A new analysis of FTSE 100 annual reports finds that while workforce reporting has improved in the past two years, the quantity and quality of disclosures still varies significantly and remains very poor in places.
The new report, How do companies report on their ‘most important asset’?, from the CIPD, the PLSA and Railpen, analysed the quality of workforce disclosures in the 2021 annual reports of FTSE 100 companies against seven key themes:
- Workforce cost and composition
- Employee relations and well-being
- Reward
- Voice
- Skills
- Capabilities and recruitment
- Response to COVID-19
It found that most of the FTSE 100 covered these seven key themes in their narrative to some extent, but the quality of reporting was generally low and the use of data to evidence comments was ad-hoc.
In response to the findings, the three organisations are urging employers to provide greater transparency over how they recruit, invest in and manage their workforce. They are also calling on key parties – such as the Financial Reporting Council, investors and representative business groups – to come together to agree on a baseline framework for workforce reporting. This would help improve the consistency and quality of company disclosures on key people issues that are central to efforts to create more inclusive and productive organisational cultures and working practices.
Inclusion/make-up of the workforce
While 93% of companies provide evidence of investment in inclusion and diversity, only one in five (22%) FTSE 100 employers reported the ethnic breakdown of their workforce, up from just 10% in 2019.
Nine companies disclosed their ethnicity pay gap, up from three in 2019. Just 6% of firms provide information on the cost of their contingent, non-permanent workforce.
Skills and training
Almost all companies (97%) mention investment in skills or training, but only a few provided concrete evidence of this. Only 37% reported their number of apprenticeships and internships, 35% disclosed hours of training and 16% disclosed the cost of training. Only 11% provided data on their internal hire rates, an important indicator of how well companies train and develop staff.
Reward
Overall, there is a lack of reporting on pay and reward beyond gender and ethnicity pay gap reporting. Only 15% of employers discussed their pension policy in the people section of their annual report, despite pensions being a key part of the employment offering.
Well-being
Only 13% of annual reports discussed mental well-being in relation to health and safety or risk assessments. This suggests that mental health and well-being is still not treated as seriously as physical well-being and its link to stress, absenteeism, productivity – as well as the importance of supportive workplace cultures – is not widely understood.
Intelligent CXO spoke to three experts about how enterprises can tackle this skill shortage among employees by upskilling, training and retaining talent…
Chris Coward, Head of Project Management at BCS (Business Critical Solutions)
The skills shortage is one of the biggest challenges currently facing the data centre industry. The continued fight for a limited talent pool is set to get worse and there are real concerns that it will impact the sector’s ability to deliver the increasing demand, driven by the pandemic.
The skills shortage in the industry has been an issue for over a decade, with the financial crash in 2008 leading to a lost generation of technical engineers, which has been slow to recover. There have been some promising industry initiatives but many were put on hold due to the pandemic. Last year, ongoing uncertainty around A level results, challenges for first-year university students and a decision by many organisations that taking on graduate trainees and/or apprentices is not practical has effectively put us back to square one. It is now time for businesses to get these schemes back on track or these decisions will severely impact the future.
At BCS we decided to continue our scheme and it is now the fourth year of the programme, which is run in partnership with Southbank University. It is part of our commitment to helping to tackle the issues that are in the engineering and data centre sector. It also enables us to be on the lookout for future data centre professionals and leaders. As part of our long-term growth strategy, the programme this year has been extended to include the following course: BSc (Hons) Construction Project Management. This course enables us to broaden our search and further strengthen the Project Management offering within the business.
Once chosen, the successful students are involved in every aspect of the BCS business, which provides a full range of services solely within the business-critical and technical real estate environments, working across the entire client portfolio supporting and learning from the experienced team. This will include getting to see first-hand hyperscale construction projects from the blueprint stages right through to the delivery and is designed to support any apprenticeship study requirements.
In conclusion, we feel strongly that companies should do their bit to help alleviate the skills shortage. It also makes good business sense for us as we are able to find the best people and teach them the BCS way. We are proud of the success of the apprenticeship programme and those who are accepted can be assured of receiving a rigorous education in construction and engineering that is directly focused on their work.
