Workforce agility through new people practices
The pace of product introduction in a large international engineering business was increasing, and driving a need to have more flexible movement of employees between programmes. Contractual arrangements associated with legacy subsidiaries and local practices were inhibiting the ability to balance resource and capability in response to dynamic requirements. More agile contractural arrangements were required to maintain the development of specialist technical capability and professional excellence, but also facilitate workforce flexibility and mobility.
A partnership approach was adopted with employee representatives and management at a national level to secure a common employment framework for the UK group of 8,000 engineers. This would be subject to agreement, but the framework needed to be cost neutral.
The proposed solution included a professional development framework and common grading, the introduction of market-related pay scales, an element of pay for performance, and the replacement of profit sharing and local bonus arrangements with a new standard bonus arrangement. The revised arrangements were recommended to employees by representatives as part of a three year pay deal.
The introduction of formal pay scales led to better control of employment cost and clear competitive market positioning. Common arrangements led to total mobility of resource across programmes, whilst maintaining clear professional capability development. The risk of indirect equal pay issues was also mitigated. The changes were cost neutral, with some improvements in overall cost associated with better control of informal pay progression and grade drift.