generated by top-performing procurement organisations

“It is a bad procurement policy that unilaterally locks itself into one set of technologies.” Thomas A Schatz, president, Citizens Against Government Waste

“Procurement faces a transformational period, similar to other corporate disciplines over the past 30 years. Beginning with manufacturing in the 1980s and moving on to supply chains, research, engineering, and more recently sales and marketing, the mission for procurement organisations is underway – whether it is ready or not.” Joe Raudabaugh, partner, AT Kearney

“The growing interest and popularity of the value-from-procurement topic continues to shape the conversations and forums serving the profession. This is not a disruptive force, but a welcomed constructive change that challenges us all to ‘raise our game’ in terms of productivity and results.” Thomas W Derry, CEO, Institute for Supply Management

Soundbites

Top 10 causes of supply chain disruption1. Unplanned IT and

telecommunications outages

2. Cyber attacks and data breaches

3. Adverse weather

4. Transport network disruptions

5. Loss of talent/skills

6. Outsourcer failure

7. New laws or regulations

8. Product quality incidents

9. Business ethics incidents

10. Lack of credit

Top five consequences of disruption1. Loss of productivity

2. Customer complaints

3. Increased cost of working

4. Loss of revenue

5. Impaired service outcomes

of supply chain processes achieve ‘mastery’ – best-practice performance


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Legal update

Slavery is no thing of the past with millions of people being exploited. Recent UK legislation means supply chains can no longer turn a blind eye

�e Modern Slavery Act 2015

The practice of modern slavery may seem far-removed from the operations procurement

professionals undertake in their roles every day of the week, but UK legislation passed in March 2015 means the profession must be on top of the issue.

One of the first laws of its kind – and the first in Europe – the Modern Slavery Act, requires companies to publish an annual

statement on slavery and human tra�cking.

Such practices may take place thousands of miles away from an organisation’s major operations, but can have a major e�ect on brand and profit. For example, Nestle uncovered forced labour occurring in its seafood supply chain in Thailand, and has now published a plan to deal with it.

In these instances, supply chain and procurement professionals will come under

Q&A

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p5Legal update

the spotlight, particularly in organisations that take on a lot of temporary labour or have multiple, global supply chains.

So, having a firm grasp of the law’s implications is essential.

What is modern slavery? A person holding another person in slavery or servitude or forcing them to perform compulsory labour, and knowing this is what they are doing. This includes children or vulnerable people, and using threats or deception.

What is human tra�cking? A person arranging or facilitating the travel of another person with a view to them being exploited, whether the person has consented to the travel or not.

What does this look like in practice?Among the tell-tale signs of modern slavery are the following: Charging workers excessive

or illegal recruitment fees; Misinforming workers about the terms of their contract;

Not providing an understandable, legally compliant contract;

Illegal wage deductions; Excessive overtime; and Di�culty exiting ‘contracts’.

Who is covered? The home operations and entire supply chain of all companies with business or part of a business in the UK, that turnover more than £36 million a year.

What do companies need to do to comply with the legislation? Publish an annual slavery and human tra�cking statement which outlines how their procurement processes avoid modern slavery or human tra�cking practices across their supply chain. If companies do nothing to address modern slavery and human tra�cking, they must also publish this as part of their annual statement.

What does this mean in practice? Taking steps to improve visibility

of the entire supply chain and the routes that products and services make to market, implementing a procurement process – clear to current and potential suppliers – that supply chains will be monitored and any abuses reported and punished, and publishing a statement to this fact, signed o� by the company’s leadership, on the homepage of its website.

What are the punishments? Prison sentences and fines for those carrying out modern slavery or human tra�cking.

Company directors can be criminally liable under the Companies Act 2006 if they sign o� misleading information in their annual reports, including information about modern slavery. If companies state that they don’t have procedures in place to tackle slavery and human tra�cking they may be susceptible to negative publicity and consequent ramifications.

£150bntotal annual illegal profits

generated by forced labour

14.2m number of victims of

forced labour exploitations in economic activities

Domestic work, agriculture, construction, manufacturing and entertainment are the sectors most concerned by

forced labour

Sources: International Labour Orgaisation and Sedex Global


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p6Professional practice

Joanne Tracey is a senior procurement engineer for BAE Systems in its Military Air and Information team, working on the F-35 fighter jet and managing two Canadian suppliers

‘Don’t be afraid to make mistakes’

C VJoanne Tracey

April 2013 Senior procurement engineer, BAE Systems MAI - F-35 international industrial participation team

August 2011 – April 2013 Procurement engineer, BAE Systems MAI – F-35 supply chain strategic transportation and logistics team

Sept 2009 – August 2011 Procurement graduate roles at BAE Systems, working across the MAI Graduate Development Framework

July 2007 – August 2008 Project support professional (industrial placement gap year at university), BT Global Services

A DAY IN THE L IFE

BAE Systems Operations is a leading organisation in defence, security and aerospace,

with operations in the UK and globally.