Dave Birchall, Chief People Officer at Node4
The first – and perhaps most obvious – way that enterprises can tackle the recent skills shortage is through recruitment. A crucial but often overlooked recruitment strategy is to turn to the next generation, rather than those with years of experience. Although these employees won’t add huge value to the business until they are trained up, graduates and apprentices make up a huge proportion of the talent pool, so provide ample opportunities to expand the workforce. This is also extremely valuable to businesses because candidates can be specifically trained to plug any skills gaps within your organisation. Graduate and school career fairs are a great opportunity to meet these potential candidates and inspire them to join the industry. Offering work experience and placement opportunities can also be very valuable in actively engaging the next generation.
The Node4 Academy aims to do this by providing professional development and training opportunities from sales and product knowledge to more general skills, such as time management, prioritisation techniques and public speaking skills. Bringing in homegrown talent is also valuable in terms of retention – another key part of tackling a skills shortage. This is because it builds a sense of loyalty by creating an emotional attachment between employee and employer.
Also key to staff retention, and preventing the skills gap from widening, is providing career progression opportunities. This can occur by introducing pathways that do not automatically progress people upwards into leadership positions but that allows talent to move deeper into their expertise and become specialists in their fields. This ensures that the people with the correct skills don’t move away from the ‘doing’ to the ‘managing’ – losing the required skills and widening the skills gap. It is important that enterprises promote and recognise their employees without taking valuable skills away from essential jobs.
Finally, it is increasingly becoming clear that people want to be a part of something, not just an employee in a business. Therefore, to retain skilled staff, enterprises should have robust employee engagement incentives and offer additional benefits to make their employees feel included in the wider culture of the organisation, but also that they are making a valuable contribution to society. At Node4, we take part in charitable work with the Trussell Trust to make that difference. To demonstrate how we value our employees, we send appreciation gifts to every member of the team and organise reward and recognition programmes to celebrate individual successes. To form and strengthen relationships, we host internal quizzes and competitions, which give our colleagues time to bond outside of the work environment. After all, a happy, diverse and united team is a productive workforce and promoting such perks will attract the skilled and ambitious candidates that everyone is desperately searching for to plug the gap.
Drew Sanford, Vice President, Global Security Operations, ConnectWise
Build a strong culture
Anyone who has worked as part of a unified team that operates with a well understood set of goals will appreciate the value this brings to their role. To achieve this, employers need to ask themselves some tough questions: Does their culture make employees feel valued? Does it help them advance their careers? Does it help them feel like they’re a part of something important? It’s essential to build a work environment that affirms, grows and encourages people, not least because it’s one of the main ways of enticing them to stay.
Culture is also becoming increasingly associated with recruitment success. Today, more people are closely scrutinising the culture of a potential employer alongside core considerations such as salary. Shared values and vision are rising up the list of priorities for people making career choices, and employers should not underestimate its importance, especially for Gen Z professionals – for whom these issues tend to sit near the top of their list of requirements.
Then there’s the question of remote, hybrid or office-based working. Employers should carefully monitor the preferences of candidates and be prepared to offer working arrangements that work for everyone if they are going to fill vacant positions.
Maintain recruitment momentum
When an organisation – large or small – manages to fill its available roles, there’s always the temptation to then put the recruitment process on hold and only restart it again when there are new people to hire. In the case of cybersecurity where demand is very high and people are likely to move jobs relatively frequently, this is a mistake.
Waiting until there are urgent requirements before activating a recruitment strategy and risk delaying the arrival of new people. Instead, businesses should keep making contacts, having informal discussions and building their networks even if they currently have no roles to fill. In pursuing this approach, candidates should always understand whether they are discussing an open role or involved in networking – transparency is vital. Businesses that keep recruitment momentum moving will generally find they are better placed to succeed when their needs become more urgent.
With no end to the cybersecurity talent shortage in sight, organisations must invest in both recruitment and retention. Failure to do so will increasingly mean that some teams can never break the cycle of recruitment and staff turnover, with an almost inevitable impact on the effectiveness of their cybersecurity capabilities and overall commercial success.
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