2016: An expensive year for employers

The government's new national minimum wage rules look to set back employers over £1 billion in the year to come. The new £7.20 minimum wage, agreed by George Osborne, will start as of April 2016.

This change looks to affect around 1.7 million UK workers, totalling over £650 million of wages to be paid by private employers.

This increase in the national minimum wage has also forced employers to raise wages for those working over the NMW to create wage differentials between employees. This helps to sustain the hierarchy and offer the opportunity for a pay rise or promotion. This increase has been called the “wage spillover” costs and will create a further expense for employers. Research by the RPC suggest that this cost will total around £230 million.

These new government changes are eligible for employees over the age of 25 in which their employer must pay them at least £7.20 per hour. George Osborne aims that this hourly rate will eventually increase to £9 by 2020. So the costs for private companies is likely to keep increasing.

As with an governmental change, there has been a fair share of criticism. Large UK employers argued that this increase could lead to their stores closing down. Alongside this, research from 1000 employers shows that 15% of companies would have to make redundancies to cope with the NMW increase (Resolution Foundation). Many economists have suggested that substantial increases, even if pursued over a few years, would need to be made incrementally and with a great deal of caution if they were to be effective.

Overall, the consensus from the majority of UK employers seems to be positive and they are supportive of the new wage changes. A recent study has shown that 93% of companies think this increase in national minimum wage is a “good idea”.

In addition to this the government has also been criticised for not planning far enough into the future when it comes to calculating the national minimum wage. They have only set plans for the first year and have not calculated what the yearly increases could amount to by 2020.

Times Are Changing: The Future of Supply Chains

“For time and the world do not stand still. Change is the law of life. Those who only look to the past or the present are certain to miss the future.” - John F. Kennedy

In order to develop a tactical procurement team that will add value to your business, you need to learn to adapt. Procurement has been done in the same way by contingent workforce leaders for years. However, the world of sourcing and contingent workforce management is transforming. Traditional sources dominate in contingent workforce management. While staffing suppliers, agencies and personal networks source most contingent talent today. But that is likely to change quickly.

During the 2000s, a few factors combined to cause additional changes in purchasing. Corporate social responsibility became critical due in part to the Internet, easier access to data, strategic sourcing and partnership working. Collaboration between procurement teams, colleagues and suppliers became more frequent. Professionals began to think deeper than cost and how to add value onto overall enterprise. Not to mention the rapid increase of outsourcing and global sourcing requires much greater levels of service contracting management.

It’s evident technology has affected procurement considerably. There has been progression from a focus on physical supply to much broader questions around value. We see, links between procurements effects inside and outside organisations, which developed from understanding both are important for procurement success. Although the world we work in has become much more complex and unpredictable, the internet provides more than enough assistance, to help us make sense of it.

The key to preparing for changes is anticipation, preparation, and the appropriate adjustments. Procurement is changing, so be prepared with these four ways to get ready.

1. Share your knowledge: The most transformative objective to achieve will be making every member of the team better at procurement. Team performance will have a direct impact on your organisation's bottom line. When you build a “procurement mentality” in your staff, you can increase compliance, reduce risk and create more cost savings.
2. Be strategic: Procurement must move away from the presiding focus on unit cost reduction that is still the primary focus in many organisations. You need to play a wider and more fundamental role in the organisation.
3. Expand spend visibility: Spend visibility is an important part to all changes in procurement. If you want to control supply effectively, you need to manage spend. Spend is what you pay and supply is what you get. To manage spend you have to see it.
4. Be prepared to use technology: The speed of technological development is only going to get faster going into the future.. Procurement professionals need to be familiar with technology and know how to use it to manage supply chains and get great business results.

“The Times They Are a-Changin” - Bob Dylan

Predicting The Business Landscape for 2016

2015 has been the year of the entrepreneur with new business models and start-ups constantly popping up. This is due, in part, to innovative use of technology, social media and extremely low-interest rates. 2015 indeed, is a great time to start a business. However, as 2015 is coming to a close you may wonder what the future holds for 2016. 

What technology trends will create unique new business opportunities and change the worldwide business landscape for better or worse. Although we cannot predict the future, we’re going to share with you my predictions for three important changes that should be taken into account before setting up a business in the new year. 