I work within the Military Air and Information (MAI) business of the organisation, which is responsible for the design, manufacturing, upgrade and support of combat and trainer aircraft for customers around

the world. It also supplies electronic equipment across a range of military and commercial aircraft, as well as looking into the development of next-generation unmanned air systems.

Our customers include the Royal Air Force, Royal Saudi Air Force, US Navy and Indian Air Force. Some of our major programmes have included the Eurofighter Typhoon, F-35 Lightning II, Hawk, Goshawk,

Harrier and Nimrod MRA4 aircraft.

I work within the F-35 international industrial participation team on the F-35 Lightning II programme, managing two strategic suppliers in Canada. There is rarely a ‘typical day’, but there are key activities I am responsible for.

My role requires me to be heavily involved in supplier management and development activities, such as annual-


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contract bid cycles, requests for pricing, negotiations, contract formation and agreement and reporting supplier metrics, while also supporting rate readiness and a�ordability targets across the programme. This is alongside the daily procurement activities, such as raising purchase orders, cash forecasting, overseeing invoice payments and ensuring scheduled deliveries are met.

I have learned it is important to ask for support when it is needed and not to be afraid to make mistakes. It’s only from gaining this support and asking the ‘simple questions’ that I have been able to develop both personally and professionally.

I am a perfectionist so it took some time to accept that it’s ok to go wrong sometimes, but by doing so I’ve been able to push myself outside my comfort zone, and am now able to share my experiences and learning with others whom I’m now responsible for coaching and managing.

The best thing about my job

is the range and diversity of people I get to work with, both internally and externally. Working with international suppliers gives me the opportunity to liaise with, and manage, people from a range of backgrounds and cultures. This exposure to international business brings varying levels of experience, knowledge and ‘ways of doing business’, which adds to the interest and challenges involved in my role.

The aspect I like least is not having full control over the end result. Being in a multifunctional team means that elements of the job are taken out of my hands, and I can become reliant on other people and dependent

on their responsiveness and e�ectiveness.

In another life, my ideal job would be in events planning and management. I really enjoy the preparation, planning and facilitation of large-scale corporate and commercial events.

I think it would fit well with my outgoing personality, passion to deliver excellent customer service and ability to manage multiple stakeholders within tight time constraints.

But I thoroughly enjoy the work that I do for BAE Systems, and am driven by having autonomy and responsibility to manage my own workload and priorities.

“It is important to ask for support when it is needed. It’s only from asking the ‘simple questions’ that I have been able to develop both personally and professionally.”


p8Qualifications

8 Winter 2016 | reedglobal.com/procurement

In July 2015, the United Nations Development Programme lent its support to the creation of a professional licence for procurement, advocated by the UK's Chartered Institute of Procurement and Supply (CIPS).

Such a licence would mean procurement processes in organisations must be carried out only by a professionally qualified practitioner, who is held accountable – just as solicitors are – to formalised standards of practice and ethics.

If such a licence were adopted, formal professional procurement qualifications would be mandatory for procurement professionals to undertake.

Professional procurement qualifications – whether from CIPS in the UK, the Institute for Supply Management in the US or one of the other professional organisations for procurement around the world – have been important for

decades, but their significance is now growing. A licence to operate will make them essential for a procurement career.

As procurement management consultant and trainer Ian Tait says: “As CIPS goes further along the rigorous licensed and chartered professional route, such studies and qualifications will become even more important.”

Some countries already have licences. In Zambia for example, professionals cannot take a job in the public sector without them.

“There’s also been a push by the Cabinet O�ce for UK government procurement professionals to be qualified,” says Alan Oxenbury, a procurement trainer.

“Currently, it depends on the employers’ point of view whether their procurement sta� are qualified. But an increasing number of job adverts have the words ‘Must have CIPS, or be studying for CIPS,’ on them now,” he adds.

�e growing importance of procurement qualifications

BalancingAct

p9Qualifications

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Balancing study and full-time work

Students typically undertake procurement qualifications while working full time, whether they pay for them themselves or

their employer picks up the bill.Balancing work, study and leisure

is a challenge. “The demands of studying while working full time

are huge,” says marketing and management lecturer Ann Third. “Particularly for those with a young family.”

Procurement trainer Alan Oxenbury agrees that balancing work, study and home life is tough. “Students say to me that the di�culty is getting time to study when they get home,” he says.


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p10Qualifications


Support from family and friends is vital, and employers play an enormous role in helping sta� members undertake their qualifications. “Allowing sta� time o� work, during the working day, to attend classes would be very helpful,” says Third. “And they must ensure sta� are not obliged to work longer hours than contracted, especially in the run-up to exams.”

Of course, it depends on the employer.

“Some employers regard training as non-essential,” says Oxenbury. “Employees may have to pay for it themselves, and it works out at between £5,000 and £6,000 per year.”

“Generally, the public sector is better at this,” he adds. “Employees may get studying costs paid for, even paid time o� for exams.”

Whatever support professionals get from their employers, it is important for them to get their approach to study right at the beginning of the process. Third says: “Procurement professionals should realise the implications of failing an exam – both in terms of time and money – and ensure they pass everything first time.”

“Successful students are often those who are able to find an hour a day to shut o� the outside world and get into the habit of regular study. If someone undertakes study and is unable to plan time in a busy life to do the ‘out of class’ work, they will find it di�cult to be successful,” she adds.

While the qualifications are important in themselves, procurement management consultant and trainer Ian Tait says: “It’s the mixing with others to discuss relevant topics – the examples people pick up in class and the stories from the tutors –that provide so much for procurement professionals. Even those who don’t fully qualify can benefit from learning.”

“Successful students are often those who are able to find an hour a day to shut off the outside world and get into the habit of regular study.”

p11Qualifications

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Naomi Kinyanjui is business development lead at Welcare Health Services and was awarded the

CIPS Professional Diploma in Procurement and Supply in 2015.

“Procurement qualifications are very important and many jobs require them, especially if you are working abroad. If you don’t keep up with what is current, you may be left behind.

A few years ago people could get away with having experience and possibly a degree only, but even those with experience are now having to take professional qualifications to remain relevant in the market.

For me, the major challenges of working and studying were getting the time to study and balancing the rest of my life with study. It did get hectic. Work demands

can at times make you feel tired mentally and physically. But I decided it wouldn’t kill me to do an extra hour’s study to be better prepared. It was about making a decision to do the study, then planning to make it happen.

I found it easier to read immediately after I got home from work, before I started doing anything else. On Mondays to Fridays I would read for one hour after work and then push it a bit more on the weekends because I had more time. But weekends can be tough – you want to do anything except study!

The best advice I can give is to use a timetable in the working week and stick to it. There are many gaps in the day you can dedicate to study, whether mornings, afternoons or evenings work best for your schedule. When you do it for one week you will get the momentum going. Study and full-time work is not impossible. It all depends on if you are ready to make that commitment.”

A graduate’s view


Top tips for juggling study and full-time work

Examine your life and plan time for study before you start

Stick to the plan. Don’t try and qualify too quickly – you might be able to get the qualification in one year, but the best advice is to do it in three

But do set a realistic target for achieving the qualification

Study little and often

Set a habit of regular study and plan your time – for example on a long train commute

Don’t answer emails during study time – it gives the impression you are always available

Tell your boss and your team that you are taking time out to study and won’t be contactable

Don’t skip your whole lunch break at work to study

Find a study partner

Get away from the o�ce to study

Put your social life on hold in the two to three weeks before an exam

p12HR’s perspective

Power to the peopleProcurement’s working relationship with HR is often fraught, but when the pair join forces, organisations can discover new levels of efficiency and service delivery

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Managing internal stakeholder relationships is fast becoming an essential skill

for the savvy procurement professional. Interactions with HR functions are no longer limited to joining and leaving organisations, training programmes and appraisals.

Instead, HR services are now regularly purchased with sourcing and procurement departments used as an intermediary.

Procurement and HR professionals can reap rich rewards when working together e�ectively. “The two teams will discover the levels of e�ciency and e�ective service delivery they can jointly bring to their organisations,” says interim HR director Graham White.

Yet White, who has had public and private sector experience, says: “For every strong procurement and HR partnership, there are four where the two seem alienated

from any concept of working together.”

So how do procurement functions need to operate to ensure their working relationships with HR departments are the best they can be? We asked three senior HR professionals.

Graham White, interim HR director, previously HR director, Brighton & Sussex University

Hospitals NHS TrustProcurement and HR should have the same goals and objectives – the success of their organisation. The only di�erence will be the tools and techniques used. Even in this area, there is a very strong interconnection of methodologies, especially when providing good advice, supportive governance and user-friendly policies for sta�.

Successful HR and procurement teams should have a unified set of goals to create a focused and committed workforce.

The greatest cost to modern organisations is their human capital. If organisations are going to better manage today’s more complex workforce, then procurement has to become part of the people processes that for too long were seen as ‘soft’ or ‘woolly’. Procurement needs to sit down with HR as an equal partner, collaborating on more than just the process of procuring sta� and resources. Procurement needs to embrace the philosophy that it is not only how companies resource and train their sta� that matters; it is how they treat them afterwards that will determine their contribution.

Building a firm foundation of mutual understanding and recognition of each other’s professional expertise will help. They must speak the same language – plain English – and they must work in partnership.

This is not a takeover bid by either the procurement or HR function, but a strategic partnership in which both sides

needs to become less precious and more pragmatic about each other’s ideas and suggestions.

Gillian Quinton, managing director – Business Enterprise & Shared Services, Buckinghamshire County Council

The relationship between procurement and HR is developing into an e�ective business partnership. As markets mature and the relationship grows, new ways to innovate


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and provide value for the organisation are being identified, which bring the functions closer together.