3-D Printing

3D printing makes it possible to create an object simply by creating a digital file through computer aided design (CAD). The software then sends it to the 3D printer where the image is split into 2-dimensional representations, these are then fed through the printer that builds the object layer by layer. A rise in popularity in 3-D printing has the potential to totally revolutionize the global business landscape. Basically, 3-D printing means that anyone anywhere in the world can produce an object they want or need pretty much on demand.

Global shipments of 3D printers were forecasted to grow an astonishing 98% by the end of 2015. In 2016, these sales are expected to double. Over the next several years, it is expected that the price of 3-D printers will decline while means of use will continue to expand. 

Big Data

For the most part, Big Data has mainly been used by larger organisations in order to get a grasp of consumer behaviour. However, this is changing, relatively quickly in fact. Digital marketers and many start-ups collect distinct information about customers, then this data is used to improve their strategy. All the while collection strategy and analysis techniques are improving so many organisations are becoming better at collecting and analysing data.

In the past, companies had so much data they actually struggled to mine it for the useful information. Now, enhanced analytics means that big data is a completely different ballgame. Big data is helping organisations meet their goals and objectives. It’s being used to help retailers predict their customer's future purchases, for pre-targeting in advertising which generates additional traffic and incremental sales by targeting new customers. This only scratches the surface of how increasingly crucial and useful big data is becoming. 

Smartphone Resale Market

Smartphones are expensive. Yet consumers want their hands on new smartphones with exclusive features, without having to pay the large retail price. This has generated vast business opportunities. This is breathing new life in the mobile phone resale market, especially in markets emerging throughout South-east Asia and China. Additionally, businesses that offer services to help users unlock their iPhone iCloud accounts on second-hand phones are becoming increasingly popular. As the smartphone resale market continues to expand, business opportunities like this will continue to emerge.

What These Changes Mean

It is vital to understand how the business landscape is changing if you are an entrepreneur. Developing an understanding of new technology trends and adopting them before others are key to maximizing your potential earnings, whether you’re trying to figure out uses for big data or are planning to involve 3-D printing in your prototyping process.

Celebrating In The Workplace

Many leaders struggle when faced with a celebration in the workplace, and can be left wondering whether they should or not. The argument arises “why should we celebrate, people are already aware that we are succeeding” after yet another milestone has passed. The best answer is to get an equal balance between celebrating when necessary and not overdoing it. However, more than often celebrating when reaching a goal is forgotten about.

In procurement we regularly talk about how to maximise the effectiveness of your workforce, and this can be done through recognising and rewarding achievements.

Why should we celebrate progress?

There are two clear reasons for celebrating progress and this is to reinforce focus and momentum within your employees. During long and tedious projects, focus can get lost as employees concentrate on reaching an end goal. Employees can become engrossed and can easily miss the progress that they have made. It is very important for leaders to help employees to recognise the progress and rejuvenate their focus and team momentum.

 

How should you do it?

We have identified 7 simple components that will help you when considering and executing a workplace celebration.

1. Base it on milestones.

In order to justify a celebration, you must understand the progress that has been made. Having a completed project plan will be an excellent reference, allowing you to see the milestones that were set and when they were achieved.

2. Get the team involved.

Inform the entire team when a celebration is due and allow them to get involved in the process, from organising when and where its taking place, to selecting a gift. Giving this responsibility to participants who may not have had a direct involvement in the achievement will let them feel meaningful.

3. Don't be shy.

Don’t celebrate half heartedly. Let your employees know how much you appreciate their hard work, commitment and overall progress.

4. Keep the celebration in perspective.

The purpose for the celebration should be clearly outlined. This is not an opportunity to celebrate everyone and everything. Make the individuals involved feel special.

5. Be authentic.

There is little point in holding a celebration if you are unable to give them a genuine congratulations. If you are not feeling it, hold back on doing the celebration. Authenticity is vital.  

6. Make it an event.

It doesn't have to big or extravagant, but it does need to be an event. Spread the word around the office so everyone knows when it is.

7. Consider gifts/rewards  

A gift can be a great surprise to add to any celebration. Why not consider a personalised card, vouchers or something else? This also relies on your office's existing gift-giving culture. Remember that the gift should be appropriate for the specific achievement.

We hope that these suggestions will aid you in your celebration decision-making. When used effectively, celebrations can increase employee motivation, productivity and overall morale.