Their goals should be completely aligned – how additional value can be achieved from delivery of services. HR is under pressure to reduce costs and deliver more. A strong relationship with procurement can identify innovative ways to deliver these goals.

The ‘rules’ of procurement can often be seen as barriers to the rest of the organisation.

The real trick of strong procurement professionals is to present options in terms of how they can help meet business needs, rather than a list of rules that must be followed.

Procurement can also embed more commercially minded thinking across the HR function, while HR has a responsibility to ensure it understands the role of procurement, and that expertise is sought at the earliest opportunity.

In the past, procurement

was seen as a narrow support function whose remit was to advise on and carry out tendering processes. It has now developed into a broader, more strategic and business-critical service that can provide more e�cient services and cost savings from a large and complex supply chain.

Procurement can add even greater value than it does already by ensuring it understands the needs of the business, building strong relationships with HR, reviewing categories of spend to identify ways in which more value can be driven, and helping to shape the market in accordance with organisations’ needs.

Steve Rowe, general manager – human capital, Laing O’RourkeProcurement and HR do not work together as e�ectively as they should,

particularly in larger

organisations. In a past life, working for a large global company, I identified up to $40 million (£26.4 million) of cost savings, simply from HR working with procurement to reduce the number of suppliers and supplier rates for external recruitment.

In this example, the company wasn’t making the most of its employment brand and was paying significant sums to suppliers, often for a sub-optimal service.

The two functions’ goals should not di�er. Typically, recruitment services are the biggest area of opportunity for savings to be made by procurement and HR working together, and there is always a balance to be drawn between cost and quality of service.

In the recruitment game, as with other services to the HR function – for example, in training and education – cost will always be a key criteria, but never the only criteria. The functional goals should

therefore converge around delivering best value.

The relationship can be improved by the development of a proactive relationship between the professionals who head up each function. They must ensure clear alignment of functional goals, and must work together through areas of potential conflict – for example, the battle between cost versus quality. Procurement and HR heads of department should communicate with one another with the aim of providing the outcome which is best for the business.

Specifically, HR needs good data from procurement, as well as an understanding of HR’s criteria for supplier selection and engagement.

For procurement functions to ensure they are meeting HR’s requirements they must engage in regular dialogue with the HR function, particularly when it comes to key metrics and targets.


Collaboration p15

How HR andPROCUREMENT

can worktogether

15 Winter 2016 | reedglobal.com/hr

HR

Respect and value each other’s expertise and

discipline. Push to one side old stereotypes or

assumptions. Both HR and procurement have evolved

and developed, and this should be recognised.

Understand the role each has to play in meeting the organisation’s objectives

R E S P E C T

Involve each other early on in projects – if both teams are involved at the start

they will be able to derive full value from each other’s expertise

I N V O L V E

Embark on projects with an open mind and create a

trust-based relationship

B E W I L L I N G T O C O L L A B O R AT E

Put aside any doubts and embrace your new best

business partner

Fully deploy soft skills, especially listening and good communication. Both teams will have to spend time educating each other: procurement

about what skills, tools and techniques it brings to the table and HR about its subject matter, specialism and

company culture. Be prepared to listen and learn. Frequent communication

is also essential so set up regular meetings to address questions or

doubts

S K I L L S

Accept that you should have the same goal: the organisation’s

success. Find ways to completely align them, for example, by

highlighting how engaged and fully trained sta£ contribute directly to

the organisation’s bottom line

S A M E G O A L S

Find a common language to set objectives, requirements

and manage processes. Explain unfamiliar terms to ensure both

sides fully understand each other

A V O I D J A R G O N Collaborate from the very

beginning of critical sourcing projects. If procurement is involved too late or as an

afterthought it risks missing out on truly innovative

solutions

I N N O V AT E

PROCUREMENT

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A smooth working relationship between HR and procurement can be a powerful force for business, ensuring HR spend and projects deliver on value and innovation. As our procurement experts reveal, effective collaboration brings massive rewards

Breaking the ice

Procurement’s perspective p16


p17Procurement’s perspective

What has procurement ever done for you? There are many examples of a strategic collaborative relationship between HR

and procurement teams in industry that result in genuinely innovative, value-adding HR solutions being implemented across the business. However, in other organisations, the relationship remains tense, stemming from a mutual lack of understanding and appreciation of each other’s role, objectives and position.

With HR spend running into the tens of millions of pounds, a collaborative relationship is crucial if both teams are committed to creating real value for their organisation, and contributing to its profitability and sustainability.

So what does procurement require from HR in order to foster good working relations and unlock their joint potential? We ask three leading procurement professionals.

Gerard Chick, chief knowledge o�cer, Optimum Procurement GroupIn today’s climate, no part of the business should be siloed. If it is, it means it remains incredibly ine�cient and detached because it doesn’t result in

communities of practice. One tension in the HR relationship is that

everyone thinks they can buy. However, not everyone can procure – and there is a professional di�erence. Procurement includes creating value for money. It’s not just about cost, it’s also about satisfaction.

Modern procurement has evolved and involves analysis, understanding the market and understanding the category. It’s no longer just about getting the best price.

If animosity exists between the two departments it is important to get to the root of it. If you have a football team where players don’t understand their place on the field, or what other players are trying to do, it results in a horde of people following the ball, rather than playing a strategic and tactical game.

The same applies to business. Teams have

to look beyond their own specific tasks and targets, but work together to make the business more sustainable. HR needs to be willing to work with procurement to develop a clear understanding of procurement’s expertise, so it can better develop the relationship with suppliers.

Brian Phipp, procurement consultant, HR and professional services director at Sourcefield Consulting With HR being a specialist area, there can be the belief that procurement can’t get to

grips with the subject matter and therefore can’t help build a solution that addresses the problem. There can also be a reluctance to share strategy.

To create a collaborative relationship we have to demonstrate our understanding of HR categories, or take the time to learn about them.

We have to understand why some people may be reluctant to engage. It may be because they experienced problems with procurement in the past, in which case it’s important to find out what went wrong and

“Crucially, HR needs to involve procurement at the strategy stage, rather than when we are just needed to negotiate the price.”

Welcome


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why, and then explain how the relationship will be di�erent going forward and what benefit we can bring.

The listening part is crucial, then providing options rather than railroading HR into a generic procurement process.

And what do we need from HR people? They need to articulate their business needs and the environment they operate in (both the parameters and constraints). HR also needs an understanding of the goals and objectives of the project in hand, to be prepared to invest time in the process, and be committed to working with procurement.

Sometimes I’ve had to go to market knowing only half the requirement because there hasn’t been clarity on what is needed. Or there may have been unrealistic timescales, so leaving enough time for a robust process is also needed.

HR also needs to bring commercial acumen to the table. It can cause problems when someone communicates a piece of information to suppliers that lowers the company’s procurement leverage position.

Crucially, HR needs to involve procurement at the strategy stage rather than when a supplier has already been selected and we are just needed to negotiate the price. Last, but not least,

keeping an open mind is vital because procurement can o�er a di�erent perspective and get HR to think about alternatives. For me, this is a creative process and about keeping solutions fresh and up to date.

David Loseby, group procurement director, ArrivaThe relationship between HR and procurement works best when procurement takes the approach of: ‘How can we help?’ and ‘How can we understand

what you are trying to achieve?’ rather than aiming to take control of the process.

This acknowledges that procurement realises it comes from a di�erent place and is seeking to open things up by being non-confrontational and non-threatening. Procurement may have all its professional tools and techniques, but attitude and behaviours are just as important.

My involvement in HR spend has always been a joint e�ort. The focus has been an open discussion about what we were trying to achieve, looking at the targets

and objectives the executive board set for both procurement and HR, looking for mutual ground, quick wins and longer-term benefits.

This empowers HR, but also it allows teams to think more innovatively, delivering the same outcome, but in a way that has added benefits. Building trust in the first place will mean HR is open to that.

To make this a genuine partnership approach, HR must be open to a dialogue about roles and responsibilities and who is delivering what, so we can carefully craft a ‘charter’ that is relevant to the specific circumstances, both the people and the organisation. E�ective procurement can be collaborative, strategic and add value. HR should embrace that partnership as it can also be very enjoyable working together, which is a real measure of success.



A DAY IN THE L IFE

T rinity is a 135-strong company providing o�shore hotel and housekeeping services to oil and gas

companies all over the world. We supply chefs, catering, cleaning and laundry services to o�shore installations.

I am the HR person and have a logistics assistant and operations team working with me. I also sit on the company’s

main board, plus our Norwegian subsidiary. My position shows how highly HR is thought of here that it is elevated to a boardroom-level role.

Day-to-day I work with colleagues and clients, touching on all parts of the business. Every day is unpredictable. I deal with all manner of calls from o�shore unit managers that can be based anywhere in the world, asking about people

management issues. As I can’t just jump in a helicopter to help them deal with their queries, I have to be able to support them and give them the tools to help them via email or telephone.

I have always been encouraged to get to know my o�shore colleagues and because of that I can o�er a good level of support. Interacting and engaging with colleagues is what I really enjoy about this role.

Rachel O’Donnell is HR director and board member at Trinity International Services in Aberdeen. She explains why cutting her teeth in the retail sector stood her in good stead for her current role

‘I get involved with the business at large’

C VRachel O’Donnell June 2015 HR director, Trinity International Services

December 2013 HR manager, Trinity International Services

April 2009 – December 2013 HR manager, Morrisons

January 2005 – April 2009 Store personnel manager, Sainsbury’s

September 1988 – January 2005 Started on the shop floor, then held a number of roles before progressing to deputy manager at Morrisons

Welcome


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Being in an international company is a challenge since I don’t know what I’m going to be asked to look at next or update in terms of international regulations. Norwegian law is particularly complex!

But, unusually for HR, I also get involved with the business at large and operational matters such as business development or tenders. This gives me a wider insight and helps me understand the business better, which is a great opportunity to keep learning.

The falling oil price means people in the industry are feeling insecure about the sector. Twelve months ago we were worrying about getting the right skills, but now there is almost a surplus of competent sta�. So we have to work e�ciently and ensure that our colleagues are trained to maintain the high standards of service our clients expect.

Keeping up morale and motivation is also important through good communication and continuing to invest in career development training. We have also embarked on the Healthy Working Lives Award Programme, a Scottish scheme to develop health programmes in organisations. We are hoping to achieve the Bronze award in January, showing how seriously we take the issue of sta� wellbeing.

My background was in retail. I started at the age of 16 on the delicatessen counter then worked my way up at Sainsbury’s, then Morrisons. In retail you are exposed to all sorts of experiences so it really is a solid grounding. You deal with interviews, inductions, payroll, recruitment, planning for your labour budget – all frontline areas.

I had no o�shore experience when I moved here which I thought would be di�cult, but the transition was not as hard as I anticipated because of the breadth of knowledge gained in retail and the positive support I have received within Trinity.

I started at Trinity International Services initially as HR manager, I was promoted to HR director and took my seat on the board earlier this year. Having a board position was daunting initially. Now I think I have influence and my colleagues respect my recommendations. If I don’t understand something or think something is not right I will speak out.

I am passionate when it comes to HR,

I enjoy what I do because I believe I make a di�erence and my e�orts are appreciated. “Having a board position was

daunting initially. Now I think I have influence and my colleagues respect my recommendations.”


p21Education in training

�e ApprenticeAmbitious plans for expanding

the apprenticeship scheme over the next four years are

afoot. Does this signal a bleak future for classroom-based

vocational training?



The past six years have seen a major push to bring an end to vocational training’s status as the ‘poor cousin’ of the university sector. The government has

emphasised the role it wants it to play in the UK’s long-term economic growth and productivity by delivering the skills employers are seeking.

More recently, there has been a shift in how ministers want it delivered, with a decisive move towards on-the-job training.

Apprenticeships have become the centrepiece of that shift and it’s a large-scale change. Three million will be created by 2020, ministers have pledged, with public sector bodies to be set targets to help attain that goal, and a legal move announced that will recognise apprenticeships as a career path equal to university degrees. This target is to be funded by large employers in a bid to clamp down on organisations that “leave training to others”, said Chancellor George Osborne.

The apprenticeship levy comes into e�ect in April 2017 and will be payable by the largest employers in the UK at 0.5 per cent of their pay bill.

Apprenticeships, open to those over 16, are now available in more than 170 industries covering 1,500 job roles, and within organisations of all sizes. They are

paid jobs (paying at least the national minimum apprenticeship wage) with the bulk of the training delivered on the job and the rest through a training organisation, college or e-learning.

What are the main benefits? For the apprentices themselves they o�er an opportunity to learn sector-specific skills, a�ording them improved long-term salary

prospects as well as scope for career progression. They also help young people better understand the world of work.

On a wider level, research has shown they are having a tangible economic impact.

The Association of Accounting Technicians commissioned a report from the Centre for Economics and Business Research in 2014 that found that apprentices delivered around £1.8 billion of net benefits to organisations in the UK in 2012/13.

The report The value of apprentices also highlighted that 72 per cent of businesses surveyed for the Department for Business, Innovation and Skills (BIS) stated that apprentices had improved product and service quality, while 68 per cent said that apprentices had improved productivity.

“Hiring apprentices has also often brought additional benefits, such as improved sta� morale, sta� retention and organisational reputation,” the report stated.

Barry Norris, people director at Mitie, the facilities management company, says investing in apprentices brings clear benefits for the company in terms of raising the skills base and employee retention rates. Mitie currently has 2,000 people participating in 39 apprenticeship frameworks from plumbing to carpentry to facilities services – and at di�erent levels

“�ere is the possibility of falling foul of quality in order to get to quantity.”



72 per cent of businesses surveyed for BIS stated that apprentices had improved product and service quality

rising up to level four or five qualifications. Completion rates there exceed 95 per cent.

Norris says: “Four years after completion there is around 70 per cent retention. Within two years of completing a facilities-related programme more than 50 per cent move on to a supervisory or managerial role within the company. Similarly, within technical apprenticeships an overwhelming number that complete the programme are still with us four years later. This is despite the market for skilled tradesmen being extremely competitive.”

New schemes are developing and evolving all the time to tackle specific skills shortages or aid economic growth. Degree Apprenticeships were rolled out last September, combining traditional academic study from a university degree and vocational training on the job. Apprentices gain a full university bachelor’s or master’s degree while earning a wage.

One such programme is the Chartered Manager Degree Apprenticeship, launched to plug the critical shortage of qualified managers. Barclays, Nestlé and Serco have been among the first employers to o�er the scheme, developed by a group of 40 employers and universities, and supported by the Chartered Management Institute.

The programme aims to meet a lack of

management expertise identified by The Commission on the Future of Management and Leadership (a body that includes cross-party representation and business leaders) as a factor that could hamper economic growth if not addressed. One million new managers are needed by the UK labour market by 2020, the commission said last year.

The four-year course open to school leavers and non-graduate existing managers will lead to a degree and Chartered Manager status.

It’s di�cult to argue against the expansion of the apprenticeship scheme, says Norris, given the contribution they make to the wider economy. Though it’s essential they remain a quality o�ering, he adds. This is a key point. There have been doubts raised as to whether the quality and standards of apprenticeships can be retained in trying to meet such sti� expansion targets, threatening the standard of vocational training overall.

As such, the National Audit O�ce has

launched an investigation into how BIS is handling its drive towards three million apprenticeships, and how it is ensuring the scheme remains high quality and can continue to “meet the needs of businesses, employees and the wider economy”. It will publish its report this Spring.

“It is a challenging high-volume target,” says Teresa Frith, senior skills policy manager at the Association of Colleges. “While there are clear benefits, it poses a serious potential threat to the quality of the o�ering. There is the possibility of falling foul of quality in order to get quantity.”

Employer groups known as ‘trailblazers’ are currently developing new standards for all apprenticeships, explains Norris. “By 2017 all existing frameworks will be rewritten and replaced by these new standards, which will help retain and enhance the quality of schemes.”

However, he says there are inconsistencies when it comes to the training element of an apprenticeship delivered by a college or private sector organisation.

“All of our apprenticeships at Mitie are provided by external providers, either colleges or private sector organisations and the biggest threat to the quality of apprenticeships, in my view, comes from the



Professional status

Progression

GC

SEs,

A-l

evel

s, w

ork

Source: National Apprenticeship Service

Plus knowledge and employability skills

Degree apprenticeships (levels 6 & 7 – full bachelor’s or

master’s degree)

Higher apprenticeships (levels 4, 5, 6 & 7 – equivalent to a foundation

degree and above)

Advanced apprenticeship (level 3 – equivalent to 2 A-Levels)

Intermediate apprenticeship (level 2 – equivalent to 5 GCSEs A*-C)

Traineeships (English and maths qualifications and up to six months’

work experience)

quality of those providers. There can be huge variation – some are very good, some are very poor.

“At Mitie, we audit the quality of the work carried out by our external training providers extensively. I’d like to know what measures the government will put in place to make sure all companies deliver good quality training. And how will it ensure providers of apprenticeships are maintaining high standards?”

Quality aside, the growth of apprenticeships is re-shaping vocational training. Further education (FE) colleges that o�er apprenticeships also deliver vocation-based training or courses that are more classroom-led. Currently, 773,000 16-18 year-olds study at FE colleges. Around 1.7 million adults also study or train there.

Government policy is undeniably starting to change the bias of the entire 16-plus o�er towards becoming more work-oriented and moving away from traditional classroom-based provision, says Frith.

“It is part of a bigger move that questions whether the mix of full-time higher education is right, how we are preparing our 16-18 year olds for work and the training they receive and what that training should look like?” she adds.

“For example, a government may


p25Education and training

question whether a group of students participating in A-level equivalent vocational training might be better o� on an apprenticeship, rather than being in a classroom.”

She adds: “The government is galvanising policy into a single direction to meet this challenging target, which is creating greater cohesion across all the departments. From that perspective the target is a real positive.

“Colleges will need to adapt their o�er to grasp more of the apprenticeship market. It’s not a negative thing, it’s just change, but it o�ers great opportunities.”

What is the value of a broader o�ering of vocational training? Frith explains: “A classroom environment supports students not ready to go to work. Not everybody comes out of school ready to go straight into a job. There may be behavioural issues, academic issues, or skill and knowledge issues that need resolving first.

“FE has always taken a strong, clear and central role in helping people make that transition so they are ready to progress into sustainable work and not just get caught up in a short-term job cycle. The classroom still has a place in the apprenticeship o�er.”

Delivering this kind of vocational training is becoming more challenging though. The adult skills budget saw a cut of 28 per cent last year and it was a surprise the Autumn

Spending Review didn’t bring further decreases. Frith admits it leaves little room to deliver non-apprenticeship based training.

Ultimately, although policy may be changing, what makes a plumber or electrician competent today will be the same tomorrow, she adds. “What’s changing is how we articulate that competency, assess it and fund its training.”


p26

Workplace bullying and ill-treatment in Britain is on the rise, a study has shown.

Research from the Advisory, Conciliation and Arbitration Service (Acas) also highlights that many people are too afraid to speak up about it.

Bullying is any unwanted behaviour that makes someone feel intimidated, degraded, humiliated or o�ended.

Acas’ paper, Seeking Better Solutions: tackling bullying and ill-treatment in Britain’s workplaces, published in November 2015, looked at the latest research on workplace bullying as well as analysed calls to its helpline.

Around 20,000 calls related to bullying and harassment were received over the past year. In extreme cases, callers reported that workplace bullying

Need to know

Workplace bullying costs economy £18 billion

“Bullying is on the rise in Britain and it is more likely to be found in organisations that have poor workplace climates.”

What is the true cost of

bullying to organisations?Sickness absenteeism

Labour turnover

Lower organisational performance and quality of service

Reduced productivity

Industrial action

Reputational damage and loss of public goodwill

Occupational health costs

Loss of organisational resources and management time spent on addressing the problem


p27Need to know

caused them to self-harm or consider suicide.

Other complaints included being shouted at, verbal abuse, physical abuse, being ‘talked down to’ in a humiliating way in front of colleagues, and ostracism.

Acas chair Sir Brendan Barber said businesses should take the problem seriously as the annual economic impact of bullying-related absences, sta� turnover and lost productivity is estimated to be almost £18 billion.

“Our analysis reveals that bullying is on the rise in Britain and it is more likely to be found in organisations that have poor workplace climates where this type of behaviour can become institutionalised.”

Anti-bullying policies are widespread in Britain’s workplaces, but these have fallen short in reducing the overall prevalence of bullying, the report said.

Managers sometimes dismiss it as personality or management-style clashes while others may recognise the problem but lack the confidence or skills to deal with it. In other organisations managers alerted to bullying allegations may simply move sta� around to avoid investigating and dealing with underlying behaviours.

Barber added: “Our study shows that encouraging a positive workplace climate is important as it allows people to have the

confidence to report bullying.”The report highlighted key approaches in

addressing unwanted behaviours: Bullying and ill-treatment being viewed as an organisational problem requiring an organisational response.

An organisation-wide commitment to align behaviours with values centred on respect and wellbeing.

Behavioural standards being developed in collaboration with employees, and role-modelled by senior managers.

Agreed behavioural standards that are regularly promoted, reviewed and updated.

The early identification of bullying behaviours, through informal and formal complaints, surveys, and confidential ‘consequence free’ exit interviews.

Well-resourced and informed support structures to help those being bullied and managers responding to bullying.

Informal resolution being encouraged wherever appropriate. But formal procedures still being in place when early resolution doesn’t work.

Managers having strong people management skills and emotional intelligence.

Managers being aware how easily

management action can cross into, or be perceived as, bullying, accompanied by policies that are consistent, clear and fairly applied.

Acas’ bullying report can be viewed at: bit.ly/Acas_bullying

http://www.acas.org.uk/media/pdf/e/b/Seeking-better-solutions-tackling-bullying-and-ill-treatment-in-Britains-workplaces.pdf


The National Minimum Wage (Amendment) Regulations 2016, still at draft stage, outline the new compulsory national minimum hourly wage rates as:

£7.20 for a worker aged 25 and over

£6.70 for a worker who is aged 21 or over (but under 25) £5.30 for a worker who is aged 18 or over (but under 21 ) £3.87 for a worker who is aged under 18 £3.30 for an apprentice

Need to know p28

Employers’ bills set to be hit hard by National Living Wage

The introduction of the National Living Wage (NLW) from 1 April 2016 will set businesses back by more than £1 billion, an independent government advisory body has predicted.

A total of 1.7 million employees in the private sector are estimated to be a�ected by the new minimum, which will be paid at a starting rate of £7.20 an hour to all those aged over 25 years.

The Regulatory Policy Committee said the move would mean £804 million in direct labour costs (£672 million in wages and £132 million in costs such as national insurance). But there will also be a “wage spillover” of £234 million, as employers will also have to increase wages for employees earning above £7.20 an hour to maintain wage di�erentials.

Transition costs will reach £22.6 million, taking into account the time it will take

“�e higher wage will have an impact on the wage bill of 79 per cent of retailers and 77 per cent of hospitality employers.”


p29Need to know

National Living Wage (NLW) in numbers

28%

15%of employers plan to raise prices to manage the higher costs of the NLW

of employers think that cuts to corporation tax and national insurance will o¦set at least some of the extra wage costs

2.8m

Source: CIPD/Resolution Foundation

senior managers to read the NLW guidance and administrators to update payroll records of all employees a�ected.

This assessment doesn’t take into account the cost of future rises to the NLW, which should reach £9 by 2020.

The NLW is separate to the Voluntary Living Wage, which is set at £8.25 per hour and £9.40 an hour in London.

Research from the CIPD and the Resolution Foundation showed that employers in the retail and hospitality sectors are set to be hit hardest.

The higher wage will have an impact on the wage bill in 79 per cent of retailers and 77 per cent of hospitality employers, a survey on how low-paying sectors will adapt to the NLW revealed.

The survey of 1,037 employers also asked respondents for their three top responses in managing the NLW. They reported they would most likely improve e�ciency and productivity, take lower profits/absorb costs and reduce overtime and bonuses.

The estimated number of workers that will directly get a pay rise as a result of the NLW by 2020

